Although we did touch on Medicare Advantage plans in an earlier post while talking about value-based care, it seemed important to continue to explain what exactly makes Advantage plans so great. First, it is important to recognize how access to Advantage plans has improved nationwide; “In 2020, 99% of Medicare beneficiaries have access to at least one Medicare Advantage plan, with, on average, 39 plan choices per county,” according to the State of Medicare Advantage Report by the Better Medicare Alliance. The Treasure Valley has 41 Advantage plans in 2020. Unfortunately, outlying counties still have little or no access in Idaho. Once access isn’t an issue, though, the question becomes whether or not an Advantage plan is right for the individual. We have great plan options now offering wide networks not only in Idaho but also nationwide.
In terms of out-of-pocket costs, those enrolled in a Medicare Advantage plan saved around $1,598 compared to those enrolled in ‘Traditional’ FFS (Fee-for-service) Medicare. Traditional FFS Medicare beneficiaries also paid more on prescription drugs. Surprisingly, Medicare still spends roughly the same amount per beneficiary for both Advantage and Traditional FFS plans. This is achieved, once again, through the shift toward value-based care occurring in Advantage plans. With providers given incentives to improve ‘quality outcomes’ rather than for ‘volume of services,’ Medicare Advantage plans have been able to lower costs despite frequently offering more benefits. One study even found that, with more enrolled in Advantage plans, hospital costs ‘declined for all Medicare beneficiaries and other commercially insured populations.’ The Star Rating System–discussed in an earlier post–also plays a role in ensuring quality and accountability with plans.
But what kind of specific benefits do Medicare Advantage plans offer? Advantage plan beneficiaries save on prescription drugs and inpatient stays, and 80 percent of Advantage plans include hearing, vision, or dental benefits. Many plans also offer ‘non-medical supplemental benefits,’ which might include transportation, telehealth, a gym membership, over-the-counter supplies, and meals after a hospital stay. These benefits are made possible when plans ‘bid below the FFS benchmark,’ meaning that they are able to offer benefits at a lower cost than the Medicare standard, allowing the extra money from Medicare to be used for additional benefits. Having a higher star rating also increases the benchmark for these plans and thus the money they receive.
Want to learn more about Advantage plans and find out if one is right for you? Feel free to contact Elise (208)918-0201 or email her at danielinsuranceidaho@gmail.com.
(Sources: “State of Medicare Advantage Report” (July 2020) by the Better Medicare Alliance, “Medicare Advantage Program Payment System” (Revised October 2016) by Medpac, and HealthPayerIntelligence.com)