Medicare Advantage enrollees experience lower rates of hospital admission and lower rates of expensive and ineffective medical procedures in the last few months of life. In addition, the book cites research that shows Medicare Advantage costs ten percent less than traditional Medicare after using differences in mortality to control for other unobserved differences in health status. In addition, after controlling for health status, demographics, and geography, Medicare Advantage enrollees experienced 20-25 percent fewer hospitalizations and made 25-35 percent fewer emergency room visits.
From a review of Modernizing Medicare: Harnessing the Power of Consumer Choice and Market Competition by Greg Girvan at FREOP.
That’s a macro view of MA and it looks pretty good.
And from the inside it looks just as good to me. I’ve been in a MA plan since 2011. I like it mainly because
1. I need only deal with one company claims organization not four (I.e, Medicare Parts A, B, and D, plus a Medicare Supplement insurer). Only need 1 ID card, too.
2. No need to pay an additional premium for a Medicare Supplement policy, to fill the holes in Medicare coverage
3. No need to buy private insurance if vacationing out of the country
4. Simpler annual enrollment because of (1).
5 i’m in a group MA plan, so I keep my service-related company premium subsidy I earned as an active employee.
6. MA participation is voluntary and all participants have the right to switch to Original Medicare. If they want to.
In 2023, after two decades of steady growth, total enrollment in Medicare Advantage plans reached nearly 31 million persons. That’s a bit more than half (51%) of all persons eligible for Medicare. That’s a big statement about preferences.
John, regarding your item #6, MA participants may have the right to switch to original Medicare, but most states require them to pass underwriting in order to do so. It’s far easier to move from Medicare to Advantage, at least during the annual enrollment periods. I think it’s fairly common to start with a Medigap Plan G at 65, and eventually move to MA after premiums rise with age.
Original Medigap also has some advantages over MA, including:
1. Lack of copays may offset the higher premium, especially in younger years.
2. Flexibility to choose any Part D plan and change year to year, rather than accepting whatever your MA plan offers.
3. No delays waiting for pre-approval before needed tests or procedures.
4. No networks. Access any provider that accepts Medicare, anywhere in the country.
5. No need to switch plans if you move outside the current plan’s coverage area.
6. As mentioned above, you can always switch to MA at a later date if and when it makes sense to do so.
MA is definitely the best way to access the healthcare benefits that you need as you age. There are now many MA Plans to choose from in almost every market and their Provider networks are large and comprehensive. The financial savings are huge through MA Plans.
Bart thanks for pointing out there are also advantages to original Medicare. That illustrates why having a choice between both types of post-retirement insurance is valuable to seniors. The same shoe size does not fit all feet. Evidence of that value is that, In 2023, a bit more than half of all Medicare-eligible persons (51%) have chosen to enroll in a MA plan. That’s a big deal.
That said, I have a couple of comments to add to yours.
You say “MA participants may have the right to switch to original Medicare, but most states require them to pass underwriting in order to do so.”
I don’t think that’s right. States cannot set the Medicare eligibility and enrollment rules, the federales do. But if you meant Medicare Supplement, then I agree. In fact, most states permit Medicare Supplement insurers to require applicants to pass medical underwriting before issuing a policy – same as for any other individual policy of insurance.
On switching between plans, you can decline Medicare to enroll in MA one time and keep the right to return to Medicare. That’s what I did on my retirement date in 2011. But – if you later switch to original Medicare and then again leave to enroll in MA, I think you lose the right to return to original Medicare once again. Medicare allows only one bite at that apple.
When you say “original Medigap” in your 2nd paragraph, did you meant original Medicare?
On your item (5) yes if you move out of your MA service area you may need to find another MA plan. With either MA or original Medicare, moving will entail finding new physicians. In my case, if I had been thinking about moving when I retired, I would still have chosen MA because my children and grandchildren all live in cities where my MA insurer offers coverage. And in my case, my company offers uniform MA coverage to all U S retirees nationally. (It’s a big company). Because everyone does not have the same personal or family factors to consider, more choice is better. Half of Medicare eligible persons have chosen original Medicare, and half a MA plan.
You are correct that the coverage area for original Medicare is essentially the entire US (with a few exceptions)
You may recall that Pres. Obama and his administration sold Obamacare in 2009-2010 largely on offering more coverage choices, and more affordable choices, to the working-age population and to those without insurance. Oddly, at the same time, Pres. Obama expressed his goal of ending Medicare Advantage thereby reducing coverage choices for seniors. Medicare Advantage nevertheless survived and thrived, and its widespread popularity today shows what a mistake it would have been to end it.
John, sorry for the confusion. By “original Medicare” I really meant “Medicare + Supplement/Medigap.” I don’t think anyone in their right mind would switch from MA to naked Medicare without a supplement. That was sloppy writing on my part.
I think MA is a godsend to people who have trouble making the Medigap premium payment, particularly in later years when gap premiums start to increase. So I’m glad Obama & friends weren’t successful in eliminating it. It’s hard to imagine what would replace it.
Personally, I’ll probably switch to MA at some point, but for now I don’t mind paying a little more to keep my options open. I may also consider the high-deductible Plan G supplement, at something like $45 a month with a $2800 deductible.