# The Effects of Medicare Advantage on Healthcare Use and Patient Outcomes

> **NIH NIH R01** · UNIVERSITY OF MINNESOTA · 2022 · $425,997

## Abstract

Project Summary/ Abstract
A growing share of Medicare beneficiaries are enrolled in Medicare Advantage (MA) rather than traditional fee-
for-service (TM) Medicare, with the MA share increasing from 13% in 2004 to 39% in 2020. The Centers for
Medicare and Medicaid Services (CMS) pay MA plans a monthly capitated rate to cover nearly all health care
expenses for plan enrollees. MA plans keep as profits the portion of payments that are not used to cover enrollee
expenses. In addition, CMS grants MA plans greater freedom to manage enrollees’ health care use, for example,
through tools such as narrow provider networks and broader coverage of delivery innovations such as
telemedicine. Proponents argue that these financial incentives and effective tools for MA plans might enable
them to provide care more efficiently than TM. On the other hand, these effects could be offset by financial
incentives under capitation to limit service provision beyond what is necessary to improve short term health,
resulting in adverse impacts on longer-term outcomes. Prior work has primarily estimated cross-sectional
comparisons of TM and MA enrollees, which could lead to biased estimates if MA enrollees differ from TM
enrollees in other ways that are related to health care use and health outcomes. Our proposed project will study
changes in MA enrollment coming from seven states that recently changed public retiree health benefits from
supplemental TM coverage to mandatory MA plans (or in one state, from a mandatory MA plan to supplemental
TM coverage). We will use these natural experiments, along with comprehensive Medicare data for TM and MA
enrollees, to estimate the causal impact of MA enrollment on health care use, quality, and patient outcomes.
These results will provide important evidence to policymakers weighing broader expansions of Medicare
Advantage.

## Key facts

- **NIH application ID:** 10366609
- **Project number:** 1R01AG071731-01A1
- **Recipient organization:** UNIVERSITY OF MINNESOTA
- **Principal Investigator:** Peter Huckfeldt
- **Activity code:** R01 (R01, R21, SBIR, etc.)
- **Funding institute:** NIH
- **Fiscal year:** 2022
- **Award amount:** $425,997
- **Award type:** 1
- **Project period:** 2022-06-01 → 2026-03-31

## Primary source

NIH RePORTER: https://reporter.nih.gov/project-details/10366609

## Citation

> US National Institutes of Health, RePORTER application 10366609, The Effects of Medicare Advantage on Healthcare Use and Patient Outcomes (1R01AG071731-01A1). Retrieved via AI Analytics 2026-05-22 from https://api.ai-analytics.org/grant/nih/10366609. Licensed CC0.

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