When it comes time for you to enroll in a Medicare plan, you may be torn between Original Medicare (Part A and Part B) and Medicare Advantage. Although Original Medicare will give you access to a wider network of covered doctors and hospitals, a new study revealed that Medicare Advantage plans save their enrollees more money each year.
How do Medicare Advantage plans save you money?
The Kaiser Family Foundation compared spending between two groups. The first group had Original Medicare in 2015; the second group had Original Medicare in 2015 but switched to Medicare Advantage in 2016.
The study revealed that those who switched to Medicare Advantage in 2016 saved an average of $1,253, including additional savings like:
- $1,072 on diabetes care,
- $1,410 on asthma medication and treatment, and
- $1,517 on breast and prostate cancer treatment.
People with chronic health conditions are more likely to save more money with Medicare Advantage as well. Those with three or more chronic conditions saved $1,070, while those with four or more chronic conditions saved $2,773.
Are Medicare Advantage enrollees healthier?
One reason for all the savings could be that people with Medicare Advantage are generally healthier. Another study performed by Avalere Health found that Medicare Advantage enrollees had one-third fewer ER visits and 23 percent fewer hospital visits.
When compared to Original Medicare enrollees, those with Medicare Advantage:
- Are more likely to be discharged to their home rather than a nursing home following hospitalization,
- Typically see specialists and receive inpatient procedures less often,
- Receive less healthcare from hospitals, and
- Receive fewer knee and hip replacements.
What’s the catch?
Medicare Advantage plans vary based on location, and this may also affect the quality and quantity of plans available in your area as well as how much you could save. For example, those in Los Angeles county who switched to Medicare Advantage saved $6,278, while those in Mecklenburg, NC ended up spending $4,072 more due to limited plan options.
If you live in an area with a large population of Medicare enrollees like Florida or Arizona, you may have more Medicare Advantage plans available to you. The opposite is true if you live in areas that are more sparsely populated, like North Dakota.
To find a Medicare Advantage plan in your area, use Medicare’s Plan Finder.