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New Study: Medicare Advantage Costs Less than Original Medicare

Press Release

Apples-to-apples, average payments to MA plans are 7% less than original Medicare spending – saving Americans billions of dollars every year

Published Sep 21, 2022 • by AHIP

WASHINGTON, D.C. – (September 21, 2022) – Every American deserves access to affordable, high-quality health coverage – including the more than 29 million seniors and people with disabilities who choose Medicare Advantage (MA). Today, a new study offers more compelling data and evidence that MA delivers better value for patients, consumers, and taxpayers. The study, conducted by Wakely Consulting Group on behalf of AHIP, analyzed data on original Medicare costs used to compare MA and original Medicare spending. It finds that accounting for 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.

“Medicare Advantage is a prime example of government and the free market working together to provide millions of Americans with the care and coverage they need and deserve,” said Matt Eyles, AHIP President and CEO. “From grocery deliveries to vision, dental, and hearing benefits, to zero premium prescription drug coverage, Medicare Advantage helps keep seniors and people with disabilities healthy—and at a price they can afford. And as more Americans choose MA, health insurance providers remain committed to delivering better value for lower costs than original Medicare.”

For this study, Wakely Consulting Group examined data from 2019, and analyzed:

  • how original Medicare costs would change if it capped maximum out-of-pocket (MOOP) costs just as MA plans do, and
  • how costs change when looking only at original Medicare enrollees with both Part A and Part B – both of which are required to enroll in MA.

These savings are one more demonstration of how MA delivers better services, better access to care, and better value:

Nearly half of all racial/ethnic minorities eligible for Medicare choose MA.

MA covers more racially diverse populations (32%) than original Medicare (21%).

40% of MA enrollees make less than $25,000 per year. Many of these individuals might not be able to afford the out-of-pocket costs of original Medicare.

About 9 million MA enrollees have income below 200% of the federal poverty level.

57% of MA enrollees are women.

Seniors covered by MA are more satisfied than seniors with original fee-for-service Medicare. 93% are satisfied with their MA, while only 84% of those with original Medicare report being satisfied.

Click here to view the study.

Click here to view more AHIP MA resources.

About AHIP

AHIP is the national association whose members provide health care coverage, services, and solutions to hundreds of millions of Americans every day. We are committed to market-based solutions and public-private partnerships that make health care better and coverage more affordable and accessible for everyone. Visit to learn how working together, we are Guiding Greater Health.