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August 17, 2022
David Burda
Consumerism Economics Outcomes
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Where Medicare Advantage Patients Come From

When people talk about Medicare Advantage, all they ever seem to want to talk about is the continuing explosion in enrollment. Well, that and how MA plans exaggerate how sick their enrollees are to weasel higher payment rates from CMS. But that’s another blog post.

Today we’re talking about enrollment, right? OK.

I looked up the latest enrollment data, and according to CMS, there were about 29.3 million Medicare beneficiaries enrolled in privately-run MA plans in August 2022. That’s up 8.4 percent from a little less than 27 million beneficiaries in August 2021. You can look up the data for yourself here.

The question is, where do all these new MA enrollees keep coming from? Now, one guess might be my neighborhood, where, at 62, I’m one of the youngest residents and only one of three who still cut their own grass.

Two researchers from Brown University decided not to be as glib and actually dug into the numbers and published their answer to the question in a research letter in JAMA Health Forum. You can download the research letter here.

Their answer is, ta da, Medicare!

The biggest source of new MA enrollees is traditional Medicare, or TM, with beneficiaries switching to MA from TM. Here are the numbers:

  • 1 percent of new MA enrollees came from TM in 2019 compared with 65.9 percent in 2012
  • 7 percent of newly eligible Medicare beneficiaries picked MA first in 2019 compared with 18.1 percent in 2013.

Compared with newly eligible Medicare beneficiaries who picked MA right out the gate, the ones who switched to MA from TM were more likely to be poor, disabled and die within two years of enrollment, according to the study.

The researchers speculated that beneficiaries with those characteristics were more likely than others to switch because MA plans offer more supplemental benefits for people with chronic conditions than TM, offer dental and vision coverage not available in TM and offer lower out-of-pocket costs than TM.

Yes, that’s right. The people in the pipeline who are fueling the growth in MA enrollment are the poor unhealthy elderly. They’re not the ones you see on TV riding bikes, fishing with their grandchildren or dining at fine restaurants.

That’s not the business model I would have expected. But then again, maybe it’s more lucrative to get paid inflated rates for people who are going to die soon because you keep the capitated rate for a full year as a lot of people drop off your membership rolls before the year is out? I don’t know.

But I’m sure some actuary does.

Thanks for reading.

About the Author

David Burda

David Burda began covering healthcare in 1983 and hasn’t stopped since. Dave writes this monthly column “Burda on Healthcare,” contributes weekly blog posts, manages our weekly newsletter 4sight Friday, and hosts our weekly Roundup podcast. Dave believes that healthcare is a business like any other business, and customers — patients — are king. If you do what’s right for patients, good business results will follow.

Dave’s personnel experiences with the healthcare system both as a patient and family caregiver have shaped his point of view. It’s also been shaped by covering the industry for 40 years as a reporter and editor. He worked at Modern Healthcare for 25 years, the last 11 as editor.

Prior to Modern Healthcare, he did stints at the American Medical Record Association (now AHIMA) and the American Hospital Association. After Modern Healthcare, he wrote a monthly column for Twin Cities Business explaining healthcare trends to a business audience, and he developed and executed content marketing plans for leading healthcare corporations as the editorial director for healthcare strategies at MSP Communications.

When he’s not reading and writing about healthcare, Dave spends his time riding the trails of DuPage County, IL, on his bike, tending his vegetable garden and daydreaming about being a lobster fisherman in Maine. He lives in Wheaton, IL, with his lovely wife of 40 years and his three children, none of whom want to be journalists or lobster fishermen.

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