A study found Medicare Advantage members spend 40% less per year than people enrolled in traditional Medicare and receive better value.
Medicare beneficiaries estimated out-of-pocket spending is a key factor in choosing between Medicare Advantage and traditional Medicare coverage.
According to the study from UnitedHealth Group, the average annual spending, including premiums and out-of-pocket costs, for people enrolled in traditional Medicare with a prescription drug plan was $5,361. The annual spending increases to $5,992 on average per year for those who add the Medigap policy.
However, the study found that annual spending was $3,558 per person for those on Medicare Advantage. Over 21 years, MA beneficiaries can expect about $64,000 to $99,000 in savings from lower annual spending.
Medicare Advantage plans also offer better value with enhanced benefits and financial protection, not offered by traditional Medicare, including caps on annual out-of-pocket costs and supplemental services like dental, vision, hearing, and non-emergency transportation.
Earlier this year, the Better Medicare Alliance (BMA) shared a similar finding. According to the BMA study, Medicare Advantage plan holders spend $1,640 less each year compared with traditional Medciare beneficiaries. Since half of Medicare beneficiaries live on fixed annual incomes below $29,650, it is no wonder that the study also found that lower-income beneficiaries are more likely to choose Medicare Advantage.
Click here to read the full story by UnitedHealth Group.