title: Medicare beneficiary out-of-pocket costs: are Medicare Advantage Plans a better deal?
abstract: The creators of the Medicare Advantage (MA) program envisioned that seniors would opt out of fee-for-service Medicare to take advantage of the lower premiums, lower cost-sharing, and additional benefits available in private plans. Earlier research, however, indicates that out-of-pocket costs for MA enrollees vary widely by health status and plan benefit package. This issue brief examines out-of-pocket costs for beneficiaries in good, fair, and poor health throughout the country. In 2005, annual out-of-pocket costs for plan members ranged from under $100 for beneficiaries in good health to over $6,000 for those in poor health. Costs for beneficiaries in poor health would actually have been higher than fee-for-service in 19 of the 88 MA plans examined. Despite the high payments, relative to fee-for-service costs, that MA plans receive from Medicare to enrich enrollee benefits, these plans may not always be a good deal for sicker beneficiaries who use more health services.
authors.affiliation: Department of Health Policy, George Washington University School of Public Health and Health Services, United States.
authors.forename: Brian
authors.initials: B
authors.lastname: Biles
authors.forename: Lauren
authors.initials: L
authors.lastname: Hersch Nicholas
authors.forename: Stuart
authors.initials: S
authors.lastname: Guterman Stuart
mesh_terms: D000368:Aged; D017047:Cost Sharing; D003365:Costs and Cost Analysis / Q000191:economics / Q000706:statistics & numerical data; D018588:Fee-for-Service Plans / Q000191:economics / Q000706:statistics & numerical data; D005249:Fees and Charges; D006304:Health Status; D006801:Humans; D007342:Insurance Benefits; D008329:Managed Care Programs / Q000191:economics / Q000706:statistics & numerical data; D006278:Medicare / Q000191:economics / Q000706:statistics & numerical data; D014481:United States