Half of All Eligible Medicare Beneficiaries Are Now Enrolled in Private Medicare Advantage Plans
Jeannie Fuglesten Biniek Follow @jeanniebin on Twitter , Meredith Freed Follow @meredith_freed on Twitter , Anthony Damico , and Tricia Neuman Follow @tricia_neuman on Twitter May 01, 2023
According to recently released data from the Centers for Medicare & Medicaid Services (CMS), Medicare Advantage now provides Medicare coverage for just over half of eligible beneficiaries. In January 2023, 30.19 million of the 59.82 million people with both Medicare Part A and Part B were enrolled in a private plan (Figure 1).
Medicare Advantage, the private plan alternative to traditional Medicare, covers Medicare Part A and B benefits (and typically Part D benefits), often for no additional premium (other than the Part B premium). Insurance companies contract with the Medicare program and receive payments for providing these services.
Enrollment in Medicare Advantage has increased dramatically in recent years. In 2007, less than one in five (19%) eligible Medicare beneficiaries were enrolled in a private plan. The growth in enrollment is due to a number of factors, including the attraction of extra benefits offered by most plans, such as vision, hearing, and dental services, and the potential for lower out-of-pocket spending, particularly compared to traditional Medicare without supplemental coverage. Medicare Advantage plans also offer the simplicity of one-stop shopping, in that enrollees do not need a separate Part D prescription drug plan or supplemental coverage.
At the same time, Medicare Advantage plans typically use tools to manage utilization and costs that may limit access to care, such as prior authorization requirements and referrals for specialists and mental health providers. For example, in 2021, Medicare Advantage enrollees submitted 35 million prior authorization requests. In addition, Medicare Advantage plans generally require enrollees to receive care from in-network providers or pay more out-of-pocket for out-of-network care.
As the role of Medicare Advantage grows, so will interest in understanding how well the program serves the increasingly diverse group of enrollees who receive their Medicare coverage from private insurers, including a disproportionate share of Black, Hispanic and Asian and Pacific Islander beneficiaries. A recent review of evidence on how Medicare Advantage compares to traditional Medicare found few differences between the programs. Additionally, gaps in data make it difficult to evaluate plan performance, including assessments of the program’s impact on value and equity.
Jeannie Fuglesten Biniek, Meredith Freed, and Tricia Neuman are with KFF. Anthony Damico is an independent consultant.
This work was supported in part by Arnold Ventures. KFF maintains full editorial control over all of its policy analysis, polling, and journalism activities.
|This analysis uses data from the CMS Medicare Advantage Enrollment files for the respective year as well as the CMS Medicare Enrollment Dashboard from March of each year, except 2023, which uses January. KFF calculates the share of eligible Medicare beneficiaries enrolled in Medicare Advantage, meaning they must have both Part A and B coverage. The share 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 who are not generally eligible to enroll in a Medicare Advantage plan.|