- Medicare Advantage plans added 22.2 million beneficiaries while traditional Medicare lost 1 million enrollees from 2006 through 2022, according to a study published Monday in Health Affairs.
- Adjusted MA penetration nationally in 2022 was just shy of 50%, and 24% of Medicare enrollees with Parts A and B lived in a county with adjusted penetration equal or above 60%, the study found.
- The rise in MA enrollment and penetration “indicates that beneficiaries are reforming Medicare with their feet,” the study’s authors wrote.
MA plans have seen significant growth in recent years, with enrollment rising 337% from 2006 through 2022, according to the Health Affairs study.
The private plan alternative to traditional Medicare “is likely to soon overtake traditional Medicare enrollment, and our findings indicate that this has actually already happened in counties where many Medicare beneficiaries live,” the study’s authors wrote.
It comes as regulators seek greater oversight of the plans, run by private insurers, which are paid capitated rates to provide health coverage to millions of Americans.
MA plans have drawn controversy over risk adjustment processes, how benchmarks are calculated and other measures that could get payers higher payments from the government.
The CMS recently announced a final rule to crack down on MA plan audits that would likely claw back billions in overpayments made to plans beginning in 2018, with regulators now extrapolating from a small subset of audits and applying the error rates to a payer’s MA businesses.
In the Health Affairs study, researchers found that adjusted MA penetration rose from 16.9% in 2006 to 49.9% in 2022 nationally, according to the study.
MA growth has happened broadly across counties and age groups, with nearly two-thirds of Medicare beneficiaries living in a county with 45% MA penetration or greater in 2022, the report found.
Researchers calculated adjusted MA penetration as a share of Medicare enrollees eligible to participate in MA plans, rather than as a share of Medicare enrollees overall, as MA enrollees must have both Parts A and B, unlike traditional Medicare enrollees who can be in either Part A or Part B or both.
The study’s authors primarily relied on CMS data from 2006 through 2022.
“These findings are particularly salient as policy makers debate the merits of various reforms to the MA payment system,” they wrote.
As MA penetration continues to grow, the findings could raise more concerns about MA benchmarks, which are set according to spending data among traditional Medicare beneficiaries.
While more research is needed, a policy option that could help would be shifting toward approaches that separate MA payment from county-level spending among traditional Medicare enrollees, like competitive bidding, according to the study.
“Policy discussions about the future of the Medicare program would be well served by recognizing these trends and accounting for the dramatic shifts in the preferences exercised by Medicare beneficiaries in recent years,” the study’s authors wrote.