Understanding Medicare Advantage

Medicare Advantage is critical to providing comprehensive healthcare benefits to Americans. With America approaching a demographic turning point, this has become even more important. Learn more about the unique aspects of Medicare Advantage and navigate to additional resources below.

What is Medicare Advantage?

For over 20 years, the Medicare Advantage program has been integral to the Medicare guarantee, offering choices and meeting the comprehensive healthcare needs of American seniors. Under this public-private partnership, plans must cover the same services as fee-for-service Medicare. The savings generated through care coordination are reinvested into lowering beneficiaries’ premiums and out-of-pocket costs and providing supplemental benefits such as dental, vision, hearing, meals, and transportation. Medicare Advantage premiums are at a 15-year low of $18/month1. With a limit on out-of-pocket costs and often Part D prescription drug coverage included, MA plans deliver cost-effective, high-quality coverage for today’s seniors–while covering all services provided under FFS Medicare.

^{1. CMS, Biden-Harris Administration Announces Lower Premiums for Medicare Advantage and Prescription Drug Plans in 2023, September 2022. https://www.cms.gov/newsroom/press-releases/biden-harris-administration-announces-lower-premiums-medicare-advantage-and-prescription-drug-plans}

_{Source: Census: https://www.census.gov/content/dam/Census/library/publications/2020/demo/p25-1144.pdf}

More Supplemental Benefits

In addition to covering the same services as fee-for-service Medicare, nearly all Medicare Advantage (MA) plans provide supplemental benefits, such as dental, vision, hearing, meals, and transportation. The percentage of plans offering such types of benefits has generally increased over the years¹. As of 2023, 99% of individual MA plans are offering vision coverage, 97% are offering dental coverage, and 97% are offering hearing exams and/or hearing aids². Additionally, 84% of individual MA plans are offering a meal benefit and 63% are offering transportation services³. In 2024, all Humana Special Needs Plans (SNPs) will include dental, vision, and hearing benefits⁴: this will benefit people with chronic conditions like diabetes or cardiovascular disorders, as well as those who are dual eligible for Medicare and Medicaid. A growing body of research suggests factors related to social determinants of health (such as lack of access to healthy food³, housing, transportation⁴) have a profound impact on health outcomes. Supplemental benefits under MA can help reduce health-related disparities.

1. Avalere, More Medicare Advantage Plans will Offer Non-Medical Benefits in 2022, October 2021. https://avalere.com/insights/more-medicare-advantage-plans-will-offer-non-medical-benefits-in-2022

2. Better Medicare Alliance, "State of Medicare Advantage 2023 Report," 2023. https://bettermedicarealliance.org/publication/state-of-medicare-advantage-2023

3. Feeding America, State of Senior Hunger, May 2022. https://www.feedingamerica.org/research/senior-hunger-research/senior

4. Humana, "Medicare Advantage Chronic Condition Special Needs Plans," 2023. https://www.humana.com/medicare/medicare-advantage-plans/humana-special-needs/c-snp#:~:text=All%20C%2DSNPs%20are%20required,dental%2C%20vision%20and%20hearing%20benefits

Minorities Disproportionately Rely Upon MA

Recent survey data shows that the majority of eligible Black and Latino Medicare beneficiaries choose Medicare Advantage coverage¹. Additionally, more than half of all Medicare Advantage beneficiaries have annual incomes below 200% of the federal poverty level (FPL), including an estimated 78% of Black and 81% of Latino Medicare Advantage beneficiaries².

1. Better Medicare Alliance, "State of Medicare Advantage 2023 Report," 2023. https://bettermedicarealliance.org/publication/state-of-medicare-advantage-2023

2. Analysis by ATI Advisory; "Medicare Advantage Beneficiaries Spend Less on Health Care Premiums and Out-of-Pocket Costs than Fee-For-Service Beneficiaries," 2023. Figure 1. https-atiadvisory-com-resources-wp-content-uploads-2023-03-ma-cost-protections-data-brief-2023-pdf. In 2020, the federal poverty level was $12,760 per year for a household of one and $17,240 for a household of two.

Keeping Costs Low

With more flexible coverage and plan design, and increased incentives to keep costs low and provide preventative care, the average annual spending by Medicare Advantage beneficiaries is $2,400 lower compared to those in fee-for-service Medicare1. Medicare Advantage plans are federally required to provide an out-of-pocket limit for services covered under Parts A and B, while traditional Medicare does not have out-of-pocket limits². Additionally, over 70% of enrollees pay $0 premium for their MA and Part D coverage².

1. Analysis by ATI Advisory; "Medicare Advantage Beneficiaries Spend Less on Health Care Premiums and Out-of-Pocket Costs than Fee-For-Service Beneficiaries," 2023. https://atiadvisory.com/resources/https-atiadvisory-com-resources-wp-content-uploads-2023-03-ma-cost-protections-data-brief-2023-pdf/

2. Kaiser Family Foundation,"Medicare Advantage in 2023: Premiums, Out-of-Pocket Limits, Cost Sharing, Supplemental Benefits, Prior Authorization, and Star Ratings," 2023. https://www.kff.org/medicare/issue-brief/medicare-advantage-in-2023-premiums-out-of-pocket-limits-cost-sharing-supplemental-benefits-prior-authorization-and-star-ratings/

Better Quality Care

Medicare Advantage beneficiaries as a whole have more complex medical conditions compared to fee-for-service Medicare. As a result of increased emphasis on the quality of care under Medicare Advantage, Humana’s Medicare Advantage beneficiaries experienced 33% fewer emergency department visits and 23% fewer inpatient stays than those in fee-for-service Medicare¹. Medicare Advantage beneficiaries also have better outcomes for specific health conditions, such as prediabetes and diabetes, where Medicare Advantage patients were more likely to receive preventive care².

1. Avalere, “Medicare Advantage Achieves Better Health Outcomes and Lower Utilization of High-Cost Services Compared to Fee-for-Service Medicare,” 2018. https://avalere.com/press-releases/medicare-advantage-achieves-better-health-outcomes-and-lower-utilization-of-high-cost-services-compared-to-fee-for-service-medicare.

2. Avalere, Comparing Detection, Treatment, Outcomes, and Spending for Patients with Type 2 Diabetes Between Medicare Advantage and Fee-For-Service Medicare, January 2023. https://bettermedicarealliance.org/wp-content/uploads/2023/01/Avalere-Diabetes-Progression-Whitepaper_1.10.23.pdf

Making Drug Coverage Affordable

Nearly all Medicare Advantage plans offer prescription drug coverage with their plans and 89% of Medicare Advantage enrollees receive prescription drug coverage with their plans¹. In 2022, the average monthly premium for Part D prescription drug coverage was $33.

1. Centers for Medicare & Medicaid Services, “CMS Releases 2022 Premiums and Cost-Sharing Information for Medicare Advantage and Prescription Drug Plans,” September 30, 2021. https://www.cms.gov/newsroom/ press-releases/cms-releases-2022-premiums-and-cost-sharing-information-medicare-advantage-and-prescriptiondrug

Expanding Care in Rural Areas

According to CMS, roughly 61 million Americans who live in rural, tribal, and geographically isolated communities experience significant health inequities. Medicare Advantage plans are making health care more affordable than ever for seniors and others with Medicare in rural communities: The average monthly premium for an MA plan in 2023 is $18¹, a 16-year low, and 69% of beneficiaries with MA plans in rural areas are enrolled in $0 premium plans.² Today, 40% of all eligible Medicare beneficiaries in rural counties are enrolled in an MA plan, four times the share in 2010.³

^{1. Better Medicare Alliance, "State of Medicare Advantage 2023," 2023. https://bettermedicarealliance.org/publication/state-of-medicare-advantage-2023; 2. Kaiser Family Foundation, "Medicare Advantage Enrollment, Plan Availability and Premiums in Rural Areas," 2023. https://www.kff.org/medicare/issue-brief/medicare-advantage-enrollment-plan-availability-and-premiums-in-rural-areas; 3. Ibid; 4. Kaiser Family Foundation, "Medicare Advantage 2024 Spotlight: First Look," 2023. https://www.kff.org/medicare/issue-brief/medicare-advantage-2024-spotlight-first-look; 5. Humana, "Humana’s 2024 Medicare Advantage Health Plan Offerings Designed With Affordability, Customer Feedback in Mind," 2023. https://press.humana.com/news/news-details/2023/Humanas-2024-Medicare-Advantage-Health-Plan-Offerings-Designed-With-Affordability-Customer-Feedback-in-Mind/default.aspx#gsc.tab=0}

^{2. CMS, https://www.cms.gov/blog/addressing-rural-health-inequities-medicare}

Growing Consumer Choice

Their choices have also increased: Today, rural Medicare Advantage enrollees can choose from among 27 plans, on average—triple the number of plans available five years ago.¹ Humana is committed to continuing to increase access to quality, affordable care in rural areas to support and enhance the lives of people who need it the most. In 2024, Humana will have plans in every county in 27 states and Puerto Rico,² including offerings in 39 new counties—many of them rural.³

1. Kaiser Family Foundation, "Medicare Advantage Enrollment, Plan Availability and Premiums in Rural Areas," 2023. https://www.kff.org/medicare/issue-brief/medicare-advantage-enrollment-plan-availability-and-premiums-in-rural-areas

2. Kaiser Family Foundation, "Medicare Advantage 2024 Spotlight: First Look," 2023. https://www.kff.org/medicare/issue-brief/medicare-advantage-2024-spotlight-first-look

3. Humana, "Humana’s 2024 Medicare Advantage Health Plan Offerings Designed With Affordability, Customer Feedback in Mind," 2023. https://press.humana.com/news/news-details/2023/Humanas-2024-Medicare-Advantage-Health-Plan-Offerings-Designed-With-Affordability-Customer-Feedback-in-Mind/default.aspx#gsc.tab=0

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