As of 2024, more people are enrolled in Medicare Advantage plans than in traditional Medicare.
Here’s a breakdown:
Medicare Advantage Enrollment: In 2024, more than half (54%) of eligible Medicare beneficiaries were enrolled in a Medicare Advantage plan, totaling 32.8 million people. This is a significant increase from 19% in 2007.
Traditional Medicare Enrollment: While still a substantial number, traditional Medicare enrollment is slightly lower than Medicare Advantage. In 2024, there were 33.3 million beneficiaries enrolled in fee-for-service (FFS) plans.
Growth Trends: Medicare Advantage enrollment has grown rapidly, more than doubling since 2010 and projected to reach 60% of the eligible population by the end of the decade.
Factors contributing to this growth include:
Extra Benefits: Medicare Advantage plans often offer supplemental benefits not available in traditional Medicare, such as dental, vision, and hearing coverage.
Out-of-Pocket Limits: These plans are required to limit out-of-pocket spending, making them appealing to beneficiaries.
Lower Premiums: Many Medicare Advantage plans have low or zero premiums (besides the Part B premium), and some studies suggest this contributes to lower out-of-pocket spending compared to traditional Medicare without supplemental coverage.
Important Notes:
Dual Eligibles: A significant portion of Medicare Advantage enrollees are also eligible for Medicaid (dual-eligible individuals).
Employer Coverage: A growing share of employers offering retiree health benefits are shifting to Medicare Advantage plans.
Geographic Variations: The share of Medicare beneficiaries enrolled in Medicare Advantage varies by state, ranging from 2% to 63% in 2024
Why are people leaving Advantage plans?
People leave Medicare Advantage plans due to issues like limited access to care, high out-of-pocket costs, and dissatisfaction with the extra benefits offered. Many find it difficult to navigate the plan’s network restrictions, particularly when it comes to specialists or out-of-network care. Additionally, some beneficiaries experience delays in care due to prior authorization requirements. Some may also find that the additional benefits offered by Medicare Advantage plans are not as helpful as they anticipated, or that the plans change their benefits or provider networks annually, making it difficult to plan for their healthcare needs.
Here’s a more detailed look at the reasons:
Limited Network and Access to Care:
Medicare Advantage plans often have a network of doctors and hospitals that beneficiaries must use. If a beneficiary’s preferred doctor or specialist isn’t in the network, they may face higher costs, limited access to care, or have to travel further for appointments.
High Out-of-Pocket Costs:
While Medicare Advantage plans may have lower premiums than Medigap plans, they can have higher out-of-pocket costs for some services, especially if beneficiaries need to see specialists or require out-of-network care.
Disappointment with Additional Benefits:
Many people enroll in Medicare Advantage plans expecting to receive a wide range of extra benefits, such as dental, vision, and hearing coverage. However, some find that these benefits are limited in scope or coverage, or that they are difficult to access.
Annual Changes to Benefits and Networks:
Medicare Advantage plans can change their benefits and provider networks annually. This can be disruptive for beneficiaries, as it may mean that their preferred doctors or hospitals are no longer in-network, or that their coverage for certain services is reduced.
Prior Authorization Requirements:
Some Medicare Advantage plans require prior authorization for certain services or medications, which can cause delays in care and create additional administrative burden for both patients and providers.
Feeling Trapped:
Some beneficiaries feel trapped in their Medicare Advantage plans, particularly if they have developed health conditions that make it difficult or costly to switch to Original Medicare or another plan. This can be due to the limited enrollment periods for switching plans, or the potential for higher costs associated with switching.