Medicare Advantage 2014 Spotlight: Enrollment Market Update

Despite concerns that payment changes enacted in the Affordable Care Act of 2010 (ACA) would lead to reductions in Medicare Advantage enrollment, the number and share of Medicare beneficiaries enrolling in Medicare Advantage plans has continued to climb.1 Since the enactment of the ACA, Medicare Advantage enrollment has increased by 4.6 million, or by 41 percent.2 Reductions in payments enacted in the ACA aimed to reduce historical overpayments to Medicare Advantage plans and to create more equity between Medicare payments made for beneficiaries in the traditional Medicare program and those joining Medicare Advantage plans. As of March of 2014, almost one in three (30 percent) people on Medicare (15.7 million beneficiaries) were enrolled in a Medicare Advantage plan, a 10 percent increase since March 2013.During the past year, Medicare Advantage enrollment has increased in virtually all states. Most of the enrollment growth since 2013 has been in the individual market, but group enrollment in Medicare Advantage plans accounted for almost one-third (32%) of the enrollment growth in 2014 and has been a major factor in the experience of some firms.

Average monthly premiums (weighted by enrollment) have remained relatively stable since 2012 ($35 per month in 2014).   During this same period, however, average out-of-pocket spending limits have been on the rise, which could expose a subset of enrollees to higher costs – mainly those who have significant medical needs.   Medicare Advantage plans, unlike traditional Medicare, are required to limit out-of-pocket costs for services covered under Parts A and B ($3,400 is recommended; $6,700 is the maximum).   Between 2013 and 2014, the share of Medicare Advantage enrollees in plans with limits above $5,000 almost doubled, from 24 percent in 2013 to 44 percent in 2014. This Data Spotlight reviews national and state-level enrollment trends as of March 2014 and examines variation in enrollment by plan type and firm. It also analyzes the most recent data on premiums, out-of-pocket limits and prescription drug coverage in the Part D “donut hole” for Medicare Advantage enrollees.


Overall Trends in Enrollment

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 | Email Alerts: | |

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