How Medicare Advantage Enrollment Has Grown, Diversified in 10 Years

August 23, 2022 - Medicare Advantage enrollment has grown in the last decade largely due to an influx of Black, Hispanic, and low-income beneficiaries, a research letter published in the JAMA Health Forum found.

Before 2011, Medicare Advantage health plans absorbed a greater share of Medicare enrollment because traditional Medicare enrollees were transitioning to Medicare Advantage plans. From 2011 to 2019, Medicare Advantage enrollment continued to increase but the source changed.

The researchers used the Master Beneficiary Summary File from 2011 to 2019 to inform their study of the source of Medicare Advantage enrollment during that timeframe. These files provided over 524.4 million person-years.

Medicare Advantage still drew enrollees from traditional Medicare from 2012 to 2019, with the share of those who came from Medicare Advantage growing from 65.9 percent to 71.1 percent.

The number of enrollees that were new to Medicare who chose Medicare Advantage coverage also grew. A little over 18 percent of enrollees who did not have Medicare coverage previously transitioned into Medicare Advantage in 2012. But by 2019, that share had swelled to 24.7 percent.

Beneficiaries who switched to Medicare Advantage from traditional Medicare tended to be older. Fewer of them identified as Hispanic individuals but more of them identified as Black individuals. Additionally, they were more likely to be dually eligible and more likely to have a disability. Finally, they were more likely to die within two years of enrolling in Medicare Advantage.

“Our study is limited in that it was not designed to examine these mechanisms,” the researchers acknowledged. “As MA continues to grow, understanding the reasons for switching from TM to MA will become more important.”

Although the study did not explicitly explore the causes behind these enrollment shifts, the researchers cited three factors that might contribute to the growth and diversity of the Medicare Advantage population.

First, they noted that Medicare Advantage plans offer supplemental benefits and dental and vision coverage, which traditional Medicare does not cover. 

In 2022, more Medicare Advantage plans offered more supplemental benefits, including special supplemental benefits for the chronically ill (SSBCI), expanded supplemental benefits, and traditional supplemental benefits, according to a Better Medicare Alliance brief.

Second, Medicare Advantage plans offer lower out-of-pocket healthcare spending compared to traditional Medicare. 

On average, Medicare Advantage beneficiaries spend nearly $2,000 less than traditional Medicare beneficiaries in out-of-pocket healthcare spending and premium costs, according to Better Medicare Alliance’s 2022 State of Medicare Advantage report. 

Finally, Medicare Advantage might be more attractive due to the lower premiums.

In 2022, costs were particularly low since Medicare Advantage premiums dropped to the lowest level in 15 years, 10 percent lower than in 2021, the Better Medicare Alliance report shared.

The results corroborate separate studies that show that the Medicare Advantage population is growing and becoming more diverse.

In more than 100 congressional districts, Medicare Advantage coverage represents half or more of enrollment, according to Better Medicare Alliance research. Medicare Advantage coverage is particularly strong in Alabama, Michigan, and Florida.

As the Medicare Advantage population grows, it has also diversified, according to data from the Alliance of Community Health Plans (ACHP). 

Medicare Advantage plans grew 60 percent from 2013 to 2020. By 2020, Medicare Advantage plans served 25 million seniors, of which six out of ten were women. Also, more than half of all Hispanic American seniors (52 percent), 49 percent of African American seniors, and 35 percent of Asian Americans selected Medicare Advantage plans for their coverage.