Medicare is one of America’s largest health programs, providing comprehensive health insurance coverage for over 65 million seniors and people with disabilities. Nearly half of all Medicare beneficiaries choose to get their coverage through Medicare Advantage, a popular alternative to traditional fee-for-service Medicare. Under this program, beneficiaries select a private health plan through which to receive their Medicare benefits. Kaiser Permanente is one of Medicare Advantage’s largest and top-performing participants, with more than 1.8 million Medicare members.

Kaiser Permanente supports Medicare Advantage because it aligns with our integrated care and coverage model and our focus on delivering high-quality, high-value care. A key to this is Medicare Advantage’s value-based payment model, which incentivizes participating health plans to keep beneficiaries healthy. It accomplishes this by paying health plans a monthly rate per enrollee, instead of paying health care providers based on the quantity and type of services delivered. This payment model is well-matched with Kaiser Permanente’s focus on preventive care and our global budgeting approach to funding operations and delivering care.

Another important quality incentive is the Medicare star quality rating system. Each year, every Medicare Advantage health plan gets a quality rating of between 1 and 5 stars, with 5 stars reflecting the highest quality. The highest-rated plans are rewarded with bonus payments, a higher rebate percentage with which to provide extra benefits, and the opportunity to enroll members year-round. The rating system also allows enrollees to shop for plans based on quality, which further incentivizes health plans to keep their members healthy. Five Kaiser Permanente Medicare health plans earned the highest quality rating — 5 out of 5 stars for 2023 — an excellent rating for care and member experience.

In addition to their focus on quality, Medicare Advantage plans are popular because they often offer prescription drug coverage (Medicare Part D) or additional benefits, such as hearing, vision, and dental coverage, that help keep beneficiaries healthy. Plans may also include wellness programs, such as gym memberships.

Kaiser Permanente is committed to strengthening the Medicare program and ensuring beneficiaries receive high-quality care, maintain high levels of satisfaction, and have manageable costs.

We believe Medicare policy should:

• Incentivize improvements in health care quality and Medicare beneficiary satisfaction
• Encourage care-delivery innovation
• Support Medicare beneficiaries’ understanding of their care and coverage options and involvement in their care decisions
• Effectively use federal funds and ensure beneficiaries’ costs are manageable
• Ensure a level playing field for a variety of care and coverage models participating in Medicare, including integrated delivery and payment systems like Kaiser Permanente

To support these beliefs, we continue to advocate for policies that:

• Expand access to clinically appropriate, high-quality telehealth services for Medicare beneficiaries
• Promote strong quality measurement processes and quality performance incentives within Medicare
• Modernize Medicare Advantage network adequacy rules to ensure that the goal of accessible care is being met and keeping pace with care delivery innovation
• Ensure a level playing field for a variety of care and coverage models participating in Medicare, including integrated delivery and payment systems like Kaiser Permanente

¹ Kaiser Family Foundation, “Total Number of Medicare Beneficiaries. (2020),” January 2021.
² Statista, 2022.
³ KFF, 2023.