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Medicare Advantage: Delivering Better Value for America’s Seniors


Published Sep 21, 2022 • by AHIP

Every day, more than 29 million seniors and people with disabilities depend on Medicare Advantage (MA) for the care they need. MA delivers better services, better access to care, and better value to its members. And with 40% of MA enrollees making less than $25,000 per year, value is important as many of these individuals might not be able to afford the out-of-pocket costs of original Medicare.

That value can be found in additional benefits not covered by original Medicare, including a cap on out-of-pocket costs. Many MA plans offer zero premium drug coverage and integrated vision, dental, and hearing benefits, and wellness programs. Other MA plans offer transportation and meal delivery benefits, in-home support services, and companion care—all to help meet the unique care needs of the people they serve.

Further a new study by Wakely Consulting Group provides even more evidence that MA delivers better value for patients, consumers, and taxpayers. The study analyzed data on original Medicare costs used to compare MA and original Medicare spending. The results? When looking at comparable MA coverage and enrollee populations, average original Medicare costs were 9.4% higher than government estimates in 2019.

It is clear from Wakely’s study that rather than being more expensive than original Medicare, MA is actually significantly less expensive, even accounting for all the extra benefits and services the program provides. For example, in 2019, rather than being 2% more expensive than original Medicare, on an apples-to-apples basis, average MA spending was actually about 7% lower than original Medicare.

This study contradicts reports that taxpayers and those in original Medicare do not realize any savings from MA plan efficiencies. In fact, MA helps drive down costs for taxpayers— in addition to these savings, the more people who enroll in MA, the slower costs grow for original Medicare.

MA is a prime example of the government and free market working together to deliver lower costs, more choices, and better outcomes for the American people. Health insurance providers are committed to protecting and strengthening MA so that it can continue to improve the health and financial stability of the millions of Americans it serves.