A new study shows Medicare Advantage plans can save beneficiaries money on both premiums and out-of-pocket costs when compared to fee-for-service Medicare.
A new study shows that Medicare Advantage plans can deliver a significant cost value when compared to traditional Medicare (also known as fee-for-service Medicare, or FFS).
The report was published by UnitedHealth Group and was based on an average 72-year-old Medicare Advantage beneficiary who lived on a fixed annual income of less than $27,000 and had healthcare spending amounting to $3,632 in 2019.1
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According to the report:
The estimated annual health care costs for the example beneficiary ($3,632) were 39 percent less with a Medicare Advantage plan than they would have been with fee-for-service Medicare plus a Medicare Part D prescription drug plan and Medigap Plan F (the most popular Medicare Supplement Insurance plan), which would have totaled $5,960.
The estimated annual amount was also less with a Medicare Advantage plan than they would have been for fee-for-service Medicare with a Part D plan and Medigap Plan G, ($5,441), or with fee-for-service Medicare with just a Part D plan ($5,109).
Medicare Advantage (Medicare Part C) plans provide coverage for everything covered by Original Medicare, or fee-for-service Medicare (which includes Medicare Part A and Part B).
In addition, Medicare Advantage plans can include coverage for benefits Original Medicare doesn't cover.
Medicare Part D plans provide coverage exclusively for prescription drugs.
Medigap plans, also called Medicare Supplement Insurance, help cover some of the out-of-pocket costs that Original Medicare doesn’t pay for, such as deductibles, copayments and coinsurance.
It’s important to note that Medicare Advantage plans and Medigap plans are not the same thing. You cannot have a Medigap plan and a Medicare Advantage plan at the same time.
Medicare Advantage popularity on the rise
Due to a combination of stable costs and the extra benefits that some Medicare Advantage plans may offer, the Medicare Advantage market has seen a growing popularity in recent years.
In 2020, more than 34 percent of all Medicare enrollees belong to a Medicare Advantage plan. That compares to 23 percent of all Medicare beneficiaries in 2009, and just 13 percent in 2005.2
Medicare Advantage plan selection and costs can vary by location and provider.
You can learn more about Medicare Advantage plans in your area by calling to speak with a licensed insurance agent. You can also compare plans online for free, with no obligation to enroll.
Christian Worstell is a senior Medicare and health insurance writer with MedicareAdvantage.com. He is also a licensed health insurance agent. Christian is well-known in the insurance industry for the thousands of educational articles he’s written, helping Americans better understand their health insurance and Medicare coverage.
Christian’s work as a Medicare expert has appeared in several top-tier and trade news outlets including Forbes, MarketWatch, WebMD and Yahoo! Finance.
Christian has written hundreds of articles for MedicareAvantage.com that teach Medicare beneficiaries the best practices for navigating Medicare. His articles are read by thousands of older Americans each month. By better understanding their health care coverage, readers may hopefully learn how to limit their out-of-pocket Medicare spending and access quality medical care.
Christian’s passion for his role stems from his desire to make a difference in the senior community. He strongly believes that the more beneficiaries know about their Medicare coverage, the better their overall health and wellness is as a result.
A current resident of Raleigh, Christian is a graduate of Shippensburg University with a bachelor’s degree in journalism.
If you’re a member of the media looking to connect with Christian, please don’t hesitate to email our public relations team at Mike@tzhealthmedia.com.
1 UnitedHealth Group. Beneficiaries in Medicare Advantage Receive Better Value and Spend 40% Less than Beneficiaries in Medicare FFS. (Jan. 2020) Retrieved from https://www.unitedhealthgroup.com/content/dam/UHG/PDF/2020/UHG-Medicare-Advantage-Cost-Savings.pdf.
2 Jacobson, G. et al. (Oct. 24, 2019). Medicare Advantage 2020 Spotlight: First Look. Kaiser Family Foundation. Retrieved from www.kff.org/medicare/issue-brief/medicare-advantage-2020-spotlight-first-look.
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