KFF, Published: Jan 30, 2024

For the first time in Medicare’s history, more than half of all eligible people with Medicare, or 30.8 million people in 2023, are enrolled in private Medicare Advantage plans. Below are 9 reasons why enrollment has been growing and why we can expect more growth in the years to come.

  1. People with Medicare are drawn to Medicare Advantage for the extra benefits. Medicare Advantage plans offer extra benefits, like reduced cost-sharing, dental coverage, gym memberships and debit cards for over-the-counter medical supplies that are not covered by traditional Medicare.
  2. People with Medicare are drawn to Medicare Advantage plans that are marketed as “zero premium” products. Like traditional Medicare beneficiaries, Medicare Advantage enrollees are required to pay the Medicare Part B premium, but unlike beneficiaries in traditional Medicare, they typically do not pay a separate premium for additional coverage or for Part D prescription drug premium because Medicare Advantage rebate dollars cover these costs.
  3. Premiums for Part D stand-alone prescription drug plans that supplement traditional Medicare are rising rapidly. On a related note, beneficiaries in traditional Medicare are seeing premiums for stand-alone prescription drug plans rising rapidly, which may lead some to switch to Medicare Advantage to lower monthly expenses.
  4. People with Medicare are attracted to the financial protection that comes with an annual out-of-pocket limit that Medicare Advantage plans are required to provide. In contrast, traditional Medicare, with about 30 million beneficiaries, does not have an out-of-pocket limit.
  5. Beyond financial benefits, people with Medicare are attracted to the simplicity and convenience of Medicare Advantage, which provides all coverage in one plan, obviating the need to obtain a Medicare Part D plan and a Medigap plan, as many traditional Medicare beneficiaries have.
  6. Insurers are marketing Medicare Advantage aggressively, perhaps because gross margins, which are an inexact proxy for profitability, are substantially higher for Medicare Advantage than individual (non-group) or the fully insured group (employer) market.
  7. A growing share of large employers are shifting their Medicare-age retirees into Medicare Advantage plans for both Medicare and supplemental benefits. KFF research has shown that employers are shifting their retirees to Medicare Advantage as a strategy to maintain benefits, simplify administration and lower their own costs.
  8. Medicare beneficiaries may be reluctant to switch from Medicare Advantage to traditional Medicare if they run the risk of being denied a Medigap policy due to a pre-existing condition.
  9. Beneficiaries may not be familiar with potential tradeoffs in choosing Medicare Advantage over traditional Medicare. For example, Medicare Advantage plans may have network restrictions that could prevent enrollees from being seen by certain doctors, hospitals and skilled nursing facilities.

If you have any questions about your coverage options, reach out to one of our team members or give our office a call at 330-633-7713. We’re always here to help and make sure you understand your plan.