Do Medicare Advantage Rebates Reduce Enrollees’ Out-of-Pocket Spending?

Research output: Contribution to journalArticlepeer-review

1 Scopus citations


The majority of Medicare Advantage (MA) plans receive payments that exceed their costs of providing basic Medicare benefits. There is controversy about whether these payments are passed on to the enrollees as supplemental benefits or are retained by plans. We used survey data on MA beneficiaries’ actual out-of-pocket (OOP) spending linked to MA payment information to test whether higher plan payments and rebates lowered enrollee OOP spending. We used instrumental variables regression models to address concerns that plan payments and rebates may reflect anticipation of enrollees with particular health-spending profiles. We found that beneficiaries recovered only $0.65 of every $1.00 in payments exceeding fee-for-service spending through lower OOP spending but more than fully recovered the value of the rebates supporting supplemental benefits.

Original languageEnglish (US)
Pages (from-to)474-482
Number of pages9
JournalMedical Care Research and Review
Issue number5
StatePublished - Oct 1 2020


  • Medicare Advantage
  • managed care
  • out-of-pocket spending
  • plan rebates

ASJC Scopus subject areas

  • Health Policy


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