title: Favorable selection, risk adjustment, and the Medicare Advantage program.
abstract: OBJECTIVE
  To examine the effects of changes in payment and risk adjustment on (1) the annual enrollment and switching behavior of Medicare Advantage (MA) beneficiaries, and (2) the relative costliness of MA enrollees and disenrollees.
  
  
  METHODS
  From 1999 through 2008 national Medicare claims data from the 5 percent longitudinal sample of Parts A and B expenditures.
  
  
  METHODS
  Retrospective, fixed effects regression analysis of July enrollment and year-long switching into and out of MA. Similar regression analysis of the costliness of those switching into (out of) MA in the 6 months prior to enrollment (after disenrollment) relative to nonswitchers in the same county over the same period.
  
  
  RESULTS
  Payment generosity and more sophisticated risk adjustment were associated with substantial increases in MA enrollment and decreases in disenrollment. Claims experience of those newly switching into MA was not affected by any of the policy reforms, but disenrollment became increasingly concentrated among high-cost beneficiaries.
  
  
  CONCLUSIONS
  Enrollment is very sensitive to payment levels. The use of more sophisticated risk adjustment did not alter favorable selection into MA, but it did affect the costliness of disenrollees.
authors.affiliation: Lister Hill Center for Health Policy, University of Alabama at Birmingham, Birmingham, AL 35294-0022, USA. morrisey@uab.edu
authors.forename: Michael A
authors.initials: MA
authors.lastname: Morrisey
authors.forename: Meredith L
authors.initials: ML
authors.lastname: Kilgore
authors.forename: David J
authors.initials: DJ
authors.lastname: Becker
authors.forename: Wilson
authors.initials: W
authors.lastname: Smith
authors.forename: Elizabeth
authors.initials: E
authors.lastname: Delzell
mesh_terms: D006302:Health Services Research; D006801:Humans; D007345:Insurance Claim Review / Q000706:statistics & numerical data; D007349:Insurance, Health, Reimbursement / Q000191:economics*; D006278:Medicare / Q000191:economics; D020398:Medicare Part C / Q000191:economics*; D017059:Models, Econometric; D012189:Retrospective Studies; D020379:Risk Adjustment / Q000191:economics*; D014481:United States