As Medicare Advantage (MA) continues to grow, a new Kaiser Family Foundation (KFF) analysis finds a gradual but significant reshaping of the Medicare program is taking place.
The KFF study on MA enrollment and key trends in 2022 finds that nearly half of eligible Medicare beneficiaries—28.4 million out of 58.6 million Medicare beneficiaries overall—are now enrolled in MA plans. That represents a more than doubling of the share of the eligible Medicare population enrolled in such plans from 2007 to 2022 (19 percent to 48 percent).
Enrollment is projected to cross the 50 percent threshold as soon as next year, making MA the predominant way that Medicare beneficiaries with Parts A and B get their coverage and care, KFF said in an announcement.
The rise of MA signals the transformation of Medicare to a program in which most people receive benefits by enrolling in plans offered by private health insurance companies.
The new analysis is one of three released by KFF that examine various aspects of MA. In addition to the latest data on MA enrollment, a companion analysis describes MA premiums, out-of-pocket limits, cost sharing, extra benefits offered, and prior authorization requirements. A third study examines trends in bonus payments to MA plans, enrollment in plans in bonus status, and how these measures vary across plan types and firms.
Among the key findings from the reports:
- Enrollment in private plans is highly concentrated among a small number of firms, with UnitedHealthcare and Humana together accounting for 46 percent of all MA enrollees nationwide. In nearly a third of counties across the U.S., these two firms account for at least 75 percent of MA enrollment.
- In 2022, nearly 7 in 10 MA enrollees (69 percent) are in plans with prescription drug coverage (MA-PDs) that require no premium other than the Medicare Part B premium ($170.10 in 2022).
- Nearly all enrollees in individual MA plans open for general enrollment have access to some benefits not covered by traditional Medicare, including eye exams and/or glasses (99 percent), hearing exams and/or aids (98 percent), and a fitness benefit (98 percent).
- Virtually all MA enrollees (99 percent) are in plans that require prior authorization for some services. Prior authorization is most often required for relatively expensive services, such as prescription drugs administered by a physician (Part B drugs; 99 percent), skilled nursing facility stays (98 percent), and inpatient hospital stays (acute: 98 percent; psychiatric: 94 percent), but it is rarely required for preventive services (6 percent).
- Federal spending on MA bonus payments has increased every year since 2015 and will reach at least $10 billion in 2022. Payments vary across firms, with UnitedHealthcare receiving the largest total payments ($2.8 billion) and Kaiser Permanente receiving the highest payment per enrollee ($521). Recently, the Medicare Payment Advisory Commission (MedPAC) and others have raised questions about whether the bonus program includes too many measures, does not adequately account for social risk factors, and may not be a useful indicator of quality for beneficiaries.