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Understanding the Medicare Advantage Program

October 2023
Full report

Medicare Advantage (MA) plans offer beneficiaries a valuable alternative to Medicare fee-for-service (FFS). By providing out-of-pocket cost protections, offering additional benefits, and employing innovative strategies for care management and coordination, MA has led to lower costs and improved care across the Medicare program.

Over half of eligible Medicare beneficiaries (more than 30 million people) receive their benefits through an MA plan rather than traditional FFS. Though MA payments are, on average, equivalent to FFS costs, the manner in which MA plans are paid—via monthly capitated payments—differs significantly from FFS. The capitated model inherently incentivizes MA plans to keep enrollees healthy, prevent avoidable complications of disease, and prioritize value over volume of services. 

MA plans’ efforts to improve care influence the way in which providers deliver care to all of their Medicare patients. These positive “spillover effects” have contributed to improvements in healthcare service use and, importantly, a slowdown in overall Medicare spending. 


  • Types of MA Plans
  • Comparison of MA and FFS
  • Value of MA for Enrollees
  • MA Plan Payment
  • Risk Adjustment

Related Public Policy Research

Medicare Advantage Supplemental Benefits and Improved Healthcare Use

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May 2024

Connecting with Medicare Beneficiaries to Lessen Social Isolation

Negative physical and mental health consequences can accompany social isolation and loneliness in older adults. Early findings from Elevance Health’s Member Connect program demonstrate the positive impact social connectedness programs can have on member well-being.

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Medicare Advantage Supplemental Benefits Address Health-Related Social Needs

Medicare Advantage (MA) plans offer additional benefits not covered by traditional Medicare known as supplemental benefits. This paper examines the use of supplemental benefits overall and by demographic characteristics of MA members, demonstrating that supplemental benefits can address health-related social needs.

July 2023