Medicare Advantage 2015 Data Spotlight: Overview of Plan Changes

In 2014, more than 16 million Medicare beneficiaries (30%) were enrolled in Medicare Advantage plans – private plans, such as HMOs or preferred provider organization (PPOs) that receive funds from the federal government (Medicare) to provide Medicare-covered benefits to enrollees. Under the current Medicare program, Medicare Advantage plans are offered as an alternative to the traditional Medicare fee-for-service program, and Medicare beneficiaries can enroll in a Medicare Advantage plan, change Medicare Advantage plans, or switch from Medicare Advantage to traditional Medicare during the annual open enrollment period. Federal payments to Medicare Advantage plans were gradually reduced by the Affordable Care Act of 2010 (ACA) with the goal of creating greater parity in payments between the traditional Medicare program and Medicare Advantage by 2017.