Medicare Advantage vs. Traditional Fee-for-Service Medicare

This white paper presents a detailed analysis comparing Medicare Advantage (MA) and Traditional Fee-for-Service (FFS) Medicare, focusing on different populations and outcomes. It outlines the significant growth of MA enrollment, which has increased from 17% in 2000 to over 54% in 2024, highlighting the importance for stakeholders to understand the differences between these two coverage options. The paper details two major findings: first, individuals opting for MA have risk scores approximately 11% higher than those in FFS, indicating favorable selection into FFS. Second, it finds that FFS enrollees would incur 11% lower costs if they switched to MA, with higher emergency department visits and hospital admissions observed in FFS. The research employs a rigorous methodology to ensure accurate comparisons, controlling for selection biases and coding differences. The findings suggest that MA may deliver more efficient care than FFS, providing valuable insights for healthcare policy and future research.