Medicare Advantage – Status Update

Medicare Advantage plans or Medicare Part C and D plans continue to grow in popularity. I’ve written a number of posts on various Medicare Advantage topics, of late, coverage issues and denials, particularly for post-acute care stays. A recent post on that topic is here: https://wp.me/ptUlY-wI

Medicare Advantage plans (Part C plans) include Parts A, B, and D (inpatient, outpatient and prescription drugs), in a single insured contract/plan. These plans are offered by insurers, the largest of which are Humana, United Healthcare, Aetna, and various Blue Cross plans. They replace traditional Medicare fee-for-service coverages, adding more coverages but never less, for a fixed premium amount (the premium amount is subject to income level adjustment).

Medicare Advantage plans have steadily gained market penetration and popularity, particularly among younger seniors (65-70).  This group is likely familiar with the insurers, maybe even had commercial coverage with the insurer when employed.  Similarly, the plan design concepts within Medicare Advantage plans ala managed care or preferred provider organizations, are customary to this group.  

Younger, healthier seniors are readily attracted to Medicare Advantage plans as the plans emphasize preventative care services, expanded drug benefits, lifestyle benefits (health clubs, massage, chiropractic), and often, vision coverage.  The cost is lower compared to Medicare fee-for-service and on a per benefit basis, Medicare Advantage plans are generally cheaper (lower to no deductibles, etc.).

Where Medicare fee-for-service remains popular is among older seniors, unfamiliar and somewhat distrusting, of large insurers and insurance plans.  Likewise, older seniors or seniors with extensive pre-existing health problems and established physician and provider connections, prefer the traditional coverage fee-for-service provides with full choice over providers, regardless of location.  Fee-for-service also tends to have more participants in rural areas where Medicare Advantage plans don’t exist or are much more limited, though plans are expanding and penetration in rural areas is increasing.

Yesterday I obtained the 2023 “State of Medicare Advantage Report” from the Better Medicare Alliance. The Alliance is a non-profit organization in Washington, D.C. that exists to support and where applicable, improve education and programmatics for Medicare Advantage plans.  The report is available here: 2023-State-of-Medicare-Advantage

What is interesting to note is that penetration or the number of enrollees in Medicare Advantage (across all eligibles) has now eclipsed 50% (51%). In some states and in some regions, the percentage is dominant compared to fee-for-service participants. States such as Wisconsin, Michigan, Ohio, Minnesota, Florida, and Texas (not the full list) have participation rates at 60% or higher.  As portability improves, penetration will grow in states that attract inward migration (Florida, North Carolina, Texas, etc.).

A fast-growing segment within Medicare Advantage ‘world’ is known as Employer Group Waiver Plans.  These plans allow employers to provide ongoing coverage to their retirees, typically consistent with labor union contracts and retired government employee programs.

Another rapid growing segment is SNP options or Medicare D plans that cover dually eligible participants (Medicare and Medicaid eligible, known as D-SNP), participants with chronic illnesses (C-SNP), or dually eligible participants residing in institutional settings (I-SNP).  Institutional settings typically are senior living environments.  The plans continue to grow at a rate of 24% or so per year, representing 19% of all Medicare Advantage participants.

A few other quick facts from the report…

• 31 million Medicare eligible people are now covered by Medicare Advantage plans.
• 27% are minorities (Asian, Black, Latino), compared to 17% covered by fee-for-service Medicare.
• Rural coverage has expanded by 4 x since 2010 – now 40% of eligible beneficiaries.
• 92% of enrollees participate in a plan with prescription drug coverage.
• The average monthly Medicare Advantage premium in 2023 was $18 per month.
• Enrollment breakdowns are: 53% metropolitan, 44% suburban/exurban, and 40% rural