Less Than One-Third of New Medicare Beneficiaries Enroll in Medicare Advantage

The Kaiser Family Foundation recently released new findings about what coverage new Medicare enrollees choose. This information is important in understanding what beneficiaries want from their coverage, and may shed insight into whether beneficiaries are availing themselves of available options. Some thought that the aging Baby Boom generation, having had more experience with HMOs and PPOs during their working years, would select the private plans over traditional Medicare at relatively high rates.  In fact, the share of new beneficiaries choosing Medicare Advantage has increased only modestly over the years.  

When you first become eligible for Medicare, either upon turning 65 or because you have a disability that makes you eligible, you have a decision to make: will you stay in the default program, referred to as original or traditional Medicare, or will you choose a Medicare Advantage (MA) plan? There is no one right choice. The best choice for an individual depends on their personal circumstances and their preferences. If  you have a trusted adviser, such as one the professionals at Harding & Harding and Associates, you may have someone that can assist you in navigating the array of choices and decisions. Our office highly recommends Harding & Harding, particularly for those new clients seeking to implement Aging in Place Planning.  

Often, your decision will be based on practicalities rather than financial considerations.  If you have a trusted medical provider, for example, you may not want to join an MA plan that might require you to change doctors.  If you are more concerned with financial objectives, you may prefer MA’s out-of-pocket maximum, especially if you expect your health care costs to be high.  The decision is not a simple decision, and recent changes may make the decision even more difficult than it has been in the past.  Readers of this blog are aware that recent changes to Medicare incentive and encourage long-term care planning, and Aging in Place benefits to be added to new MA plans.   

According to the report, around 22% of new enrollees chose Medicare Advantage in 2011. This number increased to around 29% in 2016, the most recent year of the report. These numbers are nationwide, but the rate of enrollment varies considerably depending on the enrollee’s geographic location, age, and whether they are eligible for Medicaid in addition to Medicare.

Importantly, when people with high needs enter the Medicare program, they are less likely to choose MA. This could mean that these new enrollees want to avoid potential issues with narrow provider networks and are not drawn to MA benefits like gym memberships, preventive care, and the like, that may be tailored to enrollees who are in excellent health.  Time will tell how individuals view the recent additions to MA plans.

The reasons newcomers choose to remain in traditional Medicare or switch to MA are important. But whatever the reason, it is clear that the majority of people with Medicare prefer the original program.