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1 MEDICARE ADVANTAGE 2010 DATA SPOTLIGHT Benefits and Cst-Sharing Prepared by Marsha Gld and Maria Hudsn i ; and Gretchen Jacbsn and Tricia Neuman ii FEBRUARY 2010 Mre than ten millin peple ne in fur peple n Medicare are enrlled in a Medicare Advantage plan. Medicare Advantage plans, including health maintenance rganizatins (HMOs), Preferred Prvider Organizatins (PPOs) and Private Fee-fr-Service (PFFS) plans, receive payments frm the gvernment t prvide all benefits cvered under Medicare, but have the flexibility t mdify the benefit design as lng as the cre benefit package is actuarially equivalent t traditinal Medicare. Medicare Advantage plans are required t use any extra payments (i.e., rebates) t prvide extra benefits t enrllees in the frm f lwer premiums, reduced cst-sharing, r extra benefits. 1,2 The Cngressinal Budget Office estimates the average value f extra benefits fr Medicare Advantage enrllees was $87 per mnth in 2009, given the current payment system which paid plans 114 percent f Medicare fee-fr-service (FFS) csts, n average, in This data sptlight examines benefits and cst-sharing amng Medicare Advantage plans that are available fr general enrllment in The analysis uses publicly available data that supprts Medicare Optins Cmpare, a website develped by the Centers fr Medicare and Medicaid Services (CMS). 5 This analysis includes 2,864 Medicare Advantage plans in 2010, 79 percent f which are Medicare Advantage Prescriptin Drug (MA-PD) plans. Data are unweighted and thus shw the chices beneficiaries have available, but nt their enrllment decisins; enrllment data fr 2010 are unavailable at this time. Estimates f ut-f-pcket spending fr selected services take int accunt limits n ut-fpcket spending, when applicable, but d nt take int accunt csts assciated with ut-f netwrk care, because the dwnladable CMS file des nt distinguish well between cst-sharing fr in and ut-f-netwrk, an analytical limitatin fr assessing cst-sharing in PPOs. This data sptlight is part f a series f sptlights n Medicare Advantage plans ffered in Cst-sharing fr Medicare-Cvered Benefits Cst-sharing fr Medicare-cvered services varies widely acrss plans, but generally differs frm the benefit structure in traditinal Medicare. Fr example, Medicare Advantage plans typically use fixed dllar cpayments fr Medicarecvered services, rather than a cinsurance, and many plans have a limit n enrllees ut-f-pcket spending, unlike traditinal Medicare. Out-f-pcket spending limits. In 2010, mst (79 percent) Medicare Advantage plans have a limit n ut-f-pcket spending fr Part A and Part B services, whereas traditinal Medicare des nt. Reginal PPOs are required t have a limit n ut-fpcket spending, althugh the level f that limit is nt prescribed. 6 Fr 2010, CMS encuraged all plans t limit enrllees ut-f-pcket spending fr Medicare-cvered services t $3,400 during the calendar year. 7 Nearly half (47 percent) f all Medicare Advantage plans have a limit n ut-f-pcket spending f $3,400 r less in 2010, nearly ne third (32 percent) have a limit that exceeds the $3,400 threshld, and 21 percent have n limit. (Exhibit 1) Exhibit 1 Share f Medicare Advantage Plans With Limits n Out-f-Pcket Spending, by Plan Type, 2010 Mst (61 percent) reginal PPOs have a limit that exceeds $5,000. Relatively high ut-f-pcket limits are less cmmn amng ther plan types with limits (4 percent f HMOs, 10 percent f PFFS plans and 21 percent f lcal PPO plans). Out-f-pcket limits are less cmmn amng HMOs (66 percent) than amng ther plan types; hwever, HMOs tend t use lwer limits than mst ther plan types when they use them. The share f all Medicare Advantage plans with any limit n ut-f-pcket spending has increased frm 66 percent in 2008 t 79 percent in Hwever, amng plans with limits, the share with limits f $5,000 r mre increased frm 2 percent t 10 percent; amng reginal PPOs, the share increased frm 28 percent in 2008 t 61 percent in 2010 (data nt shwn). 10% 39% 34% 4% 11% 4 35% 29% 9% 10% 1 3% 3% 10% 41% 43% 61% 24% 14% All Plans HMOs Lcal PPO PFFS Reginal PPO N Limit $5001 r Mre $ $5000 $ $3400 $2500 r less NOTE: Excludes Special Needs Plans (SNPs), grup plans, cst plans, demnstratins, Health Care Prepayment Plans, PACE plans and MSAs. Percentages are unweighted by enrllment. Ttals may nt add t 100% due t runding. Authr affiliatins: i Mathematica Plicy Research, Inc. ii Kaiser Family Fundatin The Henry J. Kaiser Family Fundatin Headquarters: 2400 Sand Hill Rad, Menl Park, CA (650) Fax: (650) Washingtn Offices and Barbara Jrdan Cnference Center: 1330 G Street, NW, Washingtn, DC (202) Fax: (202) Website: The Kaiser Family Fundatin is a nn-prfit private perating fundatin, based in Menl Park, Califrnia, dedicated t prducing and cmmunicating the best pssible analysis and infrmatin n health issues.

2 In the past, at least sme f the plans with limits n ut-f-pcket spending have excluded selected Medicarecvered benefits frm the limit. Fr 2010, CMS encuraged firms t include all cst-sharing fr Medicare-cvered benefits in calculating their limits. In 2010, 14 percent f plans with limits appear t exclude sme Medicare cvered benefits frm the limit. Twelve percent f the plans with ut-f-pcket limits d nt cunt cst-sharing fr physician ffice visits tward the limit; 10 percent d nt cunt cst-sharing fr mental health services. Cst-Sharing fr Inpatient Hspital Stays. Cst-sharing fr inpatient hspital care under Medicare Advantage plans typically differs frm the requirements f traditinal Medicare, but varies widely acrss plans. Medicare Advantage plans typically apply fixed dllar cpayments fr inpatient hspital care, in cntrast t traditinal Medicare, which has an inpatient deductible ($1,100 in 2010 per spell f illness spell) and n cinsurance fr inpatient hspital stays f up t 60 days. Mst Medicare Advantage plans (93 percent) prvide unlimited days f hspital care, in cntrast t traditinal Medicare, which has annual limits and life-time reserve days. 8 Virtually all Medicare Advantage plans (94 percent) require enrllees t share in the csts f inpatient care: 81 percent impse cpayments, 2 percent impse cinsurance, and 11 percent use bth (primarily PPOs t distinguish between in-netwrk and ut-fnetwrk care). 9 Six percent f all Medicare Advantage plans have n cst-sharing requirements. Amng Medicare Advantage plans charging cpayments fr inpatient care, 79 percent charge a cpayment per day, 16 percent charge a cpayment per stay, and 5 percent charge bth cpayments per day and stay in (Exhibit 2) Fr a given beneficiary, ut-f-pcket expenses fr inpatient hspital care wuld vary acrss plans, based n benefit design (e.g., level f cpayments and limits n ut-f-pcket spending), length f stay, and, fr sme plans, the number f separate admissins. Abut ne in five Medicare beneficiaries residing in cmmunity-based settings have at least ne hspital stay a year. 10 Fr a 5-day inpatient hspital stay, 11 average csts fr Medicare Advantage enrllees wuld be $880 in daily cpayments in Acrss all plans, the cst ranges frm $0 t $3,325. (Exhibit 3) The average cst fr a 5-day hspital stay amng reginal PPOs is, while the average cst fr a 5-day stay in HMOs is abut $702. (Exhibit 4) Even amng plans f the same type, there is cnsiderable variatin in cstsharing requirements. Fr example, amng HMOs, mean cst-sharing is $702, but csts range frm $0 t $1, % 11% 6% 90% 9% 49% 5% 44% 3% Exhibit 2 Share f Medicare Advantage Plans With Inpatient Cst-Sharing, by Plan Type, % 7% 58% 4 All Plans HMO Lcal PPO PFFS Reginal PPO Cpayments nly Cinsurance nly Cinsurance and cpayments N cst-sharing NOTE: Excludes Special Needs Plans (SNPs), grup plans, cst plans, demnstratins, Health Care Prepayment Plans, PACE plans and MSAs. Percentages are unweighted by enrllment. Ttals may nt add t 100% due t runding. $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $3,325 $1,125 $900 $1,700 $1,000 $750 $3,325 Exhibit 3 Out-f-Pcket Spending fr Medicare Advantage Enrllees with a 5-Day Inpatient Hspital Stay, 2010 $1,625 $975 $2,250 $1,250 $1,125 $3,325 $2,325 $988 $975 $1,125 $500 $500 $500 $375 $150 $0 All Plans HMO Lcal PPO PFFS Reginal PPO Mean: $880 $702 $1,107 $1,109 NOTE: Excludes Special Needs Plans (SNPs), grup plans, cst plans, demnstratins, Health Care Prepayment Plans, PACE plans and MSAs. Data is unweighted by enrllment. Analysis excludes 2 percent f plans with cinsurance nly requirements and excludes the cinsurance fr the 11 percent f plans with bth cpayments and cinsurance. $440 $320 $328 $265 $219 $1,107 $1,109 $880 $702 Exhibit 4 $2,588 $675 Legend Max value Min value $1,656 $1,535 Lcal PPO PFFS $1,370 $1,438 $1,237 All plans $1,164 HMO $935 $975 1 day 5 days 10 days 20 days Number f Cnsecutive Days Spent in the Hspital 75 th percentile Median 25 th percentile Average Out-f-Pcket Spending fr Inpatient Hspital Care Fr Medicare Advantage Enrllees, by Length f Stay and Plan Type, 2010 Reginal PPO $3,194 NOTE: Averages ut-f-pcket spending includes plans withut any cst-sharing requirements; excludes 2 percent f plans with cinsurance nly requirements and excludes the cinsurance fr the 11 percent f plans with bth cpayments and cinsurance. Excludes Special Needs Plans (SNPs), grup plans, cst plans, demnstratins, Health Care Prepayment Plans, PACE plans and MSAs. Data is unweighted by enrllment. 2

3 If we exclude plans that d nt charge daily cpayments fr inpatient stays, the average cst fr a 5- day stay is $944 (versus $880 when all plans are included). (See Exhibit 8) Between 2008 and 2010, average cst-sharing amng all Medicare Advantage plans fr inpatient hspital services fr a 5-day stay increased by 36 percent, frm $649 in 2008 t $880 in 2010 (data nt shwn). Fr a 10-day hspital stay, average cst-sharing amng Medicare Advantage plans is $1,164, six percent higher than beneficiaries wuld pay in traditinal Medicare, ranging frm zer t $6,600. Csts d nt necessarily rise prprtinate t length f stay because plans usually limit the number f days that cpayments apply, and in sme instances, limits n ut-f-pcket spending set a ceiling n beneficiary cst-sharing. By plan type, average csts based n cpayments range frm $935 (HMOs) t $2,588 (reginal PPOs). Cst-sharing varies widely amng plans f the same type. Fr example, amng reginal PPOs, the average cst fr a 10-day inpatient hspital stay is $2,558, but ranges frm $675 t $6,600. Fr a 10-day stay, average cst-sharing amng plans increased by 44 percent, frm $811 in 2008 t $1,164 in 2010 (data nt shwn). Cst-sharing fr Skilled Nursing Facility Stays. Traditinal Medicare s skilled nursing facility (SNF) benefit has n cst-sharing requirements fr the first 20 days, but impses a daily cpayment fr days 21 t 100 ($ per day in 2010). In cntrast, the majrity f Medicare Advantage plans begin cst-sharing fr SNF benefits frm the first day f a stay. As a precnditin t cverage f a SNF stay, Medicare requires beneficiaries t have a qualifying hspital stay. All but 8 percent f Medicare Advantage plans waive this requirement, althugh plans may use ther utilizatin management tls, such as requiring prir authrizatin, instead. In traditinal Medicare, the average length f stay fr beneficiaries using the Medicare-cvered SNF is 27 days. 12 Tw-thirds (66 percent) f all Medicare Advantage plans require cst-sharing fr at least part f the first 20-days f a SNF stay. Half impse cpayments, 5 percent impse cinsurance and 11 percent impse bth. Over a quarter (28 percent) f Medicare Advantage plans have n cst sharing fr the first 20 days in a SNF, and 6 percent have n cst-sharing at all. (Exhibit 5) Virtually all reginal PPOs (95 percent) require cst-sharing n the frnt end f a stay, as cmpared t 64 percent f HMOs and 52 percent f PFFS plans. Average cst-sharing fr a Medicare Advantage enrllee with a 27-day stay in a SNF is $1,349 acrss all plans in Amng the subset f plans that charge cpayments fr SNF stays, average cumulative cst-sharing fr a 27-day stay is $1,512 in Average cst-sharing fr a 27-day SNF stay ranges frm $1,078 amng all HMO plans t $3,921 amng all reginal PPOs. Cst-sharing varies amng plans f the same type fr a 27-day stay in a SNF; fr example, amng HMOs, the average cst f a 27-day stay range frm $0 t $9180. Fr enrllees f reginal PPOs, average csts range frm $675 t $13,260. (Exhibit 6) Since 2008, average csts fr 27 days in a SNF in all Medicare Advantage plans have increased by 18 percent. 50% 5% 11% 45% 28% 6% 6 26% 10% 15% 17% Exhibit 5 Share f Medicare Advantage Plans with Cst-Sharing fr Skilled Nursing Facility Stays in First 20 Days, by Plan Type, % 46% 1% 1% 1 19% 64% All Plans HMO Lcal PPO PFFS Reginal PPO 5% Cpayments nly Cinsurance nly Cinsurance and cpayments N cst-sharing in first 20 days N cst-sharing fr entire SNF stay NOTE: Excludes Special Needs Plans (SNPs), grup plans, cst plans, demnstratins, Health Care Prepayment Plans, PACE plans and MSAs. Percentages are unweighted by enrllment. Ttals may nt add t 100% due t runding. $13,260 $9,180 $8,490 Exhibit 6 Out-f-Pcket Spending fr Medicare Advantage Enrllees with a 27-Day Stay in a Skilled Nursing Facility, 2010 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,450 $4,950 $13,260 $5,150 $2,000 $1,625 $1,560 $1,560 $1,250 $1,050 $875 $1,000 $675 $625 $500 $0 All Plans HMO Lcal PPO PFFS Reginal PPO Mean: $1,349 $1,078 $1,897 $1,365 $3,921 $2,925 Legend Max value Min value 75 th percentile NOTE: Excludes Special Needs Plans (SNPs), grup plans, cst plans, demnstratins, Health Care Prepayment Plans, PACE plans and MSAs. Data is unweighted by enrllment. Beneficiaries with at least ne SNF stay, stay fr an average f 27 days. Median 25 th percentile 3

4 Cst-sharing fr Cmbined Inpatient and Pst-Acute Skilled Nursing Facility Care. Medicare beneficiaries receiving inpatient care smetimes require care in a SNF after they are discharged frm the hspital. Sme will pay less under a Medicare Advantage plan than they wuld under traditinal Medicare, but thers culd pay mre. Fr example, a Medicare beneficiary enrlled in a Medicare Advantage plan wuld pay $2,113, n average fr a 7-day inpatient hspital stay fllwed by 22 days in a SNF, the average length f stay fr beneficiaries with an inpatient stay fllwed by a SNF stay. 13 Average csts fr an enrllee with this utilizatin prfile wuld range frm $1,741 (HMOs) t $3,823 (reginal PPOs). Since 2008, average ut-f-pcket csts fr a Medicare enrllee with this set f services have increased by 41 percent, ranging frm 1 amng HMOs t 135% amng reginal PPOs. (Exhibit 7) Cst-sharing fr Hme Health Visits. Mst Medicare Advantage plans (88 percent) d nt impse cst-sharing fr hme health visits, like traditinal Medicare. Medicare beneficiaries wh use the hme health benefit have an average f 37 hme health visits per year. 14 Nearly ne third f all PFFS plans (30 percent) require a cpayment fr hme health visits in 2010, cmpared t 10 percent f HMOs, 6 percent f lcal PPOs, and n reginal PPOs. Medicare Advantage plans charge $0.78 per hme health visit n average a very lw amunt because the average includes the majrity f plans that have n cpayment requirement fr hme health visits. When we restrict the analysis t plans that d impse cst-sharing fr hme health services, average cpayments fr hme health services are $16.64 per visit, ranging frm $15.21 per visit amng PFFS plans t $18.24 per visit amng lcal PPOs. Exhibit 7 Cst-Sharing fr Beneficiaries with an Inpatient Hspital Stay Fllwed by a Stay in a Skilled Nursing Facility NOTE: Cst-sharing amunts are fr 7.02 days in an inpatient hspital fllwed by days in a skilled nursing facility (SNF), the average length f stay fr beneficiaries with an inpatient hspital stay fllwed by a SNF stay. Excludes Special Needs Plans (SNPs), grup plans, cst plans, demnstratins, Health Care Prepayment Plans, PACE plans and MSAs. Data is unweighted by enrllment. Fr the average hme health user with 37 hme health visits in a plan that charges a cpayment, average cstsharing wuld be $616 fr their hme health care. (Exhibit 8) Since 2008, the share f all plans charging any cst-sharing fr hme health visits has decreased (frm 35 percent in 2008 t 12 percent in 2010) while the average cpayment per visit amng plans charging cpayments has remained relatively stable ($16.74 in 2008 t $16.64 in 2010). Cst-Sharing fr Primary Care and Specialty Care Office Visits. As with ther types f services, Medicare Advantage plans favr fixed dllar cpayments ver cinsurance fr ffice visits. Fr a primary care visit, 66 percent f plans charge cpayments nly, 3 percent charge cinsurance nly, 11 percent charge bth, and 20 percent charge nthing. The distributin is similar fr specialist visits except that a much smaller percentage (6 percent) f plans charge nthing (81 percent charge cpayments nly, 2 percent charge cinsurance nly, and 11 percent charge bth). Traditinal Medicare charges beneficiaries 20 percent cinsurance fr each ffice visit and mst ther Part B services. Thirteen percent f Medicare Advantage plans charge cinsurance f 20 percent r mre fr primary care and specialty visits. In 2010, 20 percent f Medicare Advantage plans have n cst-sharing fr primary care visits, and 5 percent f plans have n cst-sharing fr specialty care visits. Average cpayments fr primary care ffice visits in Medicare Advantage plans are $10.82, ranging frm $5.56 per visit fr HMOs t $16.26 per visit in PFFS plans. Year Percent increase frm 2008 t 2010 All $1,494 $1,462 $2,113 41% HMO $1,552 $1,440 $1,741 1 Lcal PPO $1,156 $1,251 $2, % PFFS $1,572 $2,481 58% Reginal PPO $1,624 $1,521 $3, % Exhibit 8 Average ut-f-pcket spending amng Medicare Advantage enrllees enrlled in plans with and withut cst-sharing requirements, fr selected services, 2010 All plans (including plans with n cst-sharing) Only plans with cpayments Inpatient hspital stay (5 days) $880 $944 SNF stay (27 days) $1,349 $1,512 Hme health (37 visits) $28.86 $ NOTE: Excludes plans with cinsurance nly. Excludes Special Needs Plans (SNPs), grup plans, cst plans, demnstratins, Health Care Prepayment Plans, PACE plans and MSAs. Data is unweighted by enrllment. 4

5 Average cpayments fr specialty ffice visits are $26.12 fr 2010, and range frm $21.29 per visit fr HMOs t $34.41 per visit fr PFFS plans. Since 2008, average cpayments have remained relatively stable fr primary care (frm $10.79 in 2008 t $10.82 in 2010) and increased fr specialty ffice visits (frm $22.72 in 2008 t $26.12 in 2010). Cst-Sharing fr Preventive Services. Medicare has cvered mre preventive services ver the years, and traditinal Medicare generally requires a 20 percent cinsurance fr these services. In 2010, Medicare Advantage plans typically require n cst-sharing fr Medicare-cvered preventive services, such as mammgrams and prstate exams. Medicare Advantage plans als typically cver annual physical exams. Mre than 90 percent f plans have n cstsharing requirements fr preventive benefits (excluding annual physical exams). (Exhibit 9) Exhibit 9 Share f Medicare Advantage Plans Charging N Cst-Sharing fr Preventive Benefits, 2010 Virtually all Medicare Advantage plans say they prvide expanded cverage fr physical exams beynd the initial Welcme t Medicare physical exam. Only 22 percent f all Medicare Advantage plans require cst-sharing fr such services, with higher rates amng lcal and reginal PPOs (64 percent and 61 percent respectively). Prstate Screening Pap smears Mammgrams Clrectal screening 97% % The share f all plans requiring n cst-sharing fr preventive benefits has been relatively cnstant ver time. 15 Part D Benefits and Premiums Welcme t Medicare exam 36% NOTE: Excludes Special Needs Plans (SNPs), grup plans, cst plans, demnstratins, Health Care Prepayment Plans, PACE plans and MSAs. Percentages are unweighted by enrllment. Mst Medicare Advantage plans (79 percent) ffer Part D benefits, including 79 percent f HMOs, 86 percent f lcal PPOs, 70 percent f PFFS plans, and 68 percent f reginal PPOs. Eleven percent f all MA-PDs impse a deductible fr their Part D benefit. Reginal PPOs (40 percent) are far mre likely t have a deductible than HMOs (11 percent) r PFFS plans (10 percent; data nt shwn). Abut half f all MA-PDs (49 percent) prvide sme cverage in the Part D cverage gap, primarily generics with sme brand-name drugs. (Exhibit 10) PFFS plans (61 percent) and lcal PPOs (51 percent) are mre likely than HMOs (45 percent) and reginal PPOs (40 percent) t prvide sme cverage in the gap. Almst half f PFFS plans (47 percent) cver sme brand-name and generic drugs in the cverage gap. In cntrast, nly 11 percent f HMOs cver sme brand-name drugs in the gap. Exhibit 10 Share f Medicare Advantage Prescriptin Drug Plans with Gap Cverage, by Plan Type, % 51% 11% 34% 55% 27% 24% 49% 47% 14% 39% 25% 15% 60% All Plans HMO Lcal PPO PFFS Reginal PPO A few brands and generics Generics nly N gap cverage NOTE: Excludes Special Needs Plans (SNPs), grup plans, cst plans, demnstratins, Health Care Prepayment Plans, PACE plans and MSAs. Percentages are unweighted by enrllment. Ttals may nt add t 100% due t runding. All plans that cver brand name drugs in the cverage gap als cver generic drugs in the gap. Part D premiums average $18 per mnth acrss MA-PDs. Part D premiums are lwer in HMOs ($14 per mnth) than in reginal PPOs ($21 per mnth), PFFS plans ($24 per mnth), r lcal PPOs ($26 per mnth). This is cnsistent with previus research shwing that HMOs are substantially less likely than ther plan types t charge a premium in

6 Extra Benefits In the cntext f the current payment system, many plans ffer extra benefits t attract beneficiaries. Medicare Optins Cmpare gives sme general infrmatin, but ffers very little detail, n these extra benefits that are ften subject t a dllar r ther limit. (Exhibit 11) Preventive Dental. Over half (55 percent) f all Medicare Advantage plans cver sme frm f preventive dental care. Such benefits typically include a specified number f exams, cleanings r x- rays per year. Virtually all lcal and reginal PPOs prvide such cverage (99 percent and 100 percent, respectively). Nne f the plans prvide restrative benefits such as fillings, crwns, r dentures. Visin. All plans prvide sme visin benefit, particularly glasses and cntacts. Almst all (86 percent) cver exams (typically ne per year) and all plans cver eyeglasses generally subject t a dllar limit ($85 per year, n average) and specified number f pairs. Hearing. Nearly tw thirds (65 percent) f Medicare Advantage plans cver hearing tests; mst (89 percent) limit the number f tests allwed and a few (7 percent) have a dllar limit. Exhibit 11 Share f Medicare Advantage Plans with Selected Extra Benefits, 2010 Visin exams Hearing tests Wrldwide cverage Preventive dental Extra pdiatry benefits Extra chirpractic benefits Sme transprtatin Part B premium rebate Hearing Aids. Thirty-seven percent f plans cver hearing aids, generally subject t a limit. The average value f the hearing test benefit ffered by plans is $299 in Fifty-ne percent f HMOs, 27 percent f lcal PPOs, 15 percent f reginal PPOs, and 7 percent f PFFS plans prvide a hearing aid benefit. In a July 2009 study, Cnsumer Reprts fund that hearing aid prices in New Yrk City varied frm $1,800 t $6,800 per pair, including fitting and fllw-up services far less than the amunt cvered by plans. 17 Other supplemental benefits. Frty-seven percent cver mre expansive pdiatry than Medicare, 34 percent cver mre expansive chirpractic services than Medicare, and 62 percent prvide a wrld-wide travel benefit nt prvided by traditinal Medicare. Furteen percent prvide transprtatin beynd ambulance services, and almst always nly t apprved lcatins. Part B rebates. Six percent f Medicare Advantage plans applied funds t reduce enrllees mnthly Part B premium, with slightly higher rates amng HMOs (9 percent) and lwer rates amng PFFS plans (1 percent). Part B premium reductins have always been relatively rare; in 2006, just 5 percent f Medicare Advantage plans reduced Part B premiums fr enrllees. 18 While Medicare Advantage plans ften prvide sme level f extra benefits, it is nt always easy t assess the genersity f these benefits, based n the infrmatin prvided n Medicare Cmpare. Fr example, 62 percent f Medicare Advantage plans indicate that they prvide sme frm f wrldwide benefit but mst describe it in general terms; abut half with such cverage state a dllar limit (usually $10,000 r higher). Similarly, while all plans state they prvide sme frm f health and wellness cverage, the frm f cverage, and extent f that cverage, is nt always clear. Virtually all plans cver smking cessatin in sme frm. Mre than half (57 percent) say they ffer sme frm f cverage fr a gym r health club membership, and 31 percent prvide newsletters r ther frms f written infrmatin. Beneficiaries culd mre easily cmpare the relative value f ne plan ver anther if benefits were described with unifrm language, r if benefits were mre standardized acrss plans. Cnclusins The share f beneficiaries enrlling in Medicare Advantage plans has been n the rise in recent years, in part because plans ffer lw premiums, extra benefits, and recnfigured cst-sharing with fixed dllar cpayments that are attractive t beneficiaries. Mst Medicare Advantage plans als prvide free preventive services, and limit beneficiaries ut-f-pcket expenses. Hwever, ut-f-pcket csts fr a given individual are nt necessarily lwer in Medicare Advantage plans than traditinal Medicare acrss all plans r fr all beneficiaries. Because Medicare Advantage plans can recnfigure the design f Medicare cst-sharing, sme beneficiaries, particularly thse with significant medical prblems culd face higher ut-f-pcket csts in sme Medicare Advantage plans than in traditinal Medicare. Als, while limits n ut-f-pcket spending have the ptential t prvide significant prtectin t enrllees, nly abut half f Medicare Advantage plans have a limit at r belw the level suggested by CMS. 6% 14% 34% 47% 55% 65% 6 86% NOTE: Excludes Special Needs Plans (SNPs), grup plans, cst plans, demnstratins, Health Care Prepayment Plans, PACE plans and MSAs. Percentages are unweighted by enrllment. 6

7 Our analysis shws wide variatin in cst-sharing and benefits acrss plans, underscring the imprtance fr beneficiaries t lk carefully at premiums, benefits and cst-sharing requirements (and prvider netwrks), in additin t premiums, when chsing between traditinal Medicare and Medicare Advantage plans, r amng varius Medicare Advantage plans ffered in their area. Lack f transparency abut benefits and restrictins, in general, make it difficult fr beneficiaries t understand what is and is nt cvered by their plan. Greater transparency wuld help beneficiaries understand key differences acrss plans and critical tradeffs, rather than just the mst visible elements f the plan: mnthly premiums. Trends since 2008 present a mixed picture. On the ne hand, the share f plans with limits n ut-f-pcket spending has increased, while cst-sharing fr primary care and specialist ffice visits has remained virtually unchanged. On the ther hand, average cst-sharing fr certain services (inpatient hspital stays and skilled nursing facility stays) has increased since 2008 (36 percent and 18 percent, respectively), appearing t shift greater csts t the subset f beneficiaries with the greatest medical needs. Against this backdrp, and after a perid f expansin, Medicare Advantage benefits may be in transitin if Cngress reduces the well-dcumented verpayments t plans. Other changes under discussin culd expand prescriptin drug cverage in the s-called dughnut hle, and enhance benefits (e.g., by prhibiting plans frm charging mre than traditinal Medicare fr certain services). These refrms wuld likely limit the discretin firms have in shaping benefits, but culd als make it easier fr beneficiaries t chse between Medicare Advantage and traditinal Medicare, and chse amng Medicare Advantage plans. 1 Fr infrmatin n Medicare Advantage premiums, see Kaiser Family Fundatin, Medicare Advantage 2010 Data Sptlight: Plan Availability and Premiums, Nvember Rebates are defined under current law as 75 percent f the difference between the amunt a plan expects it will cst t prvide the Medicare benefit and the cunty-based (r reginal in the case f reginal PPOs) benchmark amunts that are set by a frmula established in statute. 3 Cngressinal Budget Office, Cmparisn f prjected enrllment in Medicare Advantage plans and subsidies fr extra benefits nt cvered by Medicare under current law and under the Patient Prtectin and Affrdable Care Act, Nvember 21, 2009; and Medicare Payment Advisry Cmmittee, Reprt t Cngress: Medicare Payment Plicy, March The analysis excludes grup and special needs plans (SNPs) because they are nt available fr general enrllment. It als excludes separately authrized plans, including 1876 cst plans, Health Care Prepayment Plans, Prgram fr All Inclusive Care fr the Elderly (PACE) plans, and demnstratins. The analysis excludes Medicare medical savings accunts (MSAs) because f their unique benefit design and extremely lw enrllment. 5 Fr infrmatin n what Medicare Optins Cmpare includes, see Marsha Gld, An Illustrative Analysis f Medicare Optins Cmpare: What s There and What s Nt? AARP Public Plicy Institute, Insight n the Issues, April Medical savings accunt (MSA) plans are als required t have an ut-f-pcket limit. 7 Centers fr Medicare and Medicaid Services, 2010 Call Letter, March 30, Medicare beneficiaries are entitled t cverage f 90 hspital days during any spell f illness. If beneficiaries need mre than 90 days, they are entitled t an additinal 60 nn-renewable days f care, called lifetime reserve days. 9 Figures d nt sum t 100 percent due t runding. 10 Medicare Payment Advisry Cmmittee, A Data Bk: Healthcare Spending and the Medicare Prgram, June Beneficiaries with an inpatient hspital stay stayed fr an average f 5 days. See Medicare Payment Advisry Cmmittee, A Data Bk: Healthcare Spending and the Medicare Prgram, June Medicare Payment Advisry Cmmittee, A Data Bk: Healthcare Spending and the Medicare Prgram, June Beneficiaries with an inpatient hspital stay fllwed by a SNF stay within 30 days spent 7.02 days in the hspital and days in a SNF, n average, based n Kaiser Family Fundatin analysis f the Medicare Current Beneficiary Survey, Cst and Use Files, Medicare Payment Advisry Cmmittee, A Data Bk: Healthcare Spending and the Medicare Prgram, June Fr cmparable data fr 2008, see M. Gld and M. Hudsn, Medicare Advantage Benefit Design: What Des It Prvide, What Desn t It Prvide, and Shuld Standards Apply? Washingtn DC: AARP Public Plicy Institute, March Fr infrmatin n Medicare Advantage premiums, see Kaiser Family Fundatin, Medicare Advantage 2010 Data Sptlight: Plan Availability and Premiums, Nvember Cnsumer Reprts magazine, Hear Well in a Nisy Wrld, July M. Gld, M. Hudsn, and S. Davis, 2006 Medicare Advantage Benefits and Premiums, Washingtn, D.C.: AARP Public Plicy Institute, Nvember This publicatin (#8047) is available n the Kaiser Family Fundatin s website at 7