High Switching Rates from FFS to Medicare Advantage Drove MA Enrollment
In 2021, the switching rate from Medicare FFS to Medicare Advantage was 6.5 times higher than the switching rate in the opposite direction.
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- Increased rates of switching from Medicare fee-for-service (FFS) to Medicare Advantage in recent years have contributed to Medicare Advantage enrollment growth, a study published in Health Affairs found.
The share of Medicare beneficiaries in Medicare Advantage has increased from 19 percent in 2007 to 50 percent in January 2023. Understanding the source of this growth can help project where Medicare Advantage enrollment is headed.
Researchers used the CMS Medicare Enrollment Database and the Risk Adjustment Processing System to assess how many beneficiaries switched from Medicare FFS to Medicare Advantage and vice versa between 2006 and 2022.
During the study period, Medicare Advantage enrollment grew from 6.3 million to 30.3 million beneficiaries. Between 61 percent and 90 percent of this increase was attributed to people switching from FFS to Medicare Advantage. Switching contributed more to enrollment growth from 2020 to 2022 compared to the previous ten years.
Between 2006 and 2008, rates of switching from FFS to Medicare Advantage and from Medicare Advantage to FFS were similar. However, switching rates from FFS to Medicare Advantage began growing in 2010. By 2021, the switching rate from FFS to Medicare Advantage was 6.5 times higher than the switching rate from Medicare Advantage to FFS.
Between December 2021 and December 2022, the average switching rate from FFS to Medicare Advantage was 7.4 percent, while the average switching rate from Medicare Advantage to FFS was 1.2 percent.
Switching rates varied by population. For example, the switching rate from FFS to Medicare Advantage was highest for Black beneficiaries (15.6 percent) and Hispanic beneficiaries (15.0 percent), while White beneficiaries had the lowest switching rate (6.4 percent).
Disabled beneficiaries also had higher switching rates from FFS to Medicare Advantage (12.4 percent) compared to those aged 65 or older (6.1 percent). The rate of switching from FFS to Medicare Advantage for partial (18.6 percent) and full dual eligibles (14.0 percent) was significantly higher than the 7.4 percent average, the study found.
Women had higher odds than men of switching from Medicare FFS to Medicare Advantage but lower odds of switching from Medicare Advantage to FFS.
Similarly, Hispanic beneficiaries had the highest odds of switching from FFS to Medicare Advantage among all racial and ethnic groups but lower odds of switching the other direction than White beneficiaries. Black and Asian beneficiaries had higher odds of switching in both directions than White beneficiaries.
Healthier beneficiaries with no Hierarchical Condition Categories (HCC) diagnostic codes and those younger than 75 had higher odds of switching from FFS to Medicare Advantage.
Beneficiaries living in urban areas had higher odds of switching from FFS to Medicare Advantage but lower odds of switching the other direction compared to those in rural areas.
Overall, most switching between Medicare Advantage and Medicare FFS in 2022 occurred in January or February, when Medicare’s annual open enrollment period falls. These findings have implications for risk scores for new Medicare Advantage beneficiaries.
“If a beneficiary switches into MA in January, their risk score can be calculated using diagnoses from the previous year,” researchers wrote. “However, if a beneficiary switches later in the year, it is unclear how to define their base year.”
As Medicare Advantage enrollment rises, additional research published in JAMA Health Forum found that switching rates contributed to this growth. The study looked specifically at 2020 and revealed that the FFS to Medicare Advantage switching rate (6.1 percent) was almost four times higher than the Medicare Advantage to FFS switching rate (1.6 percent).
