Spending Patterns for ADRD: Evidence from Medicare FFS and Medicare Advantage

Understanding the magnitude of the medical care and long-term care costs attributable to dementia is important for public and private decision makers. Estimating these costs, especially in a Medicare Advantage (MA) population, has been difficult, but particularly relevant now that one-third of Medicare beneficiaries are enrolled in Medicare Advantage. First, obtaining reliable utilization and cost data from Medicare Advantage is a challenge in and of itself. Second, coverage differences between MA and traditional Medicare makes it difficult to make apples-to-apples comparisons of costs and utilization between the two systems. In this paper, we harmonize claims data from one Medicare Advantage plan and Traditional Medicare, and use identical methods and definition of disease onset to make direct comparisons of the costs of ADRD in the two systems. We further identify the drivers of the differences in the costs, and break it down between utilization and insurance coverage differences.