Low income beneficiaries are opting in significant numbers for Medicare Advantage and Medigap insurance over Medicare fee-for-service alone, according to two new studies released last week.

Conducted by the America’s Health Insurance Plans’ Center for Policy and Research, the reports also indicate that low income Medicare beneficiaries living in rural areas have found Medigap coverage to be particularly valuable. Additionally, the report found that Medicare advantage has become an important option for low income and minority beneficiaries.

According to Karen Ignagni, president and chief executive officer of AHIP, Washington, the reports are evidence that Medicare Advantage and Medigap coverage have been successful in improving access to affordable health care for low income beneficiaries.

“Private-sector coverage options strengthen the safety net for low-income Medicare beneficiaries and help expand access to important health care services,” said Ms. Ignagni. “These results demonstrate the enhanced value of vibrant public-private partnerships.”

According to the Medicare Advantage study, 50% of Medicare Advantage enrollees in 2002 had incomes less than $20,000. That figure was even higher among minorities, with 71% of minority enrollees at an income level below $20,000.

Additionally, the Medicare Advantage study found that in some areas of the country, mostly those with a high population density, over half of those low income beneficiaries who were not enrolled in Medicaid or had employer-based coverage opted for a Medicare Adavantage plan.

The study of Medigap coverage found that policyholders more often lived in rural areas and generally had lower than average income in comparison with all other Medicare beneficiaries not eligible for Medicaid. Nearly one third of Medigap policyholders live in a rural area, compared to 24% of Medicare beneficiaries overall.

A total of 45%, of Medigap policyholders had income levels under $20,000, which increased to 53% when counting only those policyholders living in rural areas.

Both the Medicare Advantage and the Medigap studies were based on data from the 2002 Medicare Current Beneficiary Survey conducted by the Centers for Medicare and Medicaid Services.