What keeps Medicare going? Is Medicare as efficient as we think? Beneficiary out of pocket costs.
- Medicare policies are helping to shift more beneficiaries to Medicare Advantage Plans – and costing taxpayers money. This means more people enrolling in private insurance plans. Go figure‼️
- The pre- Medicare population pays more for health insurance because of low Medicare fee schedules.
- Medicare beneficiary premium and out of pocket costs will continue to increase.
Despite the aging population, Medicare’s spending growth per person was lower from 2010 to 2020 than growth in private health insurance. This reflects Medicare’s lower payment rates 🔺🔺 for all services except prescription drugs.
Hospital inpatient services as a share of spending have shrunk from 47% in 2010 to 40% in 2021. KFF (Kaiser Family Foundation) projects this trend to continue. KFF also shows the growth in Medicare Advantage spending, from 26% of Medicare spending in 2011 to 46% in 2021, and a projected 54% in 2030.
This number includes overpayments to Medicare Advantage plans: “In 2022, payments to Medicare Advantage plans are estimated to be 104% of what traditional Medicare would have spent on the same beneficiary, on average. This is lower than in 2010 when Congress changed how Medicare Advantage plans are paid—but this amount has been trending higher since 2017.” The KFF data also show increases in the amount people with Medicare are paying out-of-pocket for their benefits.
In 2002, premiums and deductibles took up 15% of the average Social Security benefit. In 2022, that number is 19%, and it is expected to rise. Health care and coverage are vital to ensure the well-being and financial security of the entire population. At Medicare Rights, we value these data insights that show the stakes for the millions of people who rely on Medicare for their care.
🔺🔺 Key Findings