Eligible kupuna can choose between traditional Medicare with or without a Medicare supplement and a Medicare Advantage Plan. More and more seniors are choosing Medicare Advantage Plans each year and it’s easy to see why: there are a growing number of options and plans providing benefits that Original Medicare doesn’t include. Now, we can add another reason to the list: lower out-of-pocket costs.
Better Medicare Alliance, the leading research and advocacy group supporting Medicare Advantage, recently released an analysis* conducted by ATI Advisory showing that Medicare Advantage beneficiaries report spending $1,640 less in their total annual health spending than those who are enrolled in Original Medicare. Medicare Advantage beneficiaries spent on average $3,354 on their out-of-pocket healthcare costs and premium compared to $4,994 for traditional Medicare beneficiaries on the same spending categories. On the other hand, there are similarities in satisfaction with medical care for all Medicare beneficiaries. A study by MCBS found that most Medicare beneficiaries living in the community are generally in good health and very satisfied with their Medicare coverage. Beneficiaries were happy when it came to key metrics such as the cost of Medicare, access to medical care, and the quality of care they receive.
*The analysis is based on 2018 Medicare Current Beneficiary Survey (MCBS) data, the most recent year available.
Why the Cost Burden Matters a lot to Low-Income Americans
For low-income Americans, the Medicare cost burden is especially important. (The cost burden is when someone spends 20% or more of their income on health care expenses). With 52.7% of people enrolled in a Medicare Advantage Plan living below 200% of the federal poverty level compared to 39.1% of traditional Medicare members, it’s a good thing that Medicare Advantage beneficiaries spend less out-of-pocket.