Payment to Medicare Advantage (MA) plans was fundamentally altered by the Patient Protection and Affordable Care Act of 2010 (ACA). This brief finds that while plans operating in both rural and urban areas have experienced a reduction in MA payment, the reduction in rural payment overall has been less significant. In addition, MA plans have lower quality, on average, than plans in urban areas; therefore, rural beneficiaries could benefit from incentives for MA plans to improve quality. However, MA plans operating in many rural areas do not have the same monetary incentives to improve quality as most urban areas because they are often ineligible to receive quality-based bonus payments.
Leah Kemper, Abigail R. Barker, Timothy D. McBride, Keith Mueller