Majority of Medicare Beneficiaries Choose Medicare Advantage

While recent news has highlighted some challenges the Medicare Advantage sector is facing with regulatory changes and unprecedented spikes in medical costs, the latest data from the Centers for Medicare and Medicaid Services (CMS) is a clear indication that consumer interest in the Medicare Advantage program remains strong. 

More than 32 million individuals chose Medicare Advantage for the 2024 plan year – that’s more than half of all Medicare-eligible seniors and those with disabilities. 

The number of individuals choosing Medicare Advantage has doubled since 2010, when it was about 25% of the eligible population. As of January 2024, it’s up to 54%, and that number is expected to continue to grow. The Kaiser Family Foundation anticipates there will be about 70 million Medicare-eligible Americans by 2030 and about 60% of them will elect a Medicare Advantage plan.

So why is Medicare Advantage such a popular choice for eligible beneficiaries? The answer is simple – it delivers affordable, accountable, high-quality health care that is centered around their personal wants and needs. 

For those who may not be familiar with some of the differences between Medicare Advantage and fee-for-service Medicare, here are the key points I think are most valuable to understand.

Medicare Advantage provides better health outcomes.
Medicare Advantage organizations work closely with primary care provider organizations to focus on patient-centered care. The data is reviewed regularly and has demonstrated that Medicare Advantage beneficiaries have better health outcomes when compared to fee-for-service beneficiaries. A big reason for this difference is that Medicare Advantage enrollees have greater access to and see their primary care doctor more often, particularly individuals in value-based care arrangements.

Of note, Medicare Advantage enrollees have a 43% lower rate of avoidable hospitalizations and 21% higher rate of seeing a physician within 14 days of discharge when compared to fee-for-service Medicare beneficiaries. Higher rates of both annual wellness visits and preventive service use play a key role in these impressive outcomes.

A recent study, comparing the care provided to both Medicare Advantage and fee-for-service Medicare beneficiaries, showed that Medicare Advantage offered a higher quality of care. Using performance results from 2019 for Healthcare Effectiveness Data and Information (HEDIS) measures that focused on preventive and chronic disease care, the results indicated that Medicare Advantage outperformed fee-for-service Medicare in 10 of the 11 measures studied. 

Medicare Advantage offers affordable health care.
Even with additional benefits not covered by fee-for-service Medicare – which may include dental, vision and hearing coverage, prescription drug coverage, health and wellness classes and more – Medicare Advantage also provides an average cost savings of $2,400 per year per member. This is incredibly important, as more than half of Medicare Advantage enrollees live on less than $25,000 per year. Rides to the doctor, access to healthy foods, and coordinated care for individuals with chronic illnesses can play a significant role in eliminating barriers to healthy living. 

The average monthly premium for Medicare Advantage plans is $18. In fact, about 73% of Medicare Advantage enrollees had a $0 monthly premium in 2023 for plans that included prescription drug coverage. The financial protection that comes with Medicare Advantage plans’ annual maximum out-of-pocket limits also provides beneficiaries with predictability. 

Medicare Advantage serves a diverse population.
Medicare Advantage serves a more diverse population. In fact, Black, Latino and Asian beneficiaries are more likely to choose Medicare Advantage – 27% compared to the 17% enrolled in fee-for-service Medicare. More importantly, Black and Latino enrollees in Medicare Advantage are more likely to report having a usual source of care, which plays a critical role in increasing preventive care and improving health outcomes long-term. 

Medicare Advantage is also becoming more popular in rural areas as access to more plan options continues to increase. About 40% of beneficiaries living in rural areas are choosing Medicare Advantage. This is close to four times the share in 2010.

More than 10,000 Americans from all walks of life are turning 65 every single day. Whether they choose a Medicare Advantage plan or fee-for-service Medicare, it is important for us to ensure they are aware of the health care options available to them and can make an informed decision about their personal care.