Each Medicare Advantage (MA) plan has an associated “value added,” which is defined as the value of benefits provided to a specific plan’s beneficiaries beyond traditional Medicare that are not funded through member premiums. This metric accounts for the value of non-Medicare-covered benefits, reductions in cost sharing to traditional Medicare, any buy-down of the Part B premium, and any additional premium the member is responsible for. Therefore, two plans with identical benefits will have different value added amounts if their premiums vary.
This report by Milliman actuaries highlights changes in the MA value added from 2016 to 2020. The authors focus their analyses on general enrollment and dual-eligible special needs plan types nationwide, excluding any U.S. territories.