Understanding Medicare Advantage

Medicare Advantage is critical to providing comprehensive healthcare benefits to Americans.  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

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 from 2021 to 20221. As of 2022, 91% of individual MA plans are offering dental coverage, 97% are offering vision coverage, and 94% are offering hearing exams and / or hearing aids2. Additionally, 69% of individual MA plans are offering a meal benefit and 50% are offering transportation services.  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. Milliman, Overview of Medicare Advantage Supplemental Healthcare Benefits and Review of Contract Year 2022 Offerings, February 2022. https://bettermedicarealliance.org/wp-content/uploads/2022/03/MASupplemental-Benefits-Milliman-Brief_20220225.pdf

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

4. NIH, Traveling Towards Disease: Transportation Barriers to Health Care Access, December 2013. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4265215/?utm_source=EWSE+March+2017+Newsletter&utm_campaign=EWSE+Mar+2016&utm_medium=email 

Minorities Disproportionately Rely Upon MA 

Recent survey data shows that 53% of Hispanic beneficiaries and 49% of Black beneficiaries are enrolled in MA, compared to just 31% of other minorities and 34% of white beneficiaries1. More than half of all Medicare Advantage beneficiaries have an annual income of less than $25,000, and an estimated 77% of Black and 80% of Hispanic Medicare Advantage beneficiaries have incomes 200% below the federal poverty level2.

1. Better Medicare Alliance, Medicare Advantage Outperforms FFS Medicare on Cost Protections for Low-Income and Diverse Populations, April 2022. https://bettermedicarealliance.org/wp-content/uploads/2022/04/BMAMedicare-Advantage-Cost-Protections-Data-Brief_FINv2.pdf

2. Analysis by ATI Advisory; Data Brief: “Medicare Advantage Offers High Quality Care And Cost Protections To Racially And Ethnically Diverse Beneficiaries,” June 2021; BMA_2021-Q2-Data-Brief_6.15.21.pdf

Keeping Costs Low

With more flexible coverage and plan design, and increased incentives to keep costs low, the average annual spending by Medicare Advantage beneficiaries is $1,965 lower compared to those in fee-for-service Medicare1. Medicare Advantage beneficiaries also report less cost-burden (spending 20% or more of their income on out-of-pocket costs and premiums) than those in fee-for-service Medicare1. Nearly 70% of enrollees pay $0 premium for their MA and Part D coverage2.

1. Analysis by ATI Advisory; Data Brief: “Medicare Advantage Outperforms Fee-For-Service Medicare on Cost Protections for Low-Income and Diverse Populations,” April 2022; https://bettermedicarealliance.org/wp-content/uploads/2022/04/BMA-Medicare-Advantage-Cost-Protections-Data-Brief_FINv2.pdf

2. Kaiser Family Foundation, "Medicare Advantage 2023 Spotlight: First Look," November 10, 2022. https://www.kff.org/medicare/issue-brief/medicare-advantage-2023-spotlight-first-look/ 

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