A new analysis released by ATI Advisory and commissioned by Better Medicare Alliance finds a growing cost gap between Medicare Advantage (MA) and Fee-for-Service (FFS) Medicare.
MA beneficiaries spend an average of $2,541 less per year on out-of-pocket costs and premiums compared to those enrolled in FFS Medicare, according to the analysis, which based the report on the 2019 to 2021 Medicare Current Beneficiary Survey and Cost Supplemental files.
The findings come as 53 percent of Medicare enrollees—over 33 million individuals nationwide—choose Medicare Advantage for health care coverage, Better Medicare Alliance noted.
Researchers compared community-dwelling MA and FFS Medicare enrollees’ average total individual health care spending (inclusive of supplemental plan premiums) by income, race and ethnicity, and number of chronic conditions to understand how programs can better serve beneficiaries’ health care needs.
The findings represent an increase from last year, when ATI reported that MA beneficiaries spent more than $2,400 less per year, on average.
Reduced spending in the analysis extends across racial and ethnic groups and is even higher for clinically complex beneficiaries. The report shows that MA beneficiaries with three or more chronic conditions spend an average of $3,165 less per year compared to FFS enrollees.
“The takeaway from this analysis is clear: Medicare Advantage is the best value for seniors, and the gap with Fee-for-Service Medicare is only growing,” said Mary Beth Donahue, president and CEO of Better Medicare Alliance, a research and advocacy organization that support MA, in an announcement.
The report also found:
- On average, Medicare Advantage enrollees spent 40 percent less on health care expenses compared to FFS Medicare enrollees.
- Among beneficiaries with zero to two chronic conditions, FFS Medicare enrollees spent an average of $1,392, or 39 percent, more on health care expenses annually than MA enrollees.
- Among Black, Latino, and white enrollees, white enrollees had the highest total spending in both programs (MA $4,454, FFS $6,825), while Latino enrollees had the lowest total spending in both programs (MA $2,081, FFS $3,674).
- Most beneficiaries in both programs reported similar satisfaction with access to and quality of care.