While the Affordable Care Act has been denounced by itsopponents as a radical transformation of the U.S. health caresystem, the landmark health law largely mirrored existing programs.

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In addition to expanding Medicaid, the ACA set up the Obamacaremarketplace, where people can purchase subsidized private healthplans, just as seniors have been able to do through the Medicare Advantage marketplace for years.

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However, the Medicare Advantage marketplace has been far lesscontroversial and has functioned far better than its ACAcounterpart. Premiums have not grown as quickly and participationby insurers has been stabler.

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While premiums for the Obamacare marketplace have risen morethan 20 percent since 2014, MA premiums have only gone up abouthalf as much.

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Why has the MA marketplace performed better? That’s a questionthat the Robert Wood Johnson Foundation examined in arecently-released study.

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For starters, MA beneficiaries are far less “price-sensitive”than Obamacare enrollees, the study authors write. That’s becauseMedicare plans are more heavily subsidized and because Medicarebeneficiaries come from every income segment, whereas ACA enrolleesare disproportionately low-income.

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“Thus, (MA) insurers do not have to be one of the twolowest-premium options to gain significant market share,” saysthe study.

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The MA market is also much bigger, representing 19 millionenrollees, more than twice the ACA marketplace enrollment ofroughly 9 million. The potential for the MA market to grow isenormous, since it only currently accounts for one-third of theoverall Medicare population.

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Furthermore, MA premiums are based on per capita spendingbenchmarks established by the traditional Medicare program.

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“Medicare Advantage plans know the benchmark before they submittheir bids to the program, so these insurers can easily set theirpremiums low enough to command some market share,” says the study.“The ACA links its premium tax credits to the premium of thesecond-lowest-cost silver plan available in the area, introducingmuch more uncertainty about the benchmark premium year over yearand forcing insurers to compete aggressively on price in order toearn enough market share to make participation worthwhile.”

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Medicare Advantage plans also benefit from the fact that seniorsare far less likely to forgo insurance completely than thenon-seniors that ACA plans are competing for. That’s due to thesimple fact that as people age, their medical needs increase.

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Finally, Medicare’s risk-adjustment program is far morefavorable to MA insurers than the ACA’s program has been toObamacare plans. That was true even before the ACA risk adjustmentcorridor program was gutted in a provision authored by Sen. MarcoRubio, R-Fla, that was included in a 2015 Congressional budgetdeal.

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