BMA: Medicare Advantage beneficiaries save more money on out-of-pocket costs than Medicare fee-for-service

Medicare spending costs money
Medicare Advantage offers care for more low-income individuals compared with traditional Medicare, a new analysis from Better Medicare Alliance said. (Getty/zimmytws)

Medicare Advantage plan holders spend $1,640 less a year compared with traditional fee-for-service, a new analysis finds.

The analysis released Tuesday from the advocacy group Better Medicare Alliance also found that lower-income Medicare beneficiaries are more likely to choose MA over the traditional program.

Beneficiaries in MA reported out-of-pocket and premium spending of $3,354 a year in 2018, compared with $4,994 in fee-for-service, the analysis added. That was a $42 increase since 2017.

“This results in a 40% lower cost burden for consumers than traditional Medicare,” said Allyson Schwartz, president and CEO of Better Medicare Alliance, in a statement. “The consumer savings in Medicare Advantage translates to meaningful financial security and peace of mind for millions of beneficiaries.”

The analysis also found that more than 40% of beneficiaries who make under 200% of the federal poverty level were enrolled in MA, compared with 27% of beneficiaries that make more than 400% of the poverty level.

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Researchers also found that 52% of MA beneficiaries live below 200% of the poverty level, compared with 39.1% of beneficiaries in traditional Medicare fee-for-service.

MA beneficiaries are also more likely to be dual-eligible and enrolled in Medicaid.

“Dual eligible often are a focus of policy efforts due to their medical functional complexity, as well as their socioeconomic disadvantage,” the analysis said.

Researchers found that 21.9% of MA beneficiaries are eligible for Medicaid compared to 15.3% of traditional fee-for-service Medicare.

MA beneficiaries also report a similar satisfaction rate for their healthcare quality compared with traditional Medicare, as 94.6% of MA beneficiaries are satisfied compared with 95% for traditional Medicare.

Another 96% of MA beneficiaries find it easy to get to a doctor, compared with 94.5% for traditional Medicare.

The analysis comes as the MA program is expected to increase over recent years and has become a key part of insurers’ portfolios.