Medicare Advantage delivers $32.5 billion, or $123.36 per member per month, in additional value to beneficiaries, according to a report released Thursday by the Better Medicare Alliance (BMA).
Hospital and physician services are 24% less expensive per month: $709.66 for MA plans per month and $935.67 for Medicare FFS. These statistics exclude administrative expenses and profits, according to the report.
“Even with 5% lower FFS Medicare costs for Medicare-covered services, MA is still less expensive in total program costs than FFS,” the report said, referencing a sensitivity analysis which adjusted FFS comparator population costs +/- 5%.
The 5% margin accounts for unadjusted coding and different eligibility statuses for which data was not available.
MA plan benefits are “at least as generous” as what Medicare fee-for-service (FFS) provides for less cost, the report said, thanks to lower out-of-pocket costs and additional benefits to choose from, compared to Medicare FFS.
The advocacy group’s research arm — the Center for Innovation in Medicare Advantage — commissioned the report, which was conducted by management consulting company Milliman.
“At a time when lawmakers are weighing important policy considerations for seniors’ health care, Milliman’s findings speak to the value that Medicare Advantage delivers not only for seniors, but also for the health care system,” Mary Beth Donahue, president and CEO of BMA said during the organization’s second day of its MA Summit event on Thursday.
Donahue refers to the Biden Administration’s Build Back Better legislation currently being discussed by Congress. Advocates for Medicare Advantage are concerned the bill’s expansion of Medicare FFS to include vision, dental and hearing needs would come at a cost for MA beneficiaries.
“We’re not opposed to adding new benefits in fee-for-service Medicare, but there’s particular interest in ensuring that it’s not paid on the backs of Medicare Advantage beneficiaries,” Donahue said during an MA Summit session yesterday.
Congressman Darren Soto (D-Fla.), a speaker at BMA’s event today, said that MA will continue to be the “high quality program” it is right now. No new fees or taxes will be tied to the expansion, Soto said.
“We want to make sure we create options for everyone, but I suspect we’ll see a still remaining strong preference for Medicare Advantage in Florida, given its popularity,” added Soto.
Soto’s Central Florida district has one of the highest MA penetration rates in the country — 60% of Medicare-eligible seniors choose Medicare Advantage, according to BMA data.
“There’s a lot of retirees in Florida, more in South Florida, but still a fair amount in places in my district, like in Poinciana or in some of the others like Championsgate … you combine all those factors and Medicare Advantage is a popular ticket in Central Florida,” noted Soto.
Still, one in five seniors don’t know the difference between Medicare Advantage and Medicare FFS, according to a poll conducted by BMA.
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