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Apr 6, 2023
Understanding Medicare Advantage EGWPs: A win-win for employers and retirees
retired couple planning for healthcare costs

While most Americans have some knowledge of Medicare and Medicare Advantage (MA) plans, the term EGWP — pronounced “egg whip”  may leave them scratching their heads or thinking about soufflés and angel food cakes.

What is EGWP?

EGWP, an acronym for Employer Group Waiver Plans, holds an important place on the Medicare menu. These plans are provided to more than 5 million retired workers by their former employers. Some cover pharmacy benefits only. Others provide medical coverage through a Medicare Advantage plan. Still others integrate pharmacy and medical benefits.

These Medicare Advantage group plans allow employers to provide retirees with consistent, cost-effective health coverage. Like all Medicare Advantage plans, they may include more robust benefits than traditional Medicare.

On average, and despite receiving enhanced benefits, Medicare beneficiaries enrolled in all types of Medicare Advantage plans spend less overall: According to research, their out-of-pocket costs average 27.6% less than those enrolled in other Medicare plans, and they spend an average of $7 less for each prescription they fill. This adds up to average savings of $1,640 a year for Medicare Advantage enrollees, compared to those enrolled in traditional Medicare.

How Medicare Advantage EGWPs work

All Medicare Advantage plans, including these group plans, provide core benefits: doctor visits, lab work, specialists, and hospital visits. Medicare Advantage EGWP plans also offer enhanced features, as do all Medicare Advantage plans. These features vary with the employer that offers them, geographic location, and other factors.

Employers may enhance their plans with components from a long list of supplemental benefits, including annual health check-ups that review every aspect of overall health and well-being, going beyond a normal yearly Medicare wellness exam; hearing and vision exams, with spending allowances for hearing aids and eyewear; caregiver support services; in-home support; access to healthy aging programs, including coaching and access to fitness centers; and meal deliveries for patients transitioning to their home after a hospital stay.

How employers and retirees benefit from group Medicare Advantage plans

Flexibility is among the reasons more and more employers are providing Medicare Advantage plans to their retirees. Savings, for employers and retirees, is another reason. In New York City, for example, Mayor Eric Adams has said the city’s Medicare Advantage plan provides premium-free health coverage and numerous other benefits while saving taxpayers $600 million a year.

This also drives satisfaction among customers. A poll conducted by Morning Consult found 95% of respondents were satisfied with their Medicare Advantage plans, while 88% said they were able to see the doctors they choose.

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