Costs Under Private Medicare Advantage Plans Costs Are Higher Than Traditional Medicare 

Private Medicare Advantage plans can cost beneficiaries more than traditional Medicare for home health care, nursing homes and certain hospital stays, according to a report released by the Government Accountability Office. The report found that because the experiences of certain beneficiaries do not align with the average, some pay significantly more out of pocket than they would in traditional Medicare. The report found that about 48% of MA beneficiaries were in plans with an out-of-pocket maximum, ranging from $2,750 to $4,600. Insurers believe that annual limits protect Medicare beneficiaries from high costs, but some MA plans exclude certain treatments and medical expenses from the annual out-of-pocket maximums, according to the GAO. According to the report of the MA plans with out-of-pocket limits, 29% exclude the cost of certain cancer drugs, 23% exclude some mental health services and 21% exclude home health care expenses. The report found, "Beneficiaries who use these services may pay more in total cost-sharing than is indicated by the plan's out-of-pocket maximum." The report also found that the federal government spends more per beneficiary in Medicare Advantage than it does for beneficiaries in the original Medicare fee-for-service program, at an estimated additional cost to Medicare of $54 billion from 2009 to 2012. To view the GAO report go to: http://www.gao.gov/new.items/d08522t.pdf