A Medicare Advantage Perspective on HHS Secretary-Designate Xavier Becerra’s Confirmation Hearings

By Jonathan Frank

President Joe Biden has nominated California Attorney General and former Congressman Xavier Becerra to serve as the 25th Secretary of the Department of Health and Human Services (HHS).

The next HHS Secretary will have a powerful voice in the future of Medicare Advantage, where more than 26 million seniors and Americans with disabilities receive coverage today.

Secretary-designate Becerra signaled clear support for Medicare Advantage in testimony at his confirmation hearing before the Senate Finance Committee on February 25th. During the nearly four-hour hearing, Becerra faced questions from lawmakers who expressed both support and skepticism toward Medicare Advantage, including some questions that provided misinformation about Medicare Advantage payment and beneficiary demographics.

This blog post provides a closer look at statements made in Secretary-designate Becerra’s recent confirmation hearing and offers relevant facts and data from BMA’s library of research on Medicare Advantage.

Support for Medicare Advantage

Secretary-designate Becerra provided a clear sign of support for Medicare Advantage during an exchange with Senate Finance Committee Ranking Member Mike Crapo (R-ID).

In response to a question from Senator Crapo, Becerra noted that “Millions of Americans depend on Medicare Advantage,” adding that “We see that Medicare Advantage gives us an easier chance to do what are called ‘wraparound programs’ to reach out to more people with more services … At the end of day, as I said at the beginning, it’s about getting more health care to people at an affordable price and with good quality.”

Becerra’s remarks acknowledge that Medicare Advantage provides beneficiaries with high-quality coverage and additional benefits important to the health and wellbeing of beneficiaries at a lower cost to the consumer.

Indeed, in 2021 more than three-fourths of Medicare Advantage beneficiaries are enrolled in four- or five-star plans – the highest rankings for quality given by the Centers for Medicare and Medicaid Services (CMS). Medicare Advantage beneficiaries also have lower rates of avoidable hospitalization, higher rates of preventive care and screenings, and more spending on primary care and outpatient visits than those enrolled in Traditional Fee-for-Service (FFS) Medicare, particularly among high-need beneficiaries.

What’s more, research commissioned by Better Medicare Alliance shows how Medicare Advantage beneficiaries report an average annual savings of nearly $1,600 as compared to Traditional Fee-for-Service (FFS) Medicare, buoyed by the lowest average Medicare Advantage monthly premiums in the last fourteen years.

Half of Medicare Advantage beneficiaries are enrolled in zero-premium plans, most enrollees choose plans that include prescription drug coverage, and nearly all Medicare Advantage plans provide additional benefits, without additional costs to the consumer or to the government.

Medicare Advantage Demographics

Later in Secretary-designate Becerra’s confirmation hearing, Becerra fielded questions on Medicare Advantage benefits. Several of these questions included incorrect or outdated assumptions about whom Medicare Advantage serves.

Sen. Sherrod Brown (D-OH) stated that Traditional FFS Medicare beneficiaries “typically are a little older, and a little sicker, and a little poorer generally” than those enrolled in Medicare Advantage (a recent media report incorrectly attributed this claim to Secretary-designate Becerra).

On the contrary, enrollment in Medicare Advantage among poorer beneficiaries has grown in the last few years, with the number of individuals who are dually eligible for Medicare and Medicaid increasing 125% from 2013 to 2019, as the number dropped by 5% during the same period in Traditional FFS Medicare. Overall, 50.3% of today’s Medicare Advantage beneficiaries live below 200% of the Federal Poverty Level, compared to 40.1% in Traditional FFS Medicare.

Source: ATI Advisory

Medicare Advantage also serves a higher proportion of minority beneficiaries and beneficiaries with social risk factors. A 2020 data analysis on roughly 1.5 million Medicare Advantage beneficiaries conducted by Avalere Health found that 33.7% of beneficiaries identified as a racial or ethnic minority, as compared to 16% in Traditional FFS Medicare.

Claims of a sicker population in Traditional FFS Medicare are misleading as well. Research from Avalere Health found that Medicare Advantage beneficiaries are 64% more likely to enroll in Medicare due to disability, have a 57% higher rate of serious mental illness, and have a 16% higher rate of alcohol, drug, or substance abuse.

Finally, researchers from Milliman found that “the age composition of Medicare Advantage and fee-for-service Medicare are largely similar.”

Medicare Advantage Payment

Becerra also faced incorrect claims of imbalanced payment in Medicare Advantage as compared to Traditional FFS Medicare, with one Senator arguing that “Medicare programs have been spending more money per Medicare Advantage plan enrollees than on people who choose Traditional Medicare.”

In fact, payment to Medicare Advantage has dropped steadily over the last decade, even as Medicare Advantage enrollment has swelled, far outpacing growth in Traditional FFS Medicare. Medicare Advantage is paid on parity with Traditional FFS Medicare, despite Medicare Advantage offering added benefits, lower cost burden, and better clinical outcomes for beneficiaries.

Source: BMA visual of MedPAC data 

Most recently, an independent analysis from Health Management Associates finds that, upon a full accounting of the facts, total government spending per beneficiary is 6.4% higher for Traditional FFS Medicare than Medicare Advantage.

A Level Playing Field?

In responding to some of the dubious claims made against Medicare Advantage, HHS Secretary-designate Becerra stated that he “will make sure that there is a level playing field” between Traditional FFS Medicare and Medicare Advantage.

Americans agree on the importance of protecting Medicare and Medicare Advantage. While Better Medicare Alliance shares Secretary-Designate Becerra’s goal of fairness for all beneficiaries, a level playing field must not mean harming the coverage, care, and innovation that 26 million Medicare Advantage beneficiaries depend on today.

It is important to note that the federal government continues to show great deference to Traditional FFS Medicare. For example, the Affordable Care Act enacted reductions to Medicare Advantage payment to bring it more closely in line with Traditional FFS Medicare. Moreover, when beneficiaries who age into Medicare fail to make an active coverage choice, they default into Traditional FFS Medicare. A November 2019 poll from Morning Consult found that nearly half of seniors on Medicare were not aware of the option of Medicare Advantage when they first enrolled.

Fairness will not be achieved by diminishing the successes of Medicare Advantage or undermining the framework that delivers better outcomes at a lower cost to a proportionally more diverse and higher-need beneficiary population, particularly during the ongoing COVID-19 pandemic.

Conclusion

The swift confirmation of an HHS Secretary is critical during this public health crisis. Better Medicare Alliance applauds Secretary-Designate Becerra’s expressed support of Medicare Advantage and looks forward to our continued work with leaders on both sides of the aisle to protect and strengthen this valuable coverage tool that is delivering a 98% consumer satisfaction rating, nearly $1,600 in annual savings to beneficiaries, and better health outcomes – particularly for our most vulnerable seniors.

Jonathan Frank is the Communications Director for Better Medicare Alliance