Medicare Advantage Enrollment, Quality Continue Upward Trend

Medicare Advantage Enrollment, Penetration Is Higher Than Ever

As of April 22, 2020, 36 percent of Medicare beneficiaries are in a Medicare Advantage plan. This comes after a 9 percent increase between 2019 and 2020.

This enrollment is distributed unevenly across the country, with nine states holding over 40 percent of Medicare Advantage beneficiaries.

Around ten percent of the Medicare population reside in metropolitan counties, consistent with recent trends.

There are three Medicare Advantage titans that are responsible for nearly 60 percent of all Medicare Advantage beneficiaries. UnitedHealthcare holds 26 percent of the Medicare Advantage population, Humana has 18 percent, and Blue Cross Blue Shield has 15 percent of Medicare Advantage enrollees.

However, the field is seeing some significant shifts as Humana’s plans begin to catch up with UnitedHealthcare’s and CVS Health’s 2018 purchase of Aetna spurred major growth extending into 2019 and 2020, as expected.

This growth is expected to continue, with Medicare Advantage plans accounting for over 50 percent of Medicare beneficiaries by 2030, KFF said, citing Congressional Budget Office predictions. Other sources, such as LEK Consulting’s estimates, have projected a 70 percent increase in Medicare Advantage enrollment between 2030 and 2040, although enrollment for dual eligible members lags.

Medicare Advantage Benefits and Quality Are Evolving

In 2020, Medicare Advantage enrollees will have more benefits than traditional Medicare enrollees. CMS expanded Medicare Advantage benefits to include more supplemental benefits.

Nearly three-quarters of Medicare Advantage beneficiaries, for example, will have a dental benefit and the same percentage have a fitness benefit, according to the KFF researchers. Over 70 percent will have access to hearing aids benefits and 61 percent will have access to over the counter medication? benefits.

Perhaps most relevant given the status of coronavirus, 77 percent will have a telehealth benefit. With many states imposing shelter-in-place orders and authorities enjoining residents to stay at home to prevent the spread of coronavirus, health plans have been relying heavily on telehealth to connect patients to care.

Most Medicare Advantage beneficiaries are now enrolled in a plan that scores well on Medicare Advantage Star Ratings. In 2015, 62 percent of Medicare Advantage beneficiaries were in plans that got four stars or higher, but in 2020, 78 percent will be in such plans.

Results Are Mixed on Medicare Advantage Out-of-Pocket Savings

Medicare Advantage has long been touted as a cost-saving alternative to traditional Medicare, with recent statistics showing that Medicare Advantage costs 40 percent less than fee-for-service Medicare.

In many ways this remains true for 2020. Medicare Advantage beneficiaries still tend to see much lower out-of-pocket healthcare spending than Medicare beneficiaries.

For example, 60 percent have no premium aside from Part B, the KFF report found. For those who do, the average premium is $25 per month. This continues a downward trend in Medicare Advantage premium rates starting in 2015.

For coronavirus, Medicare Advantage plans received flexibility and guidance from CMS to cover both testing and treatment costs early on in the crisis. Medicare will cover hospitalizations, including if a patient is diagnosed with coronavirus and must extend her stay to quarantine in a hospital setting.

In contrast, according to a separate KFF report from mid-April 2020, beneficiaries on traditional Medicare are still responsible for the deductible for such a stay and susceptible to out-of-pocket costs as a result. This could mean up to $1,408 in out-of-pocket costs for a Medicare beneficiary with $20,000 per year.

However, the evidence points to one area in which many Medicare Advantage patients do not necessarily see greater savings than their Medicare counterparts: inpatient hospital stays.

While nearly all Medicare Advantage patients saved money on three-day hospital stays, anything over a five-day stay meant half or a majority of Medicare Advantage patients were paying more than traditional Medicare patients in cost-sharing, researchers at KFF discovered.

Furthermore, Medicare Advantage reimbursement may be dented slightly as a side-effect of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the KFF researchers predicted. Because the funds put aside for reimbursement are tied to fee-for-service payment and Medicare Advantage plans tend to avoid fee-for-service payment models, states that have a high percentage of Medicare Advantage enrollees may see lower reimbursement.

As payers evaluate their strategies for what is turning out to be a year full of uncertainties, the KFF report indicates that their Medicare Advantage plans remains on a trajectory to enhance and expand.