Retirement insights from a Colorado PERA perspective

Issues & Perspectives

Report: Medicare Advantage Plans Cost Less, Provide Better Outcomes Than Traditional Medicare

Shot of a young doctor sharing information from his digital tablet with an older patient
Photo credit: PeopleImages/Getty Images

As enrollment in Medicare Advantage plans continues to grow, evidence is mounting that these comprehensive plans offer better outcomes and can even cost less for retirees than traditional Medicare.

In its annual “State of Medicare Advantage” report, the Better Medicare Alliance states Medicare Advantage enrollees spend almost $2,000 less per year on plan premiums and out-of-pocket costs than those enrolled in original Medicare.

Medicare Advantage vs. Traditional Medicare

Medicare Advantage plans are offered by private insurers and serve as “all-in-one” or “package” plans. They combine the benefits of Medicare Parts A (hospital insurance) and B (medical insurance) with Part D (prescription coverage) into one comprehensive plan. These plans also usually cover extra services that aren’t covered by original Medicare, like dental and vision and even gym memberships. They also have yearly limits on out-of-pocket spending on services that Part A and Part B cover, while original Medicare doesn’t.

Over the past decade, enrollment in Medicare Advantage plans has doubled to more than 28 million people, which amounts to 45% of all Medicare beneficiaries. In Colorado, that number is nearly 48%.

With a focus on preventive and primary care, Medicare Advantage plans help ensure that enrollees receive regular screenings and care so that any medical problems can be addressed before they become more serious and costly. The report from Better Medicare Alliance finds Medicare Advantage plans cover all Medicare-covered services for 24% less than traditional Medicare.

In addition to cost savings, the report also found patients enrolled in Medicare Advantage plans often have better health outcomes, including higher rates of vaccination and cancer screenings, lower rates of hospitalization, and higher rates of follow-up care.

With regard to COVID-19, Medicare Advantage enrollees were hospitalized at a nearly 19% lower rate in 2020 and had a lower mortality rate, according to the report.

Medicare Advantage and PERACare

Colorado PERA offers Medicare Advantage plans through its health benefits program, PERACare. PERACare includes three Medicare Advantage plans: two national PPO plans with UnitedHealthcare and a regional HMO plan with Kaiser Permanente of Colorado.

PERACare also includes a subsidy, based on years of service, to help offset the cost of plan premiums. The maximum subsidy in 2021 was $115, which, depending on the plan chosen, could result in a $0 premium for PERACare coverage.

“We chose to offer Medicare Advantage plans because we could offer plans with lower premiums and a more coordinated approach that delivers better health outcomes,” said Jessica Linart, PERA’s director of insurance. “We’re glad to see the information in this report supports our efforts.”

The open enrollment period for PERACare begins on Oct. 17 and continues through Nov. 17.

To learn more about PERACare’s Medicare Advantage plans, visit copera.org/peracare.

Comments

  1. Barry Northrop says:

    The Better Medicare Alliance is funded by the insurance companies UnitedHealthcare, Aetna, and Humana, and has been criticized as a front group for the health insurance industry.

    • Scott Johnson says:

      Be very careful with MA plans. Especially if you need more care than normal. Your out-of-pocket costs can rise. Do your homework. If you need help I recommend seeing a licensed agent. If you are under 65 or over 65 and you need to change plans you may need to fill out medical forms and include medical records. You can be denied insurance because of pre-existing conditions. Be very careful. If you are under 65 you get one reset at 65 without medical forms and medical records records. So pre-existing conditions will not be against you. I recommend checking every six months on part D for medication changes. Check sams club and Costco website for discounts on medications.

  2. Jim Wessely says:

    Medicare Advantage policies deny numerous tests requests recommended by my cardiologist in order to create better profits at the expense of the patient.

  3. Vicki Mossman says:

    While I would love dental , vision, and coverage for hearing aids, my doctor strongly advised against a Medicare Advantage plan for me because of my many illnesses. He said Advsntafe plans generally deny things like MRI’s, Ultrasounds, and other testing, even when the physician considers them necessary.

  4. Carolyn Elliott says:

    I am deeply concerned about the backstory with Medicare Advantage plans, because, as I have read in reputable sources, it is a means to privatize elder insurance by denying certain services. I am happy to pay a bit more to ensure I can receive the services my doctor recommends. Thank you.

  5. Betsy Kirkley says:

    For the sake of providing both sides of the issue, there was a federal report issued earlier in 2022 which the April 29, 2022 New York Times headlines stated Medicare Advantage Plans often deny needed care, federal report finds. Here is the link to U.S. Health & Human services article https://www.cmadocs.org/newsroom/news/view/ArticleId/49741/Federal-report-finds-Medicare-Advantage-plans-often-deny-necessary-care

    I would caution anyone looking to sign up for Medicare to carefully review both original Medicare, Supplement plan, & Medicare Part D along side of Medicare Advantage Plans. It is easier to sign up for original Medicare plan with supplement & Part D and in following years switch to an Advantage Plan if you are not happy with original Medicare than it is to sign up for Advantage Plan and if you are unhappy try to switch to original Medicare/supplement/ Part D. A Colorado State health Insurance Program (SHIP) counselor told me several years ago that the majority of Medicare insurance complaints were from individuals with Medicare Advantage Plans not from original Medicare plans with a supplement/Part D coverage.

    Keep in mind Better Medicare Advantage which provided the report quoted in this article is a research and advocacy group for Medicare Advantage Plans. I urge you to read the federal report before making a decision. For some people who don’t qualify for Medicare a PERA advantage plan may be their only option but for others shop and compare. I am not criticizing PERA and I will make the disclaimer that it is possible that PERA advantage plans are better than the average advantage plan. PERA does a good job in trying to provide PERA retirees with the best possible health insurance coverage. I do wish they still provided access to regular Medicare supplement plans in addition to their three Advantage Plans. My comments are mainly about advantage plans in general vs original Medicare and how people should explore both options before deciding.

    • Patty Jerman says:

      I do not have an Advantage Plan & never plan on getting one. I have read & also heard that the Advantage Plans often deny needed care. I have a great supplement (Cigna) that is very reasonable that I am happy with. Doing your homework is the key plus talking with people who have the different plans.

  6. wayne t descant says:

    do you deal with local drug stores. do you pay for xarelto. so i dont have to go to wal mart.

  7. kristine johnson says:

    What period of time is PERA obligated to continue with Medicare Advantage? I, like the commenters above, am somewhat dubious of the current plan—even though I am rather healthy and currently not paying a monthly premium, except for the earned PERA benefit. I appreciate all of the preventive attention, but in my case, United Health is preaching to the choir .

    I was denied a recent medication due to my age. A first, I might add. Thankfully, my pharmacy picked things up, but what else is in store??

  8. Brad Buckner says:

    We had Kaiser through PERAcare for 30+ years but after retirement found we could get the same basic Kaiser coverage going directly to Kaiser’s Senior Advantage program for $3000+ less in yearly premiums then by enrolling in Kaiser’s PERAcare seniors plan.

  9. Matt Young says:

    According to a headline in the New York Times this past April, “Medicare Advantage Plans Often Deny Needed Care, Federal Report Finds.” The subhead read, “Investigators urged increased oversight of the program, saying that insurers deny tens of thousands of authorization requests annually.” They should have put “Advantage” in quotation marks. Am I allowed a URL? We’ll see: https://www.nytimes.com/2022/04/28/health/medicare-advantage-plans-report.html.

  10. Carol Ford says:

    MA plans are often a disadvantage for we seniors, and this is shown in unbiased data. The Center for Medicare Advocacy provides unbiased commentary and research on all things Medicare – they are not funded by the government or any health insurance company and are a non-profit organization focused on providing exceptional advocacy, education and legal analysis to seniors and people with disabilities. Their advocacy has brought about positive change – for example: Medicare benefits supporting on-going therapies for those requiring them for on-going maintenance (like PT for those with Parkinson’s), and the interpretation of Medicare rulings like “observation” status in hospitals, training of nursing home staff and staffing ratios.

    https://medicareadvocacy.org

    Since the inception of PERA switching to MA plans, I have requested they once again include an option for an original Medicare supplement. I, along with many others I know, would gladly pay an increased premium to gain access to timely diagnostic testing and procedures without endless prior authorization reviews which many times end in denial and lead to a delay in diagnosis and treatment….and much frustration.

    Often older folks see the low premium of the MA plan and think it is great. It’s not until they encounter some of the difficulties MA’s present that they become disenchanted. MA plans are not universally helpful for older folks.

    I do appreciate PERA providing health insurance for all retirees! Thank you!

    Perhaps the Insurance Department in the future could consider the additional of an original Medicare supplement option would be much appreciated.

  11. Alan says:

    I haven’t had an issue with my Medicare Advantage plan, which I did not get through PERA. United Healthcare offers a zero premium/zero deductible plan in my area, with zero copay for primary care and Tier 1 generic meds.

    In my first year, I had five primary care and four specialist visits; five x-rays, three MRIs, a CAT scan, bone scan, steroid injections, and multiple lab tests. My out of pocket was under $600 total. I also receive $160/year credit for OTC meds and health supplies (bandages, cold remedies, even toothbrushes and toothpaste) For the current year, benefits have only gotten better, with lower copays for specialists, an expanded formulary, and lower out of pocket max.

  12. Richard Hagan says:

    Come on, PERA! Stop doing public relations for the health insurance industry! You must have a low opinion of your participants if you think they will not see through this for what it is.

  13. Roxana says:

    I agree with the general complaints in these comments about MA and our current PERA options. We have lost significant services since the switch to UHC MA. The prescription service is not working well for me. I have noticed the doctor’s office is less helpful as well and I suspect this is because of the lower payments they are getting for services.

    I understand the game PERA decided to play by going for lowest bid but there is little regard for quality of service and care. This is the insurance industry plan to pit healthy against those with serious medical care needs. If you are handicapped, suffer from chronic illness or in a serious accident you can figure you are going to have a harder time getting treatment and care that you need long term.

  14. Roxana says:

    I am also very concerned about the Optum mail order service and don’t understand who is in charge – why if the Part D is run by United Health Care do we have to deal separately with Optum? Is Optum part of UHC or is UHC part of Optum? Optum is a massive medical corporate enterprise of its own and is opening clinics and services on every street corner. If they are actually part of UHC there is probably some major takeovers occurring in order for them to become the largest medical services monopoly. This is only going to get worse as this country refuses to provide affordable healthcare for every citizen.

  15. Terry L. Campbell says:

    I agree with this article when it states that costs are less up front. HOWEVER, in a personal experience with my father, we learned that Medicare does not make decisions when you are filing claims for coverage, the decisions are made by your plan administrator. And even though it SHOULD have been the same coverages as Medicare itself, we felt ( and were told by doctors, nurses and even administrators at the facility who ALL advised us not to use a Medicare advantage plan if we had a choice) that the decisions made by the Plan were not in line with what we felt the Plan should have covered when knowing what Medicare itself would have covered. If you look at the savings up front, and compare it to what a supplemental plan would cost, take into account a supplemental plan’s deductibles vs the co-pay costs that you might incur depending on your claim, you may see that the additional costs for a monthly supplemental plan are a better choice. I sincerely hope that PERA will look at providing retirees with the choice of a supplemental plan as well as a Medicare Advantage plan so that retirees who WANT the Supplemental Plan can still take advantage of their retirement benefits.

  16. Roxana says:

    I wonder too if there is anyone on the PERA Health Care team making the plan option decisions who are actually of Medicare age. It is never good for people unfamiliar with the demographic they are supposed to be looking out for. Are there actually retirees on the selection committees and plan review teams or is it just being driven by the “lowest cost option” criteria?

    The younger members need to recognize what we lose today will come around eventually and affect them in the long run.

  17. Rod McGee says:

    I honestly don’t understand the complaining about pera’s united health plans. For me it is so much better than the anthem supplement plan before it is not even funny. I have been to my primary care provider many times during the year and have not had a claim denied. I have had total knee replacement done recently ( 6 weeks ago) had to overnight in hospital for observation because I had a history of a-fib. I fully expected to pay the 300 copay for hospital. I have yet to be billed by the hospital. My cardiologist ordered numerous tests before procedure and none were denied. I pay out of pocket 35.00 dollars per month and has been well worth it. My PT has been quite extensive through out the year and have yet to recieve any bill.
    So….what are you people talking about?

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