Beneficiaries in poor health can pay more out of pocket for care in Medicare Advantage managed care plans than in traditional Medicare with Medigap supplemental coverage, a new Commonwealth Fund report finds. (Click here to download the report.) The report says beneficiaries in poor health can spend up to $2,195 more in annual out-of-pocket costs for their care in 19 out of 88 plans than they would have in fee-for-service Medicare with Medigap supplements. Costs for beneficiaries in good health, however, were lower in all 88 MA plans and, for those in fair health, all but two MA plans had lower costs than fee-for-service plans.
"These findings raise questions about what Medicare is achieving with extra payments to private Medicare Advantage plans, which totaled more than $2.7 billion in 2005 over fee-for-service costs," said Fund President Karen Davis. The authors note that "if Medicare were to offer a true alternative to private coverage—such as a more comprehensive fee-for-service option—market forces could be expected to work more effectively, and beneficiaries could choose between comparable alternatives on an equal footing."
