Medicare Advantage (MA) payment reductions that were included in the Affordable Care Act were controversial, with some concerned that the cuts would lead to a decline in enrollment in MA; however, since the enactment of the health reform law, the number and share of Medicare beneficiaries enrolling in MA has only continued to climb, according to a report from the Kaiser Family Foundation.
Since 2010, enrollment in MA has increased by 50%, and from 2014 to 2015 enrollment grew by more than 1 million beneficiaries, or 7%. There are now a total of 16.8 million beneficiaries, or 31% of the overall Medicare population, enrolled in MA plans.
“From the perspective of the Medicare program overall, it is clear that Medicare Advantage has become an increasingly important way in which Medicare beneficiaries receive their benefits and all signs suggest that this will only increase in the future,” the authors of the report wrote.
South Dakota and North Dakota saw particularly large increases in enrollment (19% and 18%, respectively). However, MA penetration in these states is relatively low. For example, the average state penetration rate is 31%, with Minnesota have the highest rate at 53%, followed by Hawaii (46%) and Oregon (44%). In comparison, Alaska has the lowest penetration rate with less than 1% of Medicare enrollees are in MA plans, followed by Wyoming (2%).
“While Medicare Advantage premiums have remained relatively flat, out-of-pocket limits have been increasing over the past few years, providing less financial protection to Medicare enrollees with significant medical needs than they have in the past,” the authors wrote in the report.
Monthly premiums for MA prescription drug plans increased $3 per month to $38 (7% increase), but premiums do vary across plan types and states. The share of enrollees in MA prescription drug plans with $0 premiums declined from 56% to 48%. Premiums also vary greatly by state. While the national average is $38, average monthly premiums are highest in Massachusetts ($107), Michigan ($93), Minnesota ($130), and Pennsylvania ($94) and lowest in Florida ($6), Nevada ($13), Arizona ($15), Louisiana ($15), and Iowa ($15).
The average out-of-pocket spending limits has risen to $5041. All plans are required to limit these expenses to no more than $6700.