Alert
Close

How Does Your Brain Score? Take the Staying Sharp Brain Health Assessment

AARP Releases Myths & Facts about Medicare Advantage

WASHINGTON—AARP today released five myths and facts about private plans in Medicare. Medicare Advantage (MA) is an important part of the Medicare program, but right now the program is costing too much. The $54 billion in excess payments private MA plans in Medicare are due to receive should be used to improve the Medicare program by keeping premiums down as access to doctors is preserved.

“To give people in Medicare access to doctors and protect premiums, Congress should stop subsidizing private insurance companies in Medicare with excess payments,” said AARP Government Relations Director David Sloane. “Premiums for Part B are skyrocketing and we can’t afford to put the costs of physician payments on Medicare members. Stopping the subsidies to private insurance companies is the smart and responsible way to improve Medicare for everyone in the program.”

Myth: Medicare Advantage provides better benefits at lower costs for most people in Medicare

Facts:
- Extra benefits only go to the 20 percent of beneficiaries enrolled in MA plans and vary dramatically depending on where the beneficiary lives and what plan is offered.
- The vast majority of people in Medicare (80 percent) choose to get their health care through the traditional program and therefore do not receive access to the extra benefits.
- These extra benefits come at a price. They are paid for by excess payments to private insurance companies, which are subsidized by taxpayers and through higher premiums paid by ALL Medicare beneficiaries.
- Audits by the Government Accountability Office found that private insurance plans keep a significant portion of these excess payments for their own profits.

Myth: Medicare Advantage saves Medicare money

Facts:
- MA plans are paid on average 12 percent more than traditional Medicare, according to the Medicare Payment Advisory Commission and the Congressional Budget Office. This means many plans receive even higher excess payments. CMS estimates that current MA payment trends push up the Medicare Trust Fund insolvency date by two whole years.
- While some plans provide value and coordinate care, others can expose consumers to higher out-of-pocket spending.

Myth: Most minorities and low-income beneficiaries are in Medicare Advantage plans.

Facts:
- As with all Medicare beneficiaries, the overwhelming majority of African-American, Hispanic, and low-income beneficiaries choose traditional Medicare. Only 21 percent of the 3.3 million Hispanic beneficiaries and 12 percent of the 4 million African American beneficiaries are enrolled in Medicare Advantage.
- A better, more equitable way to help those with limited incomes is to use MA savings to strengthen programs directly targeted at this population – the Part D Low-Income Subsidy (LIS) and Medicare Savings Programs (MSP) that pay premiums and other cost sharing obligations for people with limited incomes and assets.

Myth: Medicare Advantage is the best alternative to Medigap in rural areas.

Facts:
- Only 7 percent of Medicare beneficiaries living in rural areas were enrolled in MA plans in 2006.
- Private-fee-for-service plans – the most prevalent MA option available in rural communities – can leave some beneficiaries exposed to higher out-of-pocket spending than Medigap plans, especially those with serious or chronic illnesses.
- Strengthening LIS and MSP by raising asset test limits would help more rural beneficiaries than MA currently does.

Myth: Cutting excess payments to Medicare Advantage will hurt the Medicare program

Facts:
- Reducing excess payments to private insurance companies could be used to make critical improvements to Medicare:
+ Holding down increase in Part B premiums, which have doubled since 2000.
+ Preventing a 15 percent physician payment cut over two years that could harm access to physicians.
+ Helping low-income Medicare beneficiaries by streamlining and raising asset limits for the Part D Low-income Subsidy and Medicare Savings Programs.
+ Keeping the Medicare Trust Fund solvent longer.

Search Press Center

MEDIA CONTACTS

If you are an AARP member and not with the press, call 1-888-OUR-AARP or email member@aarp.org.

 

For media inquiries, please contact the AARP Media Relations Office at (202) 434-2560 or media@aarp.org.

 

Facebook: AARP Media Relations

Twitter: @aarpmedia

Discounts & Benefits

From companies that meet the high standards of service and quality set by AARP.

 

Member Benefits AT&T Wireless Cell Phone

Members save 10% on the monthly service charge of qualified AT&T wireless plans.

Member Benefit AARP Regal 2

Members pay $9.50 for Regal ePremiere Tickets purchased online.

Walgreens 1 discount membership aarp

Members earn points on select Walgreens-brand health and wellness products.

Member Benefits

Join or renew today! Members receive exclusive member benefits & affect social change.

Advertisement