|Study Documents Benefits And Out-Of-Pocket Costs For Enrollees In Medicare Advantage
Two new reports using recent public data from the
Centers for Medicare and Medicaid Services document premiums and
benefits, along with out-of-pocket costs, Medicare Advantage enrollees
experienced in 2008 and describe how the plans are changing in 2009.
The first report documents how benefits and premiums in
Medicare Advantage plans with prescription drug coverage (MA-PDs)
changed from 2008 to 2009.
Highlights include the following:
- About 350,000 enrollees, mostly in private
fee-for-service plans, had to switch plans in 2009 because their 2008
plans were no longer offered.
- Enrollees favored lower-premium plans, with an average premium of $46 per month; 54 percent were in a plan with no premium.
- Almost all MA-PD plans in 2008 and 2009 offered an
"enhanced" Part D benefit (a plan with an actuarial value greater than
the standard Part D requirements). However, only 46 percent of
enrollees in 2008 were in a plan with a limit on out-of-pocket cost
sharing required for Medicare Part A and B benefits (hospital and
physician cost sharing).
The researchers estimated that the average MA-PD
enrollee paid $413 out-of-pocket in 2008 (and $421 in 2009), but the
amount varied widely across plans and was much higher in regional PPOs
($928 in 2008) and lowest in HMOs ($350) in 2008.
Regardless of plan type, costs were highest for
enrollees with chronic needs who need considerable care — ranging
from a low of $1,801 in HMOs to a high of $3,359 in regional PPOs.
The second publication offers a more detailed look at MA
benefit structures and how they compare to standard Medigap options. MA
plans simplify cost sharing for Medicare Part A and B benefits, with
most plans eliminating inpatient day limits and shifting from
deductibles and coinsurance towards fixed dollar copayments. Though
benefits vary across plans, MA enrollees typically receive much less
financial protection against high out-of-pocket costs than Medigap
Supplemental benefits tend to reduce cost sharing for
preventive care and provide a limited amount of coverage for relatively
predictable needs such as eyeglasses, hearing aids, and preventive
dental care. Findings also highlight the wide variability in benefit
structures across MA plans, even of the same type, and some challenging
distinctions that beneficiaries are asked to make when comparing
theseplans and original Medicare.
"The findings highlight characteristics that attract
beneficiaries but raise policy issues because financial exposure under
MA can remain relatively high," said Marsha Gold, lead author of the
study and a senior fellow at Mathematica. "Policymakers may want to
consider requiring out-of-pocket limits and enhanced education for
beneficiaries to better assess their financial exposure. Findings also
highlight ways of simplifying certain benefit structures to reduce
variation and make it easier for beneficiaries to compare plans."
Mathematica Policy Research Inc., conducted the research with support from the AARP Public Policy Institute.
Address: Mathematica Policy Research, Inc., P.O. Box 2393, Princeton, NJ 08543; (609) 799-3535, www.mathematica-mpr.com.