Effects Of Medicare Advantage On Health Care Use And Outcomes Among Retired State Employees In 5 States

Medicare Advantage (MA) plans receive capitated payments that could lead to greater efficiency compared with traditional Medicare but may also curtail provision of beneficial services. However, MA effects are not fully understood, as most research to date is cross-sectional and could be subject to selection bias. This study investigated a natural experiment in which five states (Alabama, Arizona, Colorado, Connecticut, and New Jersey) shifted health benefits for retired state employees from supplemental plans for traditional Medicare to MA plans during the period 2017-19, leading to 87 percent of the more than 220,000 state retirees in these states shifting to MA. We found increased use of certain outpatient services (annual wellness visits and home evaluation and management visits) and observation stays, along with reduced hospital and postacute care admissions. We found no effect on days spent at home or in the community, or on mortality.