Consumer / Employer, Payers

Rate of Beneficiaries Switching From Traditional Medicare to Medicare Advantage Is Growing

This is a reversal from several years ago, when more Medicare Advantage beneficiaries switched to traditional Medicare, a recent report found. Medicare Advantage has grown in popularity over the last several years.

More beneficiaries are switching to Medicare Advantage plans from traditional Medicare plans, partially leading to higher enrollment in Medicare Advantage (MA), new research shows.

This is a reversal from several years ago, the study published in JAMA Health Forum found. From 2015 to 2016, the switching rate from MA to traditional Medicare was 4.6%, compared to 4.1% for traditional Medicare to MA. This shifted during the 2016 to 2017 period, when the switching rate from MA to traditional Medicare was 3.7%, and 5.3% for traditional Medicare to MA. The gap became wider as years went on: in the 2019 to 2020 period, the switching rate from MA to traditional Medicare was 2%, compared to 6.8% the other way around.

The researchers, from KNG Health Consulting, relied on the 2014 to 2020 Master Beneficiary Summary File Limited Data Sets from the Centers for Medicare & Medicaid Services to conduct the study. They examined switching by demographic groups, Medicare-Medicaid enrollment status and mortality status.

MA enrollment has grown drastically in the last several years, accounting for 46% of the overall Medicare population in 2021, compared to 19% in 2007. In 2023, it is expected to cross the 50% threshold, the report stated. This increase is both because of more traditional Medicare beneficiaries switching to MA plans and new enrollees choosing MA plans, according to the report.

“Medicare switching behavior has changed over time, with switching into MA accounting for a larger portion of MA enrollment growth,” the researchers wrote.

Differences in switching rates were higher when broken out by dual-eligibility status, the researchers found. In the 2019 to 2020 period, MA to traditional Medicare was 1.6%, compared to 6.1% the other way around. For Medicare-Medicaid beneficiaries, the switching rate was 4.5% for MA to traditional Medicare and 11.2% for traditional to MA.

Black and Hispanic beneficiaries switched more than White beneficiaries, the study also found. In 2020, 13.4% of Black beneficiaries and 13.5% of Hispanic beneficiaries disenrolled from traditional Medicare and moved to MA, compared to 5.9% of White beneficiaries. Patterns also varied by age and mortality status, though not much by sex.

“Switching may be associated with changes in health status, inclusion of additional services in MA, cost considerations, and access to specialized health care clinicians,” the researchers said. “The observed trends may reflect a growing importance of access to non-[traditional Medicare] benefits in MA, cost considerations among beneficiaries, and divergence in the enrollment preferences of Black and Hispanic beneficiaries compared with White beneficiaries.”

Traditional Medicare beneficiaries and MA beneficiaries show similar rates of satisfaction, a recent Kaiser Family Foundation report found. However, MA enrollees are more likely to have a usual source of care and were more likely to receive preventive care, while traditional Medicare enrollees were more likely to use home health services, post-acute skilled nursing or inpatient facility care.

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