Okay to some extent this is a puff piece put out by a group supported by those who offer Medicare Advantage plans, but the data is real. Medicare Advantage now covers over half of all beneficiaries. The plans generally have better benefits at a lower cost, so have been attractive particularly to lower income persons. In addition, over the last few decades most adults have had some form of health plan coverage from their employer, so continuing to be in one for Medicare does not feel like a big change. Congress and CMS have been intently reviewing the program, particularly in regard to payment, which likely will result in downward adjustments, and enrollment growth will slow just because of the size of the MA population. CMS and Congress are going to have to make a decision soon about what to do with traditional Medicare, which is essentially unmanaged and has poorer quality outcomes than MA. A number of MA-lite initiatives have been launched in recent years including accountable care organizations, but they don’t have the same results. The right thing to do is put every beneficiary in an MA plan, with an out-of-network option similar to traditional Medicare today.
In any event, the report focuses on the relative out-of-pocket spending by those in traditional Medicare versus MA enrollees. The average MA member paid a little over $2500 less out of pocket than did a fee-for-service Medicare beneficiary, or around 40%. Since MA members are on average lower-income, this is particularly meaningful for them. And the gap in out-of-pocket spending has grown in recent years. The results are true for both dual-eligible beneficiaries (those with Medicare and Medicaid) or Medicare-only. The same level of savings is present when accounting for MA plan premium portion paid by beneficiaries and comparing to persons who have a Medicare Supplement. (MA Report)
