Study Highlights the Cost Savings and Improved Health Outcomes of Medicare Advantage Plans

A recent study shows Medicare Advantage plans offer greater cost savings and better health outcomes than Original Medicare.

Published July 26, 2020

Medicare Advantage (Medicare Part C) beneficiaries experience lower out-of-pocket health care costs and better health outcomes than beneficiaries of traditional fee-for-service Medicare, according to a recent study conducted by the Better Medicare Alliance

Study highlights Medicare Advantage benefits such as telehealth, preventive care, dental, hearing and vision

Some of the notable findings of the report include:

  • Medicare Advantage beneficiaries saved $1,598 in out-of-pocket spending per year, compared to beneficiaries of Original Medicare (Medicare Part A and Part B).

  • Medicare Advantage beneficiaries paid one-seventh the amount paid by Original Medicare beneficiaries for inpatient hospital stays. 

  • The average monthly premium for Medicare Advantage plans decreased for the third consecutive year, down $3.87 per month from 2019 to 2020.

  • 80% of Medicare Advantage plans offer either vision, dental or hearing benefits, and more than 50% of plans offer all three. Routine dental, vision and hearing benefits are not typically covered by Original Medicare.

  • More than 600 plans offer telehealth services, making telemedicine available to 14 million Medicare Advantage beneficiaries.

  • Medicare Advantage beneficiaries experienced a 25% higher rate of access to annual preventive care than Original Medicare beneficiaries.

  • Medicare Advantage beneficiaries experienced fewer unnecessary and avoidable hospitalizations, as well as fewer overall hospital stays and emergency room visits.

Better Medicare Alliance is the one of the nation’s leading research and advocacy organizations supporting Medicare Advantage.

What is Medicare Advantage?

Medicare Advantage plans serve as an alternative option to Original Medicare, which is provided by the federal government.

Medicare Advantage plans are sold by private insurers and are required by law to provide all of the same basic benefits as Original Medicare. Most Medicare Advantage plans offer prescription drug coverage, which Original Medicare doesn’t cover.

Some plans also cover routine dental and vision care, hearing aids, gyms memberships, wellness programs and more. More than one out of every three Medicare beneficiaries now receives their coverage through a Medicare Advantage plan. 

The report also found that more than four out of five Medicare Advantage beneficiaries with prescription drug coverage belonged to a plan that was rated four stars or higher by the Centers for Medicare and Medicaid Services (CMS), which rates all Medicare Advantage plans every year.1

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1 Every year, Medicare evaluates plans based on a 5-star rating system.