A new analysis conducted by ATI Advisory for Better Medicare Alliance finds that Medicare Advantage (MA) beneficiaries report a 35 percent lower rate of cost burden compared to fee-for-service (FFS) Medicare.
The study, based on 2019 Medicare Current Beneficiary Survey (MCBS) data, the most recent year available, finds MA beneficiaries report $1,965 less in total annual health spending (out-of-pocket costs and premiums) than those in FFS Medicare. The findings come in the wake of recent polling from Kaiser Family Foundation, which shows that addressing seniors’ out-of-pocket costs are among Americans’ top concerns for policymakers.
The study also found an increase of $325 in consumer savings compared to last year’s report. ATI Advisory’s 2021 analysis using 2018 MCBS data found $1,640 lower health spending in Medicare Advantage while an earlier study showed a savings of $1,598.
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In addition, the research shows that consumer savings in MA persist across race and ethnicity. Specifically, Black MA beneficiaries report $1,104 less in total health spending compared to FFS Medicare beneficiaries, while Latino MA beneficiaries see average savings of $1,421.
When considering rates of cost burden, defined as spending 20 percent or more of one’s income on health coverage, MA has a 35 percent lower rate of cost burden (13 percent in MA compared to 20 percent in FFS Medicare).
Average total spending (out of pocket and premium) among Medicare beneficiaries
"As this study shows, the path to meaningfully addressing Americans’ concerns about out-of-pocket costs and health care affordability and access for our nation’s seniors leads us to Medicare Advantage,” Mary Beth Donahue, president and CEO of the Better Medicare Alliance, said in a statement. “There is perhaps no more meaningful measurement of a program’s value than its effect on the consumer . . . With such robust cost protections across demographic groups, the value of Medicare Advantage for the Medicare dollar has never been clearer.”
Elena Rios, M.D., MSPH, MACP, president and CEO of the National Hispanic Medical Association, agreed. “Latino communities need and deserve coverage options that protect their health and financial wellbeing in equal measure. More than half of all Medicare-eligible Latinos continue to find that in Medicare Advantage,” she said. “The consumer savings seen across race and ethnicity, and the over $1,4000 in average annual savings specifically experienced by Latino beneficiaries, is a testament to Medicare Advantage’s continued role as a health coverage affordability and equity leader.”