Medicare Advantage enrollment has doubled in ten years and, in 2020, 16 percent more plans score four stars or more than did in 2015.
By Kelsey Waddill April 24, 2020
Medicare Advantage plans are continuing along a trend of burgeoning enrollment and rising quality, although costs for certain services may be more expensive than traditional Medicare, according to recent analysis from Kaiser Family Foundation (KFF).
Early in the coronavirus outbreak, CMS zeroed in on Medicare Advantage populations which, along with the rest of Medicare, promised to be among the most vulnerable populations in the US.
Kaiser Family Foundation’s analysis drew from CMS Medicare Advantage data to piece together the status of Medicare Advantage currently and the potential impacts of coronavirus as 2020 progresses.
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 resides 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. Over 70 percent will have access to hearing aid 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. 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 their 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.
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 a majority of Medicare Advantage patients were paying more than traditional Medicare patients in cost-sharing.
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.
Greg Says can confirm the increasing Medicare Advantage enrollment trend. It’s important however to consult with a licensed health insurance agent certified in Medicare Advantage products before deciding that Medicare Advantage is the right option for you. There are circumstances where Original Medicare plus a Medicare Supplement is a better choice depending on one’s recent medical history and maintenance medications.