Medicare Advantage
Policy Fact Sheet

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Competing Medicare Advantage (MA) plans are offering more choices, more generous benefits, and lower cost-sharing to beneficiaries than Medicare fee-for-service. Seniors who especially value MA are those living in rural areas and those with modest incomes who can’t afford supplementary coverage.

What is Medicare Advantage and how is it different from traditional Medicare?

Medicare beneficiaries have the option of receiving medical coverage either through the traditional fee-for-service program or by joining private Medicare Advantage plans, which generally offer better benefits and lower costs for enrollees.

All Medicare Advantage plans cover the standard benefits offered by traditional Medicare, including hospitalization, outpatient and physician care, diagnostic services, laboratory tests, and other services, often with lower cost-sharing than under traditional Medicare. Many MA plans also provide coverage for services that traditional Medicare doesn’t pay for, such as vision and dental care, added preventive services, and protection against catastrophic medical costs. In addition, most beneficiaries in MA plans receive more comprehensive prescription drug coverage than under the standard Medicare Part D plan.

All beneficiaries, including those living in rural areas, have access to at least one MA plan. So far in 2007, about 8.3 million beneficiaries--19 percent of people eligible for Medicare benefits--are enrolled in private Medicare plans (which include Medicare Advantage and other private plans). Enrollment is up from 12.1 percent in 2004. . . .

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Joseph R. Antos is the Wilson H. Taylor Scholar in Health Care and Retirement Policy at AEI. Thomas P. Miller is a resident fellow at AEI. Robert B. Helms is a resident scholar at AEI. Doug Badger is a senior fellow at the Center for Medicine in the Public Interest. Robert Goldberg is the vice president of the Center for Medicine in the Public Interest. Peter J. Pitts is the president of the Center for Medicine in the Public Interest. Grace-Marie Turner is the president of the Galen Institute. Edmund F. Haislmaier is a research fellow at the Heritage Foundation. Robert E. Moffit is director of the Center for Health Policy Studies at the Heritage Foundation. Nina Owcharenko is a senior policy analyst at the Heritage Foundation. Tom Giovanetti is the president of the Institute for Policy Innovation. Merrill Matthews is a resident scholar at the Institute for Policy Innovation. Stephen J. Entin is president of the Institute for Research on the Economics of Taxation. John C. Goodman is the president of the National Center for Policy Analysis. Sally Pipes is the president of the Pacific Research Institute. Gail Wilensky is a senior fellow at Project HOPE. The authors are members of the Health Policy Consensus Group.

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