Medicare Advantage in 2023: Enrollment Update and Key Trends

Medicare Advantage enrollment has been on a steady climb for the past two decades following changes in policy designed to encourage a robust role for private plan options in Medicare. After a period of some instability in terms of plan participation and enrollment, The Medicare Modernization Act of 2003 created stronger financial incentives for plans to participate in the program throughout the country and renamed private Medicare plans Medicare Advantage. In 2023, 30.8 million people are enrolled in a Medicare Advantage plan, accounting for more than half, or 51 percent, of the eligible Medicare population, and $454 billion (or 54%) of total federal Medicare spending (net of premiums). The average Medicare beneficiary in 2023 has access to 43 Medicare Advantage plans, the largest number of options ever.

To better understand trends in the growth of the program, this brief provides current information about Medicare Advantage enrollment, by plan type and firm, and shows how enrollment varies by state and county. A second, companion analysis describes Medicare Advantage premiums, out-of-pocket limits, cost sharing, extra benefits offered, prior authorization requirements, and star ratings in 2023.

Key highlights include:

  • More than half (51%) of eligible Medicare beneficiaries are enrolled in Medicare Advantage in 2023.
  • The share of Medicare beneficiaries enrolled in Medicare Advantage varies widely across counties. In 2023, nearly one third (31%) of Medicare beneficiaries live in a county where at least 60 percent of all Medicare beneficiaries are enrolled in Medicare Advantage plans, while 10% live in a county where less than one third of all Medicare beneficiaries are enrolled in Medicare Advantage plans. The wide variation in county enrollment rates could reflect several factors, such as differences in firm strategy, urbanicity of the county, Medicare payment rates, number of Medicare beneficiaries, health care use patterns, and historical Medicare Advantage market penetration.
  • Medicare Advantage enrollment is highly concentrated among a small number of firms. UnitedHealthcare and Humana account for nearly half (47%) of all Medicare Advantage enrollees nationwide, and in nearly a third of counties (32%; or 1,013 counties), these two firms account for at least 75% of Medicare Advantage enrollment. 

More than half of eligible Medicare beneficiaries are enrolled in Medicare Advantage in 2023

In 2023, more than half (51%) of eligible Medicare beneficiaries – 30.8 million people out of 60.0 million Medicare beneficiaries with both Medicare Parts A and B – are enrolled in Medicare Advantage plans. Medicare Advantage enrollment as a share of the eligible Medicare population has jumped from 19% in 2007 to 51% in 2023 (Figure 1).

Between 2022 and 2023, total Medicare Advantage enrollment grew by about 2.3 million beneficiaries, or 8 percent – a similar growth rate to the prior year (8%). The Congressional Budget Office (CBO) projects that the share of all Medicare beneficiaries enrolled in Medicare Advantage plans will rise to 62 percent by 2033 (Figure 2).

In 2023, nearly two-thirds of Medicare Advantage enrollees are in individual plans that are open for general enrollment.

Nearly two-thirds (64%) of Medicare Advantage enrollees, or 19.6 million people, are in plans generally available to all beneficiaries for individual enrollment (Figure 3). That is an increase of 0.9 million enrollees compared to 2022. Individual plans have accounted for approximately the same share of total Medicare Advantage enrollment since 2018.

One in five (about 5.4 million) Medicare Advantage enrollees are in a group plan offered to retirees by an employer or union.

While this is roughly the same share of total Medicare Advantage enrollment since 2010 (18%), the actual number has increased from 1.8 million in 2010 to 5.4 million in 2023 (Figure 4). With a group plan, an employer or union contracts with an insurer and Medicare pays the insurer a fixed amount per enrollee to provide benefits covered by Medicare. For example, some states, such as Illinois and Pennsylvania, provide health insurance benefits to their Medicare-eligible retirees exclusively through Medicare Advantage plans.

As with other Medicare Advantage plans, employer and union group plans may provide additional benefits and/or lower cost sharing than traditional Medicare and are eligible for bonus payments if they obtain required quality scores. The employer or union (and sometimes the retiree) may also pay an additional premium for these supplemental benefits. Group enrollees comprise a third or more of Medicare Advantage enrollees in five states: Alaska (99%), Michigan (40%), New Jersey (34%), Maryland (33%), and West Virginia (33%).

More than 5.7 million Medicare beneficiaries are enrolled in special needs plans in 2023, double the enrollment in 2018.

More than 5.7 million Medicare beneficiaries are enrolled in special needs plans (SNPs). SNPs restrict enrollment to specific types of beneficiaries with significant or relatively specialized care needs, or who qualify because they are eligible for both Medicare and Medicaid. Enrollment in SNPs increased by 24% between 2022 and 2023, and accounts for 19% of total Medicare Advantage enrollment in 2023.  Since 2018, SNP enrollment has doubled from 2.58 million to 5.74 million (Figure 5).

Most SNP enrollees (89%) are in plans for beneficiaries dually enrolled in both Medicare and Medicaid (D-SNPs). Another 9 percent of SNP enrollees are in plans for people with severe chronic or disabling conditions (C-SNPs) and 2 percent are in plans for beneficiaries requiring a nursing home or institutional level of care (I-SNPs).

While D-SNPs are designed specifically for dually-eligible individuals, 1.9 million Medicare beneficiaries with Medicaid were enrolled in Medicare Advantage plans generally available to all beneficiaries (not designed specifically for this population) in 2020, while 2.9 million were in D-SNPs.

SNP enrollment varies across states. In the District of Columbia and Puerto Rico, SNPs comprise about half of all Medicare Advantage enrollees (48% in DC and 49% in PR). In 12 states, SNP enrollment accounts for at least one-fifth of Medicare Advantage enrollment (39% in MS, 31% in AR and LA, 30% in NY, 26% in FL and GA, 24% in CT, 22% in SC and AL, 21% in HI, and 20% in TX and AZ). Most (96%) C-SNP enrollees (about 446,000 people) are in plans for people with diabetes or cardiovascular conditions in 2023. Enrollment in I-SNPs has been increasing slightly, with approximately 103,000 enrollees in 2023, up from about 92,700 in 2022.

The share of Medicare beneficiaries in Medicare Advantage plans varies by state and county

The share of Medicare beneficiaries in Medicare Advantage plans varies across states, ranging from 2% to 60%.

In three states (AL, HI, and MI) and Puerto Rico, 60 percent or more of all Medicare beneficiaries are enrolled in Medicare Advantage plans, and in 26 states (and Puerto Rico), Medicare Advantage enrollees account for at least half of all Medicare beneficiaries (Figure 6). In contrast, Medicare Advantage enrollment is relatively low (less than 40%) in 16 states and the District of Columbia, including four mostly rural states (SD, ND, WY, and AK) with less than 20 percent of beneficiaries enrolled in a Medicare Advantage plan. Overall, Puerto Rico has the highest Medicare Advantage penetration, with 94 percent of Medicare beneficiaries enrolled in a Medicare Advantage plan. A decade ago, the share of Medicare beneficiaries in Medicare Advantage plans did not exceed 50% in any state (other than Puerto Rico).

The share of Medicare beneficiaries enrolled in Medicare Advantage varies widely across counties.

For example, in Florida, 58% of all Medicare beneficiaries in the state are enrolled in Medicare Advantage, ranging from 20% in Monroe County (Key West) to 79% in Miami-Dade County (Figure 7). In Ohio, 54% of all Medicare beneficiaries are enrolled in Medicare Advantage, with the share ranging from 31% in Mercer County (Celina) to 67% in Stark County (Canton).

In 2023, 3 in 10 (31%) Medicare beneficiaries live in a county where at least 60 percent of all Medicare beneficiaries in that county are enrolled in Medicare Advantage plans (473 counties). That is substantially more than in 2010 when just 3 percent of the Medicare population lived in a county where 60 percent or more of Medicare beneficiaries were enrolled in a Medicare Advantage plan (83 counties). Many counties with high Medicare Advantage penetration are centered around relatively large, urban areas, such as Monroe County, NY (80%), which includes Rochester, and Allegheny County, PA (73%), which includes Pittsburgh. In contrast, 1 in 10 (10%) Medicare beneficiaries live in a county where less than a third of all Medicare beneficiaries in that county are enrolled in Medicare Advantage plans (967 counties). Counties with relatively low enrollment tend to be less populated rural areas. However, others, such Montgomery County, MD (25%) and Suffolk, NY (29%), which includes most of Long Island, are in more populous areas.

Variation in the share of eligible Medicare beneficiaries who are enrolled in a Medicare Advantage plan is likely explained by a combination of factors, including firm-level strategies to target particular geographic areas, the urbanicity of the county and state, variation in Medicare payment rates, the number and characteristics of people eligible for Medicare, health care use patterns, and the historical Medicare Advantage market penetration.

Medicare Advantage enrollment is highly concentrated among a small number of firms

The average Medicare beneficiary is able to choose from Medicare Advantage plans offered by 9 firms in 2023, and four in ten (40%) beneficiaries can choose among Medicare Advantage plans offered by 10 or more firms.

UnitedHealthcare and Humana account for nearly half of all Medicare Advantage enrollees nationwide in 2023

Despite most beneficiaries having access to plans operated by several different firms, Medicare Advantage enrollment is highly concentrated among a small number of firms. UnitedHealthcare, alone, accounts for 29% of all Medicare Advantage enrollment in 2023, or 8.9 million enrollees. Together, UnitedHealthcare and Humana account for nearly half (47%) of all Medicare Advantage enrollees nationwide. In nearly a third of counties (32%; or 1,013 counties), these two firms account for at least 75% of Medicare Advantage enrollment. These counties include East Baton Rouge (Baton Rouge), LA (81%), Clark County (Las Vegas), NV (79%), Travis County (Austin), FL (78%), and El Paso County (Colorado Springs), CO (77%).

BCBS affiliates (including Anthem BCBS plans) account for 14 percent of enrollment, and four firms (CVS Health, Kaiser Permanente, Centene, and Cigna) account for another 23 percent of enrollment in 2022.

UnitedHealthcare and Humana have consistently accounted for a relatively large share of Medicare Advantage enrollment.

UnitedHealthcare has had the largest share of Medicare Advantage enrollment and largest growth in enrollment since 2010, increasing from 20 percent of all Medicare Advantage enrollment in 2010 to 29 percent in 2023. Humana has also had a high share of Medicare Advantage enrollment, though its share of enrollment has grown more slowly, from 16 percent in 2010 to 18 percent in 2023. BCBS plans share of enrollment has been more constant over time, but has declined moderately since 2014.

CVS Health, which purchased Aetna in 2018, has seen its share of enrollment nearly double from 6 percent in 2010 to 11 percent in 2023. Kaiser Permanente now accounts for 6 percent of total enrollment, a moderate decline as a share of total Medicare Advantage enrollment since 2010 (9%), mainly due to the growth of enrollment in plans offered by other insurers and only a modest increase in enrollment growth for Kaiser Permanente over that time. However, for those insurers that have seen declines in their overall share of enrollment, the actual number of enrollees for each insurer is larger than it was in 2010.

For the seventh year in a row, enrollment in UnitedHealthcare’s plans grew more than any other firm, increasing by more than 1 million beneficiaries between March 2022 and March 2023. Humana had the second largest growth in plan year enrollment, with an increase of about 512,000 beneficiaries between March 2022 and March 2023. BCBS plans had the third highest growth in plan year enrollment of 296,000 beneficiaries between March 2022 and March 2023. CVS Health had the fourth largest growth in plan enrollment with an increase of about 217,000, followed by Kaiser Permanente, increasing by about 51,000 beneficiaries between March 2022 and March 2023. However, Centene actually lost enrollees, declining by about 91,000 between March 2022 and March 2023.

Discussion

Medicare Advantage enrollment has increased steadily in recent years, with half (51%) of all eligible Medicare beneficiaries enrolled in Medicare Advantage plans in 2023. The share of Medicare beneficiaries enrolled in Medicare Advantage varies widely across counties. Three in ten Medicare beneficiaries live in a county where at least 60 percent of all Medicare beneficiaries are enrolled in Medicare Advantage plans. In contrast, 1 in 10 live in a county where less than a third of all Medicare beneficiaries are enrolled in Medicare Advantage plans. Enrollment continues to be highly concentrated among a handful of firms, both nationally and in local markets, with UnitedHealthcare and Humana together accounting for 47 percent of enrollment in 2023 nationwide.

As Medicare Advantage takes on a more dominant presence in the Medicare program, and with current payments to plans higher for Medicare Advantage than for traditional Medicare for similar beneficiaries, it will become increasingly relevant to assess how well Medicare’s current payment methodology for Medicare Advantage is working to enhance efficiency and hold down beneficiary costs and Medicare spending. Additional considerations include monitoring how well beneficiaries are being served in both Medicare Advantage and traditional Medicare, in terms of costs, benefits, quality of care, patient outcomes, and access to providers, with particular attention to those with the greatest needs. While there is a growing body of research comparing Medicare Advantage and traditional Medicare, gaps in Medicare Advantage data limit the ability to evaluate whether higher spending is leading to better value for enrollees and taxpayers, better outcomes or reduced disparities.

Nancy Ochieng, Jeannie Fuglesten Biniek, Meredith Freed, and Tricia Neuman are with KFF. Anthony Damico is an independent consultant

Methods
This analysis uses data from the Centers for Medicare & Medicaid Services (CMS) Medicare Advantage Enrollment, Benefit and Landscape files for the respective year. KFF uses the Medicare Enrollment Dashboard for enrollment data, from March of each year. Trend analysis begins at 2007 because that was the earliest year of data that was based on March enrollment.

KFF calculates the share of eligible Medicare beneficiaries enrolled in Medicare Advantage, meaning they must have both Part A and B coverage. The share of enrollees in Medicare Advantage would be somewhat smaller if based on the total Medicare population that includes 5.7 million beneficiaries with Part A only or Part B only (in 2023) who are not generally eligible to enroll in a Medicare Advantage plan.

In previous years, KFF calculated the share of Medicare beneficiaries enrolled in Medicare Advantage by including Medicare beneficiaries with either Part A and/or B coverage. We modified our approach in 2022 to estimate the share enrolled among beneficiaries eligible for Medicare Advantage who have both Medicare Part A and Medicare B. In the past, the number of beneficiaries enrolled in Medicare Advantage was smaller and therefore the difference between the share enrolled with Part A and/or B vs Part A and B was also smaller. For example, in 2010, 24% of all Medicare enrollees were in enrolled in Medicare Advantage versus 25% with just Parts A and B. However, these shares have diverged over time: in 2023, 48% of all Medicare enrollees were in enrolled in Medicare Advantage versus 51% with just Parts A and B. These changes are reflected in all data displayed trending back to 2010.

Additionally, in previous years, KFF had used the term Medicare Advantage to refer to Medicare Advantage plans as well as other types of private plans, including cost plans, PACE plans, and HCPPs. However, cost plans, PACE plans, and HCPPs are now excluded from this analysis in addition to MMPs. In this analysis, KFF excludes these other plans as some may have different enrollment requirements than Medicare Advantage plans (e.g., may be available to beneficiaries with only Part B coverage) and in some cases, may be paid differently than Medicare Advantage plans. These exclusions are reflected in all data displayed trending back to 2010.

Medicare projections for 2023-2023 are from the May Congressional Budget Office (CBO) Medicare Baseline for 2023. According to the CBO baseline, Medicare enrollment is based on individuals who are enrolled in Part B, which is designed to include only individuals who are eligible for Medicare Advantage and exclude those who only have Part A only (~5 million people in 2023) and cannot enroll in Medicare Advantage. However, it may include some individuals who have Part B only and also are not eligible for Medicare Advantage.

Enrollment counts in publications by firms operating in the Medicare Advantage market, such as company financial statements, might differ from KFF estimates due to inclusion or exclusion of certain plan types, such as SNPs or employer group health plans.

 

KFF Headquarters: 185 Berry St., Suite 2000, San Francisco, CA 94107 | Phone 650-854-9400
Washington Offices and Barbara Jordan Conference Center: 1330 G Street, NW, Washington, DC 20005 | Phone 202-347-5270

www.kff.org | Email Alerts: kff.org/email | facebook.com/KFF | twitter.com/kff

The independent source for health policy research, polling, and news, KFF is a nonprofit organization based in San Francisco, California.