Medicare advantage plans with high numbers of Veterans: Enrollment, utilization, and potential wasteful spending

Abstract: Medicare Advantage (MA) plans are increasingly enrolling veterans. Because MA plans receive full capitated payments regardless of whether or not veterans use Medicare services, the federal government can incur substantial duplicative, wasteful spending if veterans in MA plans predominantly seek care through the Veterans Health Administration (VHA) system. The recent growth of MA plans that disproportionately enroll veterans could further exacerbate such wasteful spending. Using national data, we found that veterans increasingly enrolled in MA between 2016 and 2022, including in a growing number of MA plans in which 20 percent or more of the enrollees were veterans. Notably, about one in five VHA enrollees in these high-veteran MA plans did not incur any Medicare services paid by MA within a given year-a rate 2.5 times that of VHA enrollees in other MA plans and 5.7 times that of the general MA population. Meanwhile, VHA enrollees in high-veteran MA plans were significantly more likely to receive VHA-funded care. In 2020, the Centers for Medicare and Medicaid Services paid more than $1.32 billion to MA plans for VHA enrollees who did not use any Medicare services, with 19.1 percent going to high-veteran MA plans.