Medicare Advantage Beneficiaries Spend Nearly $3,500 Less Per Year Than Fee-for-Service Beneficiaries on Out-of-Pocket Health Care Costs
New report shows growing savings and affordability for seniors in Medicare Advantage
WASHINGTON — Medicare Advantage beneficiaries spent an average of $3,486 less on out-of-pocket costs and premiums than those enrolled in Fee-for-Service Medicare in 2022, according to a new analysis released today by Better Medicare Alliance and conducted by ATI Advisory. That figure marks a significant jump from the $2,541 in annual savings reported in last year’s analysis, demonstrating that the value of Medicare Advantage is growing year over year.
“America’s seniors are concerned about the rising cost of health care, and Medicare Advantage is delivering for them: with better care and improved health outcomes at a lower cost than Fee-for-Service Medicare. And as this report shows, the value gap continues to grow,” said Mary Beth Donahue, President and CEO of Better Medicare Alliance. “But this progress depends on strong federal support. Medicare Advantage is a lifeline for millions of Americans, helping seniors afford the care they need. Policymakers must continue to stand up for seniors and protect this critical program.”
The report, based on Medicare Current Beneficiary Survey data, finds that Medicare Advantage continues to provide both affordability and access to care across beneficiary groups. Key findings include:
- $3,486 in annual savings: Medicare Advantage beneficiaries spent 46% less on out-of-pocket costs than Fee-for-Service Medicare beneficiaries.
- Lower cost burden: Medicare Advantage beneficiaries were 35% less likely to spend over 20% of their income on health care expenses.
- Protection for seniors with chronic conditions: Medicare Advantage beneficiaries with 3+ chronic conditions spent nearly $4,200 less than Fee-for-Service beneficiaries.
- Stronger support in rural and low-income areas: Fee-for-Service beneficiaries in rural and micropolitan areas were 79% more likely to experience cost burden than Medicare Advantage beneficiaries.
- Benefits across racial and ethnic groups: Savings and reduced financial burden in Medicare Advantage were seen consistently across Black, Latino, and white beneficiaries.
“As a nurse and advocate for patients, I see firsthand how many seniors are living paycheck to paycheck and struggling to make ends meet,” said Judy Schmidt, CEO of the New Jersey State Nurses Association. “Medicare Advantage helps millions of seniors afford the comprehensive care they need. This report makes clear just how important the program is for protecting older adults’ health and financial security.”
“Medicare Advantage offers affordable, high-quality coverage that helps seniors and individuals with disabilities manage rising health care costs,” said Joel White, President of the Council for Affordable Health Coverage (CAHC). “Better Medicare Alliance’s latest report is an important showcase of proven strategies that the broader health system can adopt in addressing the skyrocketing cost of care.”
“At JustWell Health, we see how timely access to primary care not only improves outcomes but also lowers costs,” said Manuel Niebla, COO of JustWell Health. “This report confirms what we experience every day—Medicare Advantage is helping Hispanic seniors get the care they need while keeping out-of-pocket costs down and reducing avoidable hospitalizations.”
With enrollment surpassing 34 million beneficiaries nationwide, Medicare Advantage continues to offer a high-value, high-access option that meets the needs of a diverse and growing senior population.
###
Better Medicare Alliance is a community of more than one million grassroots beneficiaries and 200+ ally organizations working to improve health care through a strong Medicare Advantage. Learn more at www.bettermedicarealliance.org.