More than 4 out of every 10 Medicare beneficiaries is enrolled in a Medicare Advantage (Medicare Part C) plan. These plans, sold by private insurance companies, offer all the same benefits as Original Medicare (Medicare Parts A and B). Most Medicare Advantage plans also offer additional benefits such as prescription drug coverage, dental and vision care and other benefits not found in Medicare Part A or Part B.
These 26 million Medicare Advantage beneficiaries are made up of people in various states and of different ages, genders, races and ethnic backgrounds. And a recent study highlights how attractive these plans have especially become to Black beneficiaries.
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From the study, 49% of all Black Medicare beneficiaries are enrolled in a Medicare Advantage plan. 54% of Latino Medicare beneficiaries are enrolled in Medicare Advantage plans, making them the only ethnic group with a higher Medicare Advantage enrollment rate.
The study was conducted by ATI Advisory and is based on 2018 data, the most recent year demographic data of Medicare beneficiaries is available.
34% of White beneficiaries are enrolled in Medicare Advantage plans, while 31% of beneficiaries of other ethnicities are enrolled in Part C plans.
The decision to enroll in Medicare Advantage has been paying off for many Black beneficiaries.
According to the study, Black Medicare beneficiaries see an average annual savings of $1,270 when compared to those enrolled in Original Medicare. Annual out-of-pocket spending among Black beneficiaries averages $2,067 for those in Medicare Advantage plans, compared to $3,337 for those who have Original Medicare.
So why have Medicare Advantage plans become so popular among Black Medicare beneficiaries? The study did not gather data on any specific reasons why Black beneficiaries are choosing Medicare Advantage plans, but it does provide some data that may point to a few possible factors at play.
One might think that private Medicare insurance would be geared more toward beneficiaries of higher incomes. But the data suggests the opposite is true.
Across all racial and ethnic groups, Medicare Advantage members are more likely to be of lower income than those enrolled in Original Medicare. Many Medicare Advantage plans do not require a premium to belong to the plan, and many beneficiaries can often obtain coverage for prescription drugs, dental, vision and hearing benefits at no extra cost by joining a plan that includes these benefits.
According to the study, 77% of Black Medicare Advantage beneficiaries have a reported income of less than 200% of the federal poverty level, compared to 69% of Black beneficiaries enrolled in Original Medicare. Black Americans account for the largest percentage of people living in poverty, with a rate of 18.8% as of 2019.
Black Americans accounted for 34% of all Medicaid beneficiaries in 2018. And Medicaid beneficiaries who are also eligible for Medicare may be able to enroll in a particular type of Medicare Advantage plan known as a Dual-eligible Special Needs Plan (D-SNP). These plans are designed with the needs of Medicaid beneficiaries in mind and offer coordinated care and administration of Medicare and Medicaid benefits.
While 40% of all Black Medicare beneficiaries are eligible for Medicaid, 50% of Black beneficiaries in Medicare Advantage plans are eligible for Medicaid, according to the study.
People of color face higher rates of chronic conditions such as diabetes, heart disease and cancer than White Americans.
Chronic condition Special Needs Plans (C-SNP) are a type of Medicare Advantage plan built specifically for the unique health care needs of someone with a chronic condition. These types of Medicare Advantage plans can offer beneficiaries with particular conditions more complete care than Original Medicare.
Among Black Medicare beneficiaries, 46% of those enrolled in Original Medicare report having more than three chronic conditions, while 52% of those enrolled in Medicare Advantage report the same.
Not only are some Medicare Advantage plans tailored specifically to those with chronic conditions, but many plans offer additional benefits that are not found available in Original Medicare. These extra benefits found in some plans may include things like gym memberships, acupuncture, medical alert systems and more.
These extra benefits can make Medicare Advantage plans more attractive to those in poor health, and 35% of Black beneficiaries in Medicare Advantage plans rate their health as poor or fair, compared to 30% Black beneficiaries who have Original Medicare.
Many Medicare Advantage plans come in the form of Health Maintenance Organization (HMO) plans, which utilize a primary care doctor and coordination of care among the plan’s network of specialists for a more patient-focused approach to care.
Black Medicare beneficiaries face higher rates of negative social determinants of health (SDOH), which can include things like food insecurity.
Some Medicare Advantage plans may include benefits to address certain social determinants, such as providing discounts on healthy food options, coverage of over-the-counter health products and non-emergency medical transportation.
Black Medicare beneficiaries enroll in Medicare Advantage plans at a higher rate than the overall average. Some of the possible reasons for the popularity of Medicare Advantage plans among Black beneficiaries include the way these plans address the needs of Medicaid beneficiaries and those with chronic conditions or other negative social determinants of health.
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Christian Worstell is a licensed insurance agent and a Senior Staff Writer for MedicareAdvantage.com. He is passionate about helping people navigate the complexities of Medicare and understand their coverage options.
His work has been featured in outlets such as Vox, MSN, and The Washington Post, and he is a frequent contributor to health care and finance blogs.
Christian is a graduate of Shippensburg University with a bachelor’s degree in journalism. He currently lives in Raleigh, NC.
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