Rural Medicare Advantage Market Dynamics and Quality: Historical Context and Current Implications


Quality ratings of Medicare Advantage (MA) plans were linked to MA payment in an attempt to incentivize quality improvement, beginning in 2012. There is significant variation in the quality ratings of MA plans that are available to rural beneficiaries. Historical factors tend to influence the quality star ratings of MA plans, including the age of the contract and the historical HMO penetration rate. In addition, plans entering and exiting the MA program can have an impact on average star ratings, as plans exiting the program typically have lower scores than new plans entering the MA market. This analysis indicates that the limited availability of high-scoring MA options in rural areas is likely impacting the enrollment of rural MA beneficiaries into high quality plans, as fewer rural beneficiaries than urban beneficiaries are enrolled in plans with high quality ratings. Overall, MA quality scores have been increasing since 2012; however, average quality scores of plans in rural areas continue to lag behind those in urban areas, possibly due to the historical factors and MA market dynamics since these differ in rural and urban places. Targeted adjustments may need to be made to MA plan payment to encourage MA plans operating in rural areas to achieve similar quality ratings to those in urban areas or to encourage high-quality MA plans to expand their service areas in rural markets.

RUPRI Center for Rural Health Policy Analysis
Leah Kemper, Abigail Barker, Lyndsey Wilbers, Timothy McBride, Keith Mueller