Medicare Spent an Average of 27% More on People Who Switched from Medicare Advantage to Traditional Medicare Compared to Those Who Were Only in Traditional Medicare

A brand new KFF evaluation finds greater Medicare spending amongst individuals who switched from Medicare Benefit to conventional Medicare than for related beneficiaries who have been in conventional Medicare all alongside.

Medicare spent a median of 27% extra on such beneficiaries, based on the evaluation, which examined well being prices in conventional Medicare for each teams within the yr following the change, after adjusting for variations in well being standing and different traits. This quantities to a distinction of $2,585 in Medicare spending per individual, on common, between the 2 teams in 2022. The distinction in spending amongst individuals with sure well being circumstances diversified from 15% for these with pneumonia to 34% for individuals with diabetes.  

The upper Medicare spending amongst beneficiaries who disenrolled from Medicare Benefit in comparison with related beneficiaries in conventional Medicare was because of expert nursing facility spending (34%), adopted by outpatient hospital spending (23%), and inpatient hospital spending (20%), with some variation by persistent circumstances and different beneficiary traits. 

In 2024, greater than half of all eligible Medicare beneficiaries have been enrolled in a Medicare Benefit plan. Different analysis has discovered that individuals who use comparatively extra well being care providers are much less seemingly to enroll in one of many non-public plans and extra seemingly to decide on conventional Medicare.  

The upper Medicare spending amongst individuals who disenrolled from Medicare Benefit for conventional Medicare raises a number of questions, together with whether or not such switchers have been unable to get the medical care they felt they wanted whereas enrolled in a Medicare Benefit plan; whether or not extra Medicare Benefit enrollees would make the change if individuals with pre-existing circumstances didn’t face boundaries to buying Medicare supplemental insurance coverage (Medigap); and whether or not the disenrollments scale back prices and improve income for Medicare Benefit insurers, and improve Medicare spending. 

The evaluation additionally drills down to look at variations in Medicare spending between switchers and people who have been constantly lined by conventional Medicare by well being situation, age, race and ethnicity, and twin eligible standing.

For the complete evaluation and different knowledge and analyses about Medicare Benefit, go to kff.org.