The research, led by Harvard T.H. Chan School of Public Health and published this month in Health Affairs, found that in 2020 alone, the Centers for Medicare & Medicaid Services (CMS) paid more than $1.32 billion to Medicare Advantage plans for enrolling veterans who did not use Medicare services.
The study highlights the growing prevalence of high-veteran MA plans—defined as plans where 20 percent or more of enrollees are veterans—and their implications for veteran care, suggesting that the federal government is paying for health care twice for an increasing number of veterans.
“As veterans navigate the increasing complexities of health care options, our research aims to inform policymakers and stakeholders about the urgent need to optimize the use of federal resources in veteran care,” said corresponding author Jose Figueroa, associate professor of health policy and management, Harvard T.H. Chan School of Public Health, in the study announcement. “This is particularly important given the substantial budget constraints that the Veterans Affairs system is currently facing.”
The researchers used a variety of data from CMS and Veterans Health Administration (VHA) to examine veterans’ health care enrollment and usage and the cost to the federal government. They found:
- Between 2016 and 2022, the number of veterans enrolling in MA plans increased, with a notable rise in those joining high-veteran MA plans.
- Approximately one in five veterans enrolled in high-veteran MA plans did not incur any Medicare services paid by MA within a given year, a rate more than double that of veterans in other MA plans and nearly six times greater than the general MA population. Instead, the veteran-enrollees were much more likely to receive their health care at VHA facilities.
- In 2020 alone, CMS paid more than $1.32 billion to MA plans for enrolling VA-enrollees who did not use Medicare services, which represents nearly a 60 percent increase from 2016. Nearly 20 percent of that funding was directed disproportionately to high-veteran MA plans. Researchers aid this finding raises concerns about the efficiency of federal health care spending, given that MA plans are paid full capitated payments—set amounts of money per patient, regardless of their use of services—to cover comprehensive medical care. Meanwhile, the VA is prohibited from billing MA plans for Medicare-covered services.
“Our study holds important policy implications for leadership interested in improving the efficiency of federal resources for veteran care,” said Figueroa. “The results highlight the substantial extent of wasteful and duplicative federal spending on MA plans for enrolling veterans who do not receive any Medicare services.”
“The growth of high-veteran MA plans underscores the necessity to mitigate potentially wasteful payments and enhance care coordination between CMS and the VHA, especially amid ongoing enrollment growth in MA plans,” added first author Yanlei Ma, research associate in the Department of Health Policy and Management.