New Analysis: Medicare Advantage Provides Key Financial Protections for Low and Modest Income Beneficiaries

Washington, D.C. – Today, Better Medicare Alliance (BMA), the leading advocacy coalition for Medicare Advantage, released a new analysis entitled:  Medicare Advantage Provides Key Financial Protections to  Low and Modest Income Populations.

The analysis produced by Anne Tumlinson Innovations found that while there are many similarities between the populations in Medicare Advantage and Traditional Medicare in terms of age, gender, there are difference, including a higher number of enrollees with incomes below 200% of poverty and higher percentage of minorities. Most noteworthy, the analysis showed that Medicare Advantage enrollees have significantly lower premium and out-of-pocket costs and are less likely to be cost-burdened.

Congresswoman Allyson Y. Schwartz President and CEO of BMA noted, “Given consumer worries about high out-of-pocket costs, these findings support the financial value of Medicare Advantage for seniors who typically live on fixed incomes, half of whom live on less $24,000 a year.  Along with the high-quality coordinated care, additional benefits and annual out-of-pocket cost limits only available in Medicare Advantage, these financial protections make it clear why seniors and those with disabilities are choosing Medicare Advantage. These advantages benefit individuals of all incomes, but for low-income beneficiaries, these financial protections are enormously important to their ability to access health services.”

According to this analysis, Medicare Advantage plays a critical role in protecting financially vulnerable Medicare beneficiaries with low to modest income from out-of-pocket health costs.  

This analysis shines new light on the ability of Medicare Advantage to provide critical cost protections to beneficiaries relative to Traditional Medicare, particularly for those who are most financially vulnerable.

Here are three key findings:

• Low-income Medicare beneficiaries are more likely to choose Medicare Advantage, and fewer of them report experiencing the cost burden associated with out-of-pocket costs compared to low-income Medicare beneficiaries in Traditional Medicare.   Data show that 45.8% of Medicare Advantage enrollees live below 200% of the FPL, or $24,000 a year for a household size of one in 2018, compared to 37.6% in the Medicare FFS population during the time period.

• Medicare Advantage enrollees report lower average annual individual spending (out-of-pocket cost sharing plus premium costs). Medicare Advantage enrollees report total spending of $3,198 compared to Traditional Medicare beneficiaries who report total spending of $4,474. 

• Chronically ill Medicare beneficiaries are choosing Medicare Advantage at rates that mirror Traditional Medicare. Data show with regards to individuals with chronic obstructive pulmonary disease (COPD), 20% are enrolled in Medicare Advantage while 19.5% enrollees are in Traditional Medicare ; for those with diabetes, 33.1% are enrolled in Medicare Advantage, while 30.4% are enrolled in Traditional Medicare; and for those beneficiaries who report having  dementia or Alzheimer’s, 8.3% are enrolled in Medicare Advantage and 7.6% are enrolled in Traditional Medicare. 

BMA held a Briefing on this report today on Capitol Hill. Over 100 Congressional staffers and interested stakeholders attended.

To read the full report, please click here.