Medicare Advantage generates big savings for seniors
Compared to Medicare pay-per-service, seniors save about $ 2,000 on average in total annual health care spending with Medicare Advantage (MA).
This is according to a new study, based on data from the current Better Medicare Alliance’s 2019 Medicare Beneficiary Survey. The study includes an analysis by research and consulting firm ATI Advisory, based in Washington, DC.
Specifically, MA recipients report $ 1,965 less in total annual out-of-pocket costs and premiums than Medicare pay-per-service recipients.
One of the ways MA offers cost protections to beneficiaries is through cost sharing and premium rewards, said Allison Rizer, principal and chief commercial officer of integrating Medicare-Medicaid and LTSS into ATI Advisory, said Home Health Care News.
“Medicare Advantage plans have a wide latitude to use their discount dollars on a variety of benefits, and a common approach is to use those dollars in cost protections,” he said. “Other examples of benefits may include home support, social benefits, and other complementary services that may reduce hospitalizations and the use of emergency services. As a result of this improvement in medical use, out-of-pocket costs one person down “.
Between 2018 and 2019, health care spending increased 5% for MA recipients and 9% for Medicare pay-per-service recipients.
The report also found that having a lower average health care expenditure reduced the overall “cost burden,” that is, spending more than 20% of revenue on health care costs for MA beneficiaries. . About 13% of MA recipients experience a cost burden, compared to 20% of Medicare beneficiaries for a service fee.
This is noteworthy because low-income Medicare beneficiaries are more likely to enroll in MA than higher-income beneficiaries, according to the study.
In 2019, average total spending among beneficiaries was $ 3,524 on MA and $ 5,489 on Medicare.
In addition, the researchers found that MA cost savings were observed when it came to race and ethnicity.
In fact, Black MA beneficiaries saw $ 1,104 less in total health spending compared to their Medicare pay-for-service counterparts. Latino MA beneficiaries earned an average savings of $ 1,421.
“Perhaps there is no more significant measure of a program’s value than its effect on the consumer,” Mary Beth Donahue, president and CEO of the Better Medicare Alliance, said in a press release. “At Medicare Advantage, we see that consumers are saving nearly $ 2,000 a year compared to FFS Medicare – a savings that have continued to grow in recent years and are even more valuable considering that more than half of “Medicare Advantage lives below 200% of the poverty line. With such robust cost protections across demographics, the value of Medicare Advantage for the Medicare dollar has never been clearer.”
A key issue for home care providers is the importance of developing relationships with MA plans as enrollment continues to grow, according to Rizer.
By context, enrollment in the MA has increased by 8.3%, on average, over the last five years. Between 2019 and 2020, enrollment increased by 9.5%. MA penetration reached 46.6% in March 2021, according to data from the post-acute analysis and metrics firm Trella Health.
Rizer believes MA plans are open to the benefits that partnering with providers will bring to its members.
“Medicare Advantage plans want to innovate in the delivery of care that translates into better experiences for beneficiaries and a more effective and efficient use of the service,” he said. “Home care providers can serve as an important partner in these endeavors. They have a vision of a person’s life that is incredibly valuable and can help meet the needs rather in a person’s care journey “.