Almost half of eligible Medicare beneficiaries use Medicare Advantage, analysis shows

A new analysis from the Kaiser Family Foundation shows that increasing numbers of Medicare beneficiaries are enrolled in Medicare Advantage plans. In fact, 48% of all eligible enrollees use Medicare Advantage, and that number is expected to rise to over 50% next year.

Some 28.4 million people are currently insured by Medicare Advantage, an alternate option to original Medicare which has steadily grown in popularity since 2007, when only 19% of eligible Medicare beneficiaries were in Advantage plans. 

In fact, in the last year alone, 2.2 million more people enrolled in Medicare Advantage plans, an 8% year-over-year growth.

Medicare Advantage allows enrollees to select health insurance plans from private employers. The largest health insurance company working through Medicare Advantage is UnitedHealth Care, with about 7.9 million enrollees, nearly 750,000 of whom joined in the last year. UnitedHealthcare’s share of the Medicare Advantage market is growing, too: in 2010, only 20% of Advantage users had UHC plans, compared to 28% of Advantage enrollees now.

Almost half of all Medicare Advantage enrollees use either UnitedHealthcare or Humana plans, the report notes. Other large insurance companies also have significant numbers of enrollees in the program, including Blue Cross Blue Shield and CVS Health.

As a result of the shift towards Medicare Advantage plans, federal payouts to health insurance companies have increased. In 2022, the federal government is expected to pay $10 billion on Medicare Advantage bonus payments, with $2.8 billion going to UnitedHealthcare alone.

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The report notes that it’s important to keep an eye on this trend. “As Medicare Advantage takes on an even larger presence in the Medicare program, and with current payments to plans higher for Medicare Advantage than for traditional Medicare for similar beneficiaries, it will be increasingly important 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,” the analysis says. 

“It will also be important to monitor 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,” the report concludes.