Medicare Advantage poised to become biggest coverage provider for beneficiaries

Many plans offer benefits not available under traditional Medicare, but nearly all require prior authorizations for some drugs and services

Medicare Advantage (MA) will soon overtake traditional Medicare as the way most eligible beneficiaries obtain coverage, according to a new analysis of Medicare enrollment.

The analysis by the Kaiser Family Foundation finds that MA enrollment could surpass 50% in 2023. Current MA enrollment is about 48% of the eligible Medicare population of 58.6 million, up from 46% in 2021. It cites data from the Congressional Budget Office forecasting that MA plans will cover 61% of eligible enrollees by 2032.

The three-part study found that 70% of MA enrollees pay no premium beyond part B for prescription drug coverage. In addition, nearly all those who get coverage through plans open to general enrollment have access to some benefits, such as eye and hearing exams and glasses and hearing aids that aren’t covered under traditional Medicare.

On the other hand, 99% of MA enrollees are in plans that require prior authorizations for some services, including physician-administered prescription drugs, and inpatient hospital and skilled nursing stays.

Among the study’s other findings:

  • Two-thirds of those enrolled in MA plans are in plans generally available to everyone for individual enrollment, with the rest enrolled in employer or union-sponsored group plans or special needs plans
  • Enrollment in MA plans is heavily concentrated among a handful of commercial insurance companies, with UnitedHealthcare and Humana accounting for 46% of enrollees. In nearly a third of counties, UnitedHealthcare and Humana account for at least 75% of MA enrollment.
  • Since 2010 UnitedHealthcare has seen the biggest jump in MA enrollment, going from 20% of all enrollees to 28% in 2022. Between 2021 and 2022 the company added more than 749,000 beneficiaries, the sixth consecutive year in which its MA enrollment increased the most of any company. since 2010, increasing from 20%
  • State-level percentages of Medicare beneficiaries in MA programs range from under 20% in four states (Alaska, North and South Dakota and Wyoming) to 93%, in Puerto Rico.
  • Government spending on MA quality bonus payments has increased every year since 2015 and is expected to reach at least $10 billion in 2022.