Assessing Profitability of Medicare Part C Plans

Project investigator Richard Frank will identify Medicare Advantage (MA) plans’ complex revenue and profit sources by reviewing trade literature and interviewing industry experts. He will then conduct a novel empirical analysis of their profitability by constructing several indicators of financial performance. The project will describe overall profitability and its correlates (e.g., average star quality rating, number of markets) through multivariate analysis. Data will come from the Centers for Medicare and Medicaid Services; the National Association of Insurance Commissioners; IRS Form 990; Securities and Exchange Commission filings for public carriers; and Dun and Bradstreet, which provides unique business numbers. Frank also will examine the profitability of special needs plans, which serve the sickest and poorest MA populations and reportedly reap the highest profits.