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Get the facts on Medicare Advantage Payment

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Medicare Advantage depends on stability and predictability from Washington to continue delivering the quality, affordable, coordinated coverage that more than 28 million Americans choose today.

Data shows that with lower per-beneficiary government spending, lower consumer costs, better health outcomes, and added benefits to address seniors’ social determinants of health, Medicare Advantage is money well spent.

FACT: Medicare Advantage maintains lower per-beneficiary government spending and greater value for the public dollar than FFS Medicare

  • An October 2021 actuarial analysis from Milliman found that per-member, per-month spending in Medicare Advantage is nearly $7 lower than per-member, per-month spending for beneficiaries of a similar health status in FFS Medicare ($942.43 in Medicare Advantage vs. $949.39 in FFS Medicare).
  • The research additionally showed that Medicare Advantage covers the same hospital and physician services at a 24% lower cost than FFS Medicare ($709.66 in Medicare Advantage vs. $935.67 in FFS Medicare).
  • All told, Milliman’s findings show that Medicare Advantage provides approximately $32.5 billion annually in added value to seniors through lower out-of-pocket costs and additional benefits unavailable in FFS Medicare, leading the researchers to conclude that the federal government pays less and gets more for its dollar in MA than in FFS, adding that “findings suggest that overall MA offers significant value for the government.”

FACT: Medicare Advantage beneficiaries save an average of nearly $2,000 on health care costs each year

  • New research from ATI Advisory finds that Medicare Advantage beneficiaries report spending nearly $2,000 less ($1,965) on out-of-pocket costs and premiums annually compared to FFS Medicare beneficiaries – even as Medicare Advantage and FFS Medicare maintain similar per-beneficiary costs to the health care system.
  • The lower beneficiary costs in Medicare Advantage result in a 35% lower rate of cost burden (defined as spending 20% or more of one’s income on health expenses) than FFS Medicare.
  • The significant cost savings found in Medicare Advantage extends across race and ethnicity, which Black Medicare Advantage beneficiaries spending $1,104 less in total health spending compared to FFS Medicare while Latino Medicare Advantage beneficiaries see an average savings of $1,421.
  • Separately, CMS data shows that average Medicare Advantage monthly premiums continued to decline in 2022 —reaching a 15-year low. Today 58% of Medicare Advantage plans have a $0 premium.

FACT: Medicare Advantage is serving a beneficiary population that is proportionally more diverse, medically complex, and socially at-risk than FFS Medicare

  • Medicare Advantage’s efficiencies for the healthcare system and lower per-beneficiary costs to the federal government are made all the more significant in light of the increasingly diverse, medically complex, and socially at-risk population it serves.
  • Data analysis shows that 52.7% of Medicare Advantage beneficiaries live below 200 percent of the Federal Poverty Level, compared to 38.3% of FFS Medicare beneficiaries.
  • Medicare Advantage beneficiaries are more likely to self-report having three or more chronic conditions, they are more likely to be food insecure, and are more likely to self-report diagnoses of diabetes, COPD, congestive heart failure, or dementia, to name a few.
  • Enrollment in Medicare Advantage among beneficiaries who are dually-eligible for Medicaid increased by 125% from 2013 to 2019 alone, even as it decreased by 5% in FFS Medicare.
  • Avalere Health reports that “Medicare Advantage has a higher proportion of patients with clinical and social risk factors shown to affect health outcomes and cost than FFS Medicare.”

FACT: Medicare Advantage beneficiaries experience better health outcomes and fewer avoidable hospitalizations than beneficiaries in FFS Medicare

  • Data analysis by Avalere Health shows that Medicare Advantage delivers a 43% lower rate of avoidable hospitalizations compared to FFS Medicare, a 5% lower rate of hospital readmissions, and higher rates of preventive care and screenings.
  • Separate research found that, in the first nine months of the COVID-19 pandemic, Medicare Advantage had a 19% lower rate of COVID-19 related hospitalizations than FFS Medicare, and a lower COVID-19 mortality rate.

FACT: Medicare Advantage delivers value for seniors and taxpayers through extra benefits unavailable in FFS Medicare

  • In 2022, 99.9% of Medicare Advantage plans are providing supplemental benefits – including those targeted to addressing social determinants of health -unavailable in FFS Medicare.
  • While vision, hearing, wellness, and dental coverage are nearly universal in Medicare Advantage, data shows that 69% of Medicare Advantage plans are also providing meal benefits and 50% include transportation benefits.
  • For beneficiaries with chronic conditions, health plans have innovated in 2022 to increasingly provide benefits such as prescription drop off and pickup, service animals, pest control, structural home modifications, and more.

FACT: Seniors overwhelmingly oppose cuts to their Medicare Advantage coverage

  • A December 2021 poll shows that 88% of seniors say they oppose the federal government reducing the amount of money it contributes to Medicare Advantage, including 74% who are strongly opposed.
  • 92% of seniors on Medicare Advantage say a candidate’s support for Medicare Advantage is important when they cast their vote, while 93% of those surveyed said that protecting Medicare Advantage should be a priority for the Biden administration.

Go Deeper: Read more below from Better Medicare Alliance’s library of research demonstrating the value of Medicare Advantage to seniors and government alike.

  • Executive Summary: Medicare Advantage Provides $32.5 Billion Annually in Additional Value through Lower Cost Sharing and Extra Benefits Relative to FFS Medicare (October 2021) Read More
  • Report: Value to the Federal Government of Medicare Advantage (October 2021) Read More
  • Data Brief: Medicare Advantage Outperforms Fee-for-Service Medicare on Cost Protections for Low-Income and Diverse Populations (May 2022) Read More
  • Fact Sheet: Medicare Advantage Outperforms Fee-for-Service Medicare on Cost Protections for Low-Income and Diverse Populations (May 2022) Read More
  • Fact Sheet: Medicare Advantage Beneficiary Demographics (November 2021) Read More
  • Report: Positive Outcomes for High-Need, High-Cost Beneficiaries in Medicare Advantage Compared to Traditional Fee-For-Service Medicare (December 2020) Read More