To determine the effect of higher potential benchmark payment rates on the market for Medicare Advantage () Dual‐Eligible Special Needs Plans (D‐s).
Publicly available county‐level data from 2009 to 2015 regarding the number of D‐s operating within the county, the enrollment in and five‐star quality of score of these plans, and the benchmark amounts used to determine capitated plan payments.
This study exploits the introduction of quality bonus payments to the program in 2012, and exogenous geographic variation in the potential size of these bonuses to estimate the effect of benchmark payment increases on the availability, quality, and take‐up of D‐s. We use a difference‐in‐difference estimation approach to compare changes in the market for D‐s in counties eligible for a double bonus to those that are not.
The doubling of bonuses was associated with a relative 29 percent increase in the number of D‐s offered (=0.021) and 0.1‐star increase in the average quality of available D‐s (=0.034). No relative increase in overall D‐ enrollment was detected.
These findings indicate that larger benchmark payment amounts may influence insurers’ decisions of whether to participate in the D‐ market but not dual‐eligibles' decision of whether to enroll in these plans. Future research is needed to inform discussions about whether D‐s are a viable mechanism for integrating benefits for dual eligibles and the degree to which Medicare policies should support their continued growth.
Data Sources/Study Setting