Medicare is one of America’s largest health programs, providing comprehensive health insurance coverage for over 60 million seniors and people with disabilities. Nearly 40% of people eligible for Medicare, called 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. Today, Kaiser Permanente is one of Medicare Advantage’s largest and top-performing participants, with more than 1.7 million Medicare members across 7 plans consistently rated among the best in the country.
Kaiser Permanente supports Medicare Advantage because it aligns with our integrated care model and our focus on delivering high-quality, high-value care. A key to this is Medicare Advantage’s 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 health 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 and an additional bonus enrollment period. The rating system also allows enrollees to shop for plans based on quality, which further incentivizes health plans to keep their members healthy. In 2020, Kaiser Permanente had the most top-rated 5-star plans of any payer in the country. Notably, 3 out of 4 Medicare Advantage beneficiaries enrolled in a 5-star plan were Kaiser Permanente members.
In addition to their focus on quality, Medicare Advantage plans are popular because they often offer prescription drug coverage (Medicare Part D) or benefits that help keep beneficiaries healthy, such as hearing, vision, and dental coverage. They 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:
To support these beliefs, we have advocated for policies that:
1 Kaiser Family Foundation, “Total Number of Medicare Beneficiaries (2020),” January 2021.
2 Medicare Payment Advisory Commission, “A Data Book: Health Care Spending and the Medicare Program,” June 2018.
3 Kaiser Family Foundation, “An Overview of Medicare,” February 13, 2019.