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Medical Care

Two Kinds of Medicare

Seniors who get their health coverage through Medicare Advantage plans, which are run by health insurance companies, are likely to be healthier than those who get the coverage directly from the federal government.

Writing in JAMA Internal Medicine, a University of Michigan Medical School team drew their findings from data on a representative sample of Medicare participants who died over a 14-year period. They found the two groups differ in several aspects of health and independence in the last six months of life.

Participants in Medicare Advantage plans – the HMO-style plans offered by private companies – were younger and heathier overall than those enrolled in traditional “fee for service” Medicare. They were also more likely to be black and live in cities, and less likely to be poor enough to qualify for Medicaid.

Even after the researchers corrected for differences between the two groups based on their ages, wealth and education, they still found differences.

Medicare Advantage enrollees said their health was better, reported fewer problems performing daily life activities on their own, and had fewer memory and thinking issues than traditional Medicare participants.

Many health policy decisions are made by looking only at traditional Medicare data, says Elena Byhoff, M.D., M.S., who led the analysis as a Robert Wood Johnson Clinical Scholar at U-M.

That’s because it’s easier to get specific information about what care each patient received, and what it cost the Medicare program, in fee-for-service care. Private plans receive a lump sum to care for a population of patients.

When Medicare Advantage was new and covered a much smaller proportion of Medicare enrollees, basing decisions just on traditional Medicare data may have been reasonable, she notes. But enrollment in Medicare Advantage has tripled in the last 12 years, and now 31 percent of seniors have such coverage.

“Potentially, we’re overestimating the severity of illness in studies of Medicare end-of-life care, and evaluations of policy options,” says Byhoff, an internist and health services researcher who worked on this study with John Z. Ayanian, M.D., MPP, director of the U-M Institute for Healthcare Policy and Innovation.

Typical studies of end-of-life care use data that the federal Centers for Medicare and Medicaid Services (CMS) make available to researchers and policy analysts. The new study used data from the Health and Retirement Study, based at U-M’s Institute for Social Research. For over two decades, it has tracked the health and other characteristics of older Americans through detailed surveys.

The team obtained data from 9,385 participants who died between 1998 and 2012, just as Medicare managed care options were taking off. They looked at characteristics as reported on the last survey that the participants took. Just over 24 percent of the individuals had Medicare Advantage.