The Medicare Advantage program uses private health plans that contract with Medicare to provide Medicare and extra benefits to beneficiaries. The Kaiser Family Foundation always has lots of good data on the status of the program, which currently covers 26 million people, or around 40% of all beneficiaries. This latest set of reports from KFF gives you comprehensive information on many aspects of Medicare Advantage. (KFF Reports) The federal government spends $343 billion on Medicare Advantage payments. Beneficiaries have an amazing amount of choice, with an average of 33 plans to choose from, although typically several are offered by one insurer.
Some people have access to MA plans through work or another group, but most sign up as individuals. About 15% of all MA enrollees are in special needs plans which focus on people who are institutionalized or who have certain diseases. Enrollment varies geographically, Minnesota and Florida have over 50% MA enrollment, and a number of large states are over 40%, while a few rural states have low MA enrollment. UnitedHealth has the largest market share, with over 25% of all enrollees, followed by Humana with 18%. Other large insurers also have meaningful market share.
65% of MA members are in a plan with no premium. Only 5% are in a plan with a $100 a month or more premium. The zero dollar plans typically have very limited cost-sharing and benefits beyond traditional Medicare benefits. Premiums have declined in recent years, due to competition among plans and improved cost management, as well as good gamesmanship on risk-adjustment scoring, as the plans are paid more for members with more health needs. The plans are likely overpaid, but consumers generally benefit from this.
Medicare rates plans with a star system that supposedly measures quality and member satisfaction. Most enrollees are in a highly rated plan. The plans get bonus payments for high ratings. Employment or group-based plans tend to have the highest ratings and therefore get higher payments. Kaiser, Aetna, Human and UnitedHealth are the firms with the most people in highly-rated plans.