Medicare Advantage beneficiaries report $1,598 less in total annual healthcare spending than their traditional Medicare counterparts, which is an increase in savings over the previous year's survey figures, in which MA enrollees reported $1,276 less in total health spending than those in traditional Medicare.
The findings were released in a new data brief and fact sheet prepared for Better Medicare Alliance by ATI Advisory, and based on 2017 Medicare Current Beneficiary Survey data, the most recent year available.
WHAT'S THE IMPACT
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While there are many similarities between populations in Medicare Advantage and traditional fee-for-service Medicare, there are several significant differences, particularly in regard to financial protections and benefits, and in the demographic representation of low-income populations.
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 FFS Medicare. At the same time, Medicare Advantage beneficiaries report similar levels of satisfaction with healthcare quality and ease of getting to the doctor.
Medicare Advantage beneficiaries tend to be financially vulnerable: 50.3% of Medicare Advantage beneficiaries live below 200% of the federal poverty level, or $24,523 a year for those over 65 with a household size of one in 2017, compared to 40.1% in the FFS Medicare population. In contrast, only about a quarter of the Medicare Advantage population lives above 400% of the federal poverty level, compared to more than one third of the FFS population.
Rates of self-reported chronic conditions are similar across the Medicare Advantage and FFS Medicare populations, which highlights the fact that both groups have very similar clinical profiles. Almost 7% of Medicare Advantage beneficiaries report having congestive heart failure, 20% report chronic obstructive pulmonary disease, and about 4% report dementia or Alzheimer's.
These rates closely mirror rates of self-reported chronic conditions among Traditional FFS Medicare beneficiaries. The Medicare Advantage population, however, reports higher rates of diabetes: 35.2% in Medicare Advantage compared to 31.6% in traditional Medicare.
Medicare Advantage plans have the flexibility to offer cost and coverage policies that are different from those in FFS Medicare. For example, Medicare Advantage plans may have different cost sharing and deductibles than in FFS Medicare. Medicare Advantage plans are available to more than 99% of all Medicare beneficiaries, with an estimated average monthly premium of $23 per month in 2020.
THE LARGER TREND
The Centers for Medicare and Medicaid Services said in February it's giving Medicare Advantage plans a rate increase of less than 1%, which is less than half of what they received last year.
The .93% rate is the expected change in revenue for plans under the 2021 Medicare Advantage and Part D Advance Notice.
Last year the rate increased by 2.53% after CMS originally proposed 1.59%. CMS Administrator Seema Verma said at the time that the reason for the change was that CMS is continually updating information.