Medicare Advantage Versus the Traditional Medicare Program: Costs of Inpatient Stays
Most individuals eligible for Medicare coverage administered through the Centers for Medicare & Medicaid Services (CMS), a U.S. Federal agency, have the option to receive their benefits by enrolling in either the traditional Medicare program or Medicare Advantage. Through the traditional Medicare program, CMS reimburses healthcare providers directly for the services delivered to beneficiaries.
Medicare Advantage Versus the Traditional Medicare Program: Costs of Inpatient Stays, a statistical brief from the Healthcare Cost and Utilization Project, presents statistics on the costs of hospital inpatient stays among patients aged 65 years and older with a primary expected payer of Medicare Advantage versus traditional Medicare.
- Between 2009 and 2017, the number and inflation-adjusted aggregate costs of hospital stays with a primary expected payer of Medicare Advantage increased 45.4 and 68.2 percent, respectively. In contrast, the number and aggregate costs of stays with a primary expected payer of traditional Medicare decreased 12.2 and 1.9 percent, respectively, during this same time period.
- In 2017, average cost per stay and length of stay were similar for stays with a primary expected payer of Medicare Advantage ($14,900 per stay; 5.2 days) and traditional Medicare ($14,700 per stay; 5.3 days). This observation held across clinical conditions such as septicemia, heart failure, and osteoarthritis.
- From 2009 to 2017, average inflation-adjusted cost per stay increased 15.5 percent for stays with a primary expected payer of Medicare Advantage and 11.4 percent for traditional Medicare stays.
- Aggregate inpatient hospital costs for traditional Medicare patients aged 80 years older decreased 13.8 percent, from 28.6 billion in 2009 to $24.7 billion is 2017.
- From 2009 to 2017, across locations of patient residence, aggregate costs among patients with Medicare Advantage increased approximately 60-100 percent, and were similar or decreased somewhat in all locations for traditional Medicare.