Medicare Advantage Plans

Overview of the Medicare Advantage Program

An increasing number of Medicare beneficiaries are choosing Medicare Advantage (MA) plans.  Medicare Advantage plans offer a different approach to health care delivery than beneficiaries experience under fee-for-service Medicare.  Instead of focusing almost exclusively on treating beneficiaries when they are sick, these plans also place a strong emphasis on preventive health care services that help to keep beneficiaries healthy, detect diseases at an early stage, and avoid preventable illnesses.  In addition, MA plans help reduce beneficiaries’ out-of-pocket costs by providing additional benefits not covered in the Medicare program and reducing cost-sharing for Medicare-covered benefits.

Federal law authorizes different types of Medicare Advantage plans – including traditional HMO and PPO plans,  private fee-for-service (PFFS) plans, special needs plans (SNPs), and medical savings account (MSA) plans – that provide choices to beneficiaries in all areas of the nation. The Medicare Modernization Act of 2003 (MMA) revitalized the Medicare Advantage program, formerly known as “Medicare+Choice,” with adequate funding to meet the health care needs of beneficiaries.

Medicare beneficiaries in every county in all 50 states currently have the option of choosing one or more Medicare Advantage health plans. To date, more than 10 million beneficiaries – accounting for nearly 25 percent of all beneficiaries nationwide – have enrolled in such plans and are receiving comprehensive, high quality, affordable coverage with benefits and innovative services that go well beyond the coverage offered by the Medicare FFS program.

Extra Benefits:

• Vision, hearing, and dental benefits
• Home Care for Chronic Illnesses
• Prescription drug management tools integrated with medical benefits
• Wellness programs
• Enhanced coverage of Home Infusion, personal care and durable medical equipment
• Physical fitness programs

Innovative Health Care Services:

• Case Management Services 
• Disease Management Programs
• Nurse Help Hotlines

Reduced Out-of-Pocket Costs for Beneficiaries:

• Out of pocket maximums for beneficiaries on services such as inpatient hospital stays 
• Limits on cost-sharing for primary care physician visits 
• Reduced premiums for Part B 
• Reduced premiums for Part D 
• Reduced cost sharing for breast cancer screening 
• Reduced cost sharing for prostate cancer screening

Medicare Advantage Plans Provide Added Value to Beneficiaries:

The comprehensive benefits provided by Medicare Advantage plans are highly valued by beneficiaries, who realize significant cost-savings when they enroll in the Medicare Advantage program.  Consider the following findings:

• CMS has reported that Medicare Advantage enrollees are saving an average of almost $90 per month through improved benefits and lower out-of-pocket costs compared to what they would pay in the Medicare fee-for-service program. 
• A recent study for the Kaiser Family Foundation found that MA plans can significantly reduce cost-sharing for Medicare beneficiaries – up to $4,000 annually for beneficiaries with the highest health care needs.

Medicare Advantage Plans Improve the Quality of Care that Patients Receive:

Available data indicate that MA plans are providing enrollees with better access to care than the Medicare FFS program.  For example:

• CMS has reported that MA enrollees are less likely to report they had no doctor, had no usual source of care, or had trouble getting needed health care services than beneficiaries who had Medicare FFS alone.  The findings indicate that in 2005: 
  •  26% of beneficiaries with FFS only reported they did not have a usual doctor, compared to only 8% of MA enrollees; 
  • 17% of beneficiaries with FFS only said they delayed care because of cost, compared to only 6% of MA enrollees; 
  • 7% of beneficiaries with FFS only said they had trouble getting care, compared to only 3% of MA enrollees. 
• An analysis of data published in the Journal of the American Medical Association (Jencks, et. al. JAMA, January 15, 2003) and data compiled by the National Committee for Quality Assurance finds that Medicare Advantage plans outperform Medicare FFS in five of seven key HEDIS quality measures: Beta blockers after heart attacks; annual flu vaccines; breast cancer screenings; diabetes testing; and diabetes lipid screening. (AAHP 2003)

Medicare Advantage Enrollees Are Highly Satisfied:

According to a recent survey, MA enrollees are very satisfied with the program.  This survey found that 90 percent of beneficiaries enrolled in Medicare Advantage plans are satisfied with their coverage overall.  Other findings show that a large majority of beneficiaries are satisfied with the quality of care they receive (93 percent), the number of doctors from which they can choose (92 percent), the benefits they receive (89 percent), the coverage they receive for preventive care (87 percent), their out-of-pocket costs (80 percent), and the coverage they receive for prescription drugs (76 percent). 

Background Documents

The Impact of Proposed Cuts to Medicare Advantage

Millions of Seniors Rely on Medicare Advantage for Their Health Security

Medicare Advantage Provides Additional Benefits and Improved Quality Care

Medicare Advantage Has Bipartisan Support

Important Facts About Payments to Medicare Advantage

Medicare Advantage Enrollment Brief

Trends and Innovations in Chronic Disease Prevention & Treatment: An Update on Medicare Advantage Plans
An overview of key trends in chronic care, highlighting Medicare Advantage plans' recent innovations.

Low-Income & Minority Beneficiaries in Medicare Advantage Plans, 2006
Data from the Medicare Current Beneficiary Survey show that Medicare Advantage plans continue to be a vital source of coverage for low-income beneficiaries.

Low-Income and Minority Beneficiaries in Medicare Advantage Plans, 2004 (Overview; Full Report)
Data from the Medicare Current Beneficiary Survey show that Medicare Advantage plans were a vital source of coverage for low-income beneficiaries.

Low-Income and Minority Beneficiaries in Medicare Advantage Plans, 2002 (Full Report; Summary)
Data from the Medicare Current Beneficiary Survey show that Medicare Advantage plans were a vital source of coverage for low-income beneficiaries.

Press Releases

AHIP Statement on New CMS Guidelines for Agent and Broker Commissions in Medicare Advantage (Nov. 10, 2008)

AHIP: Low-Income and Minority Seniors Depend on Medicare Advantage (Sept. 22, 2008)