Richard Bajner, Eric Meinkow, Janet Munroe, and James R. Smith in Becker’s Hospital Review
The ongoing uncertainty around the Affordable Care Act’s (ACA) individual market has contributed to financial losses for commercial payers, and an exodus of some from that market.
In response to this and the growing baby boomer population, many private payers are expanding or shifting their focus to Medicare Advantage (MA).
The private version of the federal Medicare program, MA has served beneficiaries since the 1970s. Whereas the federal government pays for Medicare benefits under traditional Medicare coverage, MA plans are offered by private payers that contract with Medicare to provide MA benefit plans. Medicare pays the contracted payer to cover and administer benefits; in turn, plans negotiate with local and regional healthcare providers to deliver services to enrollees.
MA presents a win-win-win for Medicare enrollees, payers, and providers:
Thus, it’s no surprise that MA plans are increasing in popularity, with approximately one-third of all Medicare enrollees – about 20 million Americans – choosing these plans, up from 13% in 2004. Analyses project MA enrollment to exceed 50% market penetration by the end of 2025. And while the share of traditional Medicare benefit inpatient spending fell by one-third between 2006 and 2016, spending on MA plans doubled.