Medicare Advantage 2016 Spotlight: Enrollment Market Update

Issue Brief
Publisher: Menlo Park, CA: The Henry J. Kaiser Family Foundation
May 11, 2016
Authors
Gretchen Jacobson, Giselle Casillas, Anthony Damico, Tricia Neuman, and Marsha Gold

Key Findings:

  • Medicare Advantage enrollment has increased in virtually all states over the past year. Almost one in three people on Medicare (31% or 17.6 million beneficiaries) is enrolled in a Medicare Advantage plan in 2016. The penetration rate exceeds 40 percent in 5 states.
  • Over 3 million enrollees (18%) are in a group plan in 2016.
  • UnitedHealthcare and Humana together account for 39 percent of enrollment in 2016; enrollment continues to be highly concentrated among a handful of firms, both nationally and in local markets. If Aetna acquired Humana with no divestitures in 2016, the combined firm would account for 25 percent of Medicare Advantage enrollees nationwide.
  • On average, premiums paid by enrollees were relatively constant between 2015 and 2016 ($37 per month in 2016 versus $38 per month in 2015), although premiums vary widely across states, counties, and plan types.
  • Medicare Advantage plans, unlike traditional Medicare, are required to provide an out-of-pocket limit (not to exceed $6,700) for services covered under Parts A and B. In 2016, the average enrollee had an out-of-pocket limit of $5,223—nearly $1,000 higher than it was in 2011 ($4,313). More than one-third of all enrollees in Medicare Advantage prescription drug plans in 2016 (37%) are in plans with limits at the maximum.

The number and share of Medicare beneficiaries enrolled in Medicare Advantage has steadily climbed over the past decade, and this trend in enrollment growth is continuing in 2016. The growth in enrollment has occurred despite reductions in payments to plans enacted by the Affordable Care Act of 2010 (ACA). As of 2016, the payment reductions have been fully phased-in in 78 percent of counties, accounting for 70 percent of beneficiaries and 68 percent of Medicare Advantage enrollees.

This Data Spotlight reviews national and state-level Medicare Advantage enrollment trends as of March 2016 and examines variations in enrollment by plan type and firm. It analyzes the most recent data on premiums, out-of-pocket limits, Part D cost sharing, and plans’ quality ratings.