As more baby boomers retire, enrollment in both traditional Medicare and Medicare Advantage is expected to increase. While Medicare Advantage can offer lower out-of-pocket costs and additional benefits like dental and vision coverage, it may limit patients in terms of providers and treatment options. Some states, such as Alaska, Colorado, Georgia, Hawaii, Iowa, Louisiana, and Michigan, have seen a decline in Medicare Advantage enrollment. Traditional fee-for-service Medicare is still the dominant coverage option in many parts of the country, particularly in rural areas.
The extent of the drop in Medicare Advantage enrollment varies across states, with some states having low to mid-50 percent enrollment rates while others have nearly 60 percent enrolled. Factors contributing to the preference for traditional Medicare over Medicare Advantage include demographics, insurance markets, and personal preferences. As more employers shift retirees to private plans, the growth of Medicare Advantage plans is expected to continue outpacing traditional Medicare, but this split could be based on geographic lines.
Understanding the differences between traditional Medicare and Medicare Advantage is crucial for seniors in choosing a health plan that suits them best. Traditional Medicare offers unlimited choice of providers, while Medicare Advantage often has lower out-of-pocket costs and additional benefits. Factors contributing to the decline in Medicare and Medicare Advantage enrollment include declining senior populations in some states, errors made by states leading to removal of seniors from coverage, and cuts to Medicare Advantage plans by major insurers.
Texas experienced a situation where 350 seniors were removed from the state’s Medicare Savings Program due to a state error, resulting in seniors losing up to $200 in monthly Social Security checks. Major health insurer Humana announced plans to cut its Medicare Advantage plans by 2025, potentially affecting about 6 million Americans. Other insurers are also making changes to their Medicare coverage, such as Mutual of Omaha stopping standalone Medicare prescription drug plans, and UnitedHealth considering adjustments due to lower Medicare Advantage revenues.
Overall, Medicare and Medicare Advantage enrollment is expected to increase as more baby boomers enter the system. However, the pace and shape of this change will vary across the country based on market conditions and personal preferences. While Medicare Advantage continues to gain popularity in some areas, traditional Medicare remains the dominant coverage option in many parts of the country. As insurers make changes to their Medicare Advantage plans, it is important for seniors to understand their options and choose a plan that best meets their needs.
