Enrollment in Medicare Advantage has doubled over the last decade, and about 45% of the Medicare population choose Medicare Advantage, according to a new report by Better Medicare Alliance. Medicare Advantage is a health insurance that gives Medicare benefits through a private-sector health insurer.
Better Medicare Alliance is a research and advocacy group that supports Medicare Advantage. The annual report compiles research and data on Medicare Advantage and its demographics and enrollment trends.
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Enrollment
With about 45% of the Medicare population choosing Medicare Advantage over fee-for-service, Better Medicare Alliance estimates that half of all Medicare-eligible beneficiaries will select Medicare Advantage by 2026.
Of those enrolled in Medicare Advantage, 33.7% identify as a racial or ethnic minority, compared to 16% Medicare fee-for-service. Minority beneficiary enrollment in Medicare Advantage has risen 111% since 2013, according to the report.
More Black and Latino Medicare beneficiaries are enrolled in Medicare Advantage: 53% of Latino beneficiaries, 49% of Black beneficiaries, 34% of White beneficiaries and 31% of beneficiaries of other races.
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Most of those enrolled in Medicare Advantage choose Medicare Advantage-Prescription Drug plans, at 90.8%. This includes their prescription drug coverage in a single plan, according to the report.
The rise in enrollment in Medicare Advantage plans was partially created by increased access to the plans, according to the report. The number of plans offered has doubled in the last decade to 3,834 in 2022, and 99.7% of beneficiaries have access to at least one Medicare Advantage plan. For those in metro areas, 99.9% of beneficiaries have access to at least one plan, compared to 98.4% of those in non-metro areas.
Affordability
Medicare Advantage plans are generally more affordable than fee-for-service plans, the report found. Those on Medicare Advantage plans spend $1,965 less on out-of-pocket costs and premiums.
The average monthly premium for Medicare Advantage is $19, a 15-year low and about 10% lower than the average Medicare Advantage premium in 2021, the report found.
Additionally, Medicare Advantage gives $32.5 billion in additional value to beneficiaries and the federal government each year. It does this by redistributing savings from providing Medicare-covered benefits for less money, according to the report. It also covers all Medicare-covered benefits for 24% less than fee-for-service plans.
Outcomes
Of those enrolled in Medicare Advantage plans, 94% report being satisfied with their coverage, according to the report.
These beneficiaries have a 43% lower rate of avoidable hospitalizations for all conditions, compared to those using fee-for-service. In 2020, during the Covid-19 pandemic, Medicare Advantage beneficiaries were hospitalized at a 19% lower rate and had a lower mortality rate when they were hospitalized compared with the hospitalization rates of fee-for-service Medicare beneficiaries.
Medicare Advantage members also have a 21% higher rate of seeing a physician within 14 days of hospital discharge, the report found.
“With a 94% beneficiary satisfaction rate, annual consumer savings of nearly $2,000 per year, better health outcomes, and lower per-beneficiary government spending, Medicare Advantage has proven its value to seniors and the health care system alike,” Mary Beth Donahue, president and CEO of the Better Medicare Alliance, said in a news release.
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