According to a new analysis, Medicare Advantage will soon surpass traditional Medicare as the method by which most eligible beneficiaries get coverage.
Medicare Advantage plans are private health insurance policies sold through Medicare, which pays its costs directly to the insurer. Traditional Medicare is covered through Original Medicare, which provides seniors with a base set of benefits under Part A (hospitalization) and Part B (physician care). The remainder of care is paid for out of pocket or through supplemental insurance such as Medigap or other types of supplemental coverage.
Medicare Advantage, a private health plan that provides Medicare benefits, is the fastest-growing segment of the program. The government has been paying more and more money to these plans over the past few years, which has led some critics to argue that Medicare Advantage is crowding out traditional Medicare.
According to the Kaiser Family Foundation, Medicare Advantage enrollment could exceed 50% by 2023. The Medicare Advantage population currently enrolled is 48%, 46% more than in 2021. According to a report, the Congressional Budget Office predicts that Medicare Advantage plans will cover 61% of eligible enrollees in 2032.
A three-part study revealed that 70% of Medicare Advantage enrollees do not pay a premium for prescription drugs. Nearly all people eligible for coverage under plans that allow general enrollment to have to access the following benefits: eye and hearing exams, glasses, and hearing aids.
On the other hand, 99% of Medicare Advantage enrollees are in plans that require prior authorizations for some services, including physician-administered prescription drugs and inpatient hospital and skilled nursing stays.
Other findings from the study include:
- Two-thirds are enrolled in Medicare Advantage plans. The rest are enrolled in special needs plans, employer- or union-sponsored group programs, or special needs plans.
- Most Medicare Advantage plan enrollment is concentrated in a few commercial insurance companies. 46% of enrollees are UnitedHealthcare or Humana. Nearly a third of all counties have at least 75%Medicare Advantage enrollment from UnitedHealthcare or Humana.
- United Healthcare’s Medicare Advantage enrollment has increased by 28% since 2010. It went from 20% to 28% of all enrollees in 2010 and 20% to 20% in 2022. The company added over 749 000 beneficiaries between 2021-2022, making it the sixth consecutive year of the highest Medicare Advantage enrollment. Since 2010, the number of beneficiaries has increased by 20%
- The state-level percentages for Medicare beneficiaries in Medicare Advantage programs vary from less than 20% in four states (Alaska and North and South Dakota) to 93% in Puerto Rico.
- Since 2015, government spending on Medicare Advantage quality bonuses payments has increased yearly. It is estimated that it will reach $10 billion by 2022.