Since 2006, the role of Medicare Advantage, the private plan alternative to traditional Medicare, has steadily grown. In 2022, more than 28 million people are enrolled in a Medicare Advantage plan, accounting for nearly half or 48 percent of the eligible Medicare population, and $427 billion (or 55%) of total federal Medicare spending (net of premiums). The average Medicare beneficiary in 2022 has access to 39 Medicare Advantage plans, the largest number of options available in more than a decade.
To better understand trends in the growth of the program, this brief provides current information about Medicare Advantage enrollment, including the types of plans in which Medicare beneficiaries are enrolled, and how enrollment varies across geographic areas. A second, companion analysis describes Medicare Advantage premiums, out-of-pocket limits, cost sharing, extra benefits offered, prior authorization requirements, and star ratings in 2022.
In 2022, nearly half of (48%) eligible Medicare beneficiaries – 28.4 million people out of 58.6 million Medicare beneficiaries overall – are enrolled in Medicare Advantage plans. Medicare Advantage enrollment as a share of the eligible Medicare population has more than doubled from 2007 to 2022 (19% to 48%). KFF now calculates the share of eligible Medicare beneficiaries enrolled in Medicare Advantage, meaning they must have both Part A and B coverage. This affects both 2022 data as well as trends over time. The share would be somewhat smaller if based on the total Medicare population that includes 5.7 million beneficiaries with Part A only or Part B only who are not generally eligible to enroll in a Medicare Advantage plan.
Between 2021 and 2022, total Medicare Advantage enrollment grew by about 2.2 million beneficiaries, or 8 percent – a slightly slower growth rate than the prior year (10%). The Congressional Budget Office projects that the share of all Medicare beneficiaries enrolled in Medicare Advantage plans will rise to 61 percent by 2032.
Two-thirds (66%) of Medicare Advantage enrollees, or 18.7 million people, are in plans generally available to all beneficiaries for individual enrollment. That is an increase of 1.3 million enrollees compared to 2021. Individual plans have accounted for approximately the same share of total Medicare Advantage enrollment since 2018.
Nearly 5.1 million Medicare Advantage enrollees are in a group plan offered to retirees by an employer or union. While this is roughly the same share of enrollment since 2010 (18%), the actual number has increased from 1.8 million in 2010 to 5.1 million in 2022. With a group plan, an employer or union contracts with an insurer and Medicare pays the insurer a fixed amount per enrollee to provide benefits covered by Medicare. For example, some states, such as Illinois and Pennsylvania, provide health insurance benefits to their Medicare-eligible retirees exclusively through Medicare Advantage plans. As with other Medicare Advantage plans, employer and union group plans often provide additional benefits and/or lower cost sharing than traditional Medicare and are eligible for bonus payments. The employer or union (and sometimes the retiree) may also pay an additional premium for these supplemental benefits. Group enrollees comprise a disproportionately large share of Medicare Advantage enrollees in six states: Alaska (99%), Michigan (42%), Maryland (36%), West Virginia (35%), New Jersey (35%), and Illinois (30%).
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