What Do Medicare Advantage Costs Say About the Viability of 'Premium Support'?

eAlert 3fd45d8e-4739-4b12-8277-fcfc0c1fec7d

Concerned over increasing Medicare costs, some in Congress have proposed converting the popular health insurance program into a "premium support" system, under which beneficiaries would receive a set amount to purchase health coverage on their own, by choosing either a private Medicare Advantage plan or traditional fee-for-service Medicare. But a new Commonwealth Fund–supported study in <em>Health Affairs </em>shows that beneficiaries in many parts of the U.S. would likely be spending more under this approach.<br /><br />
In comparing spending for beneficiaries enrolled in traditional fee-for-service Medicare with spending for those in private Medicare Advantage plans, researchers Brian Biles, Giselle Casillas, and Stuart Guterman found that costs for Medicare Advantage are higher in about half of U.S. counties, with costs varying by geographic area and by type of plan.<br />
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A premium support system, they say, would raise costs for Medicare Advantage plan enrollees in rural areas, where average private plan costs exceed those of traditional Medicare, and raise costs for beneficiaries with traditional Medicare in urban areas, where costs for that coverage are relatively high.

http://www.commonwealthfund.org/publications/newsletters/ealerts/2015/jan/medicare-advantage-cost-and-premium-support Read the article