Does Medicare Advantage Cost Less Than Traditional Medicare?

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Those in favor of expanding the role of private plans in Medicare argue that commercial insurers are more efficient than traditional Medicare and can therefore save taxpayers money. According to a new Commonwealth Fund analysis, however, those plans that have comparatively lower costs are concentrated in a small number of U.S. counties.<br /><br />
Authors Brian Biles, Giselle Casillas, and Stuart Guterman determined that in the 25 counties where the cost difference is greatest, private insurers spent a total of $5.2 billion less than what traditional Medicare would have been expected to spend. Outside those counties, though, private plans spent $4.8 billion <em>above</em> traditional Medicare’s projected costs.<br />
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The type of plan as well as local market conditions, the authors find, weigh heavily in determining the relative efficiency of Medicare Advantage versus the traditional program. Read the brief