In the health insurance competition between traditional Medicare and insurance company-sponsored Medicare Advantage plans, health insurers typically claim that their consumer-driven “advantage” programs cost less and give you more.

A closer look, however, indicates that Medicare Advantage programs may offer little benefit.

When researchers from Brown University and Korea University analyzed claims made about Advantage plans' lower cost, they found they do not offer more coverage for less money. The findings are based on the responses of healthcare consumers as detailed in the Medical Expenditure Panel Survey. This survey tracks respondents over two years to measure whether or not the financial burden of health care improved for persons switching from traditional Medicare to a Medicare Advantage plan, compared to those consumers who stayed in traditional Medicare.

People who switched to Medicare Advantage had costs similar to those who stayed with traditional Medicare, but healthcare protection for the Medicare Advantage switchers was worse than it had been with traditional Medicare.

The investigators identified the 18 percent of the survey respondents who were covered by traditional Medicare in the first year, but then switched to Medicare Advantage in the second year. They compared out-of-pocket spending in the second year and patient-reported measures of healthcare for the two groups — those staying in traditional Medicare versus the 18 percent who switched to Medicare Advantage.

In order to account for any differences in the two groups that were not related to healthcare costs, the researchers constructed a model that leveled out any differences in demographics, health status, use of specific services like hospitalization, subjective financial burdens and out-of-pocket costs.

The researchers found that respondents who switched to Medicare Advantage had similar costs as those who stayed with traditional Medicare. They also determined that health care protection for the Medicare Advantage switchers was worse, especially among vulnerable populations, such as those with low incomes.

These findings are contrary to the claim that Medicare Advantage's more generous health insurance benefits lead to financial savings for enrollees. It is possible that Medicare Advantage plans may still provide more generous benefits than traditional Medicare for those requiring standard care and inexpensive medications, including out-of-pocket spending limits, lower costs for in-network services and supplemental benefits.

But the study does call into question whether the substantial federal dollars spent on Medicare Advantage result in better health outcomes. Regulatory measures may be required to ensure that Medicare Advantage funding actually benefits enrollees as claimed in Medicare Advantage advertising and marketing.

The study and a related editorial are published in Annals of Internal Medicine.