More seniors making the leap from traditional Medicare to Advantage plans
Medicare Advantage plans are growing in popularity, and many of the people who enroll in this coverage start with traditional Medicare plans.
This finding comes from a study by researchers at the Henry J. Kaiser Family Foundation, published by Health Affairs. The study looked at Medicare Advantage enrollment data from 2006 to 2011 and discovered 52 percent of new Medicare Advantage enrollees transitioned from a traditional Medicare plan. Additionally, the data showed this switch was more prevalent among those age 65-69. Meanwhile, 48 percent of new enrollees went straight to private Medicare offerings.
"Medicare Advantage plan benefits include dental and vision coverage."
The researchers had various conjectures on why seniors who switched were driving Medicare Advantage growth as well as why the transition was seen more often in the aforementioned age group, according to Kaiser Health News. Gretchen Jacobson, the study's lead author and associate director of the Kaiser Family Foundation's Program on Medicare Policy, said the rising appeal among younger retirees could be due to their good health, which makes it easier to be restricted to a certain network of health care providers, a key characteristic of most Medicare Advantage plans.
What are the pros of Medicare Advantage?
Private Medicare coverage comes with many perks that are not available with traditional coverage. These benefits can include dental and vision coverage as well as gym memberships. Plus, the setup is familiar for some retirees.
"The prevailing thought was that baby boomers were enrolling in Medicare Advantage plans at a higher rate because they were more familiar with managed care, and it was what they experienced in employer plans," Jacobson explained.
Additionally, Forbes reported Medicare Advantage plans typically take care of gaps in coverage that would come with traditional plans, and for many seniors, the networks are more of an attractive feature than restrictive element. This is particularly true of of enrollees who are dually eligible for Medicare and Medicaid, thereby obtaining additional subsidies that lower out-of-pocket expenses.
How will Medicare Advantage fare in 2015?
Forbes said the growing popularity of Medicare Advantage plans was evident in 2015 open enrollment data. By Jan. 23, the enrollment figure was already near 17 million.
Furthermore, analysts don't expect health care reforms to slow this growth, Kaiser Health News reported. With reduced funding for the program, the prevailing prediction is that there will be fewer benefits and more out-of-pocket costs for enrollees.
"Given that enrollment has continued to grow and there haven't been major changes in premiums or availability of plans, many project that growth will continue," Jacobson said.
Data from the Kaiser Family Foundation showed Medicare Advantage enrollment shot up between 2004 and 2014, jumping from 13 percent of all enrollees to 30 percent. This was an increase from 5.3 million to 15.7 million. With the aforementioned perks, it's no surprise the recent figure cited by Forbes already surpasses the total for 2014, and the already rising number indicates how popular Medicare Advantage is despite an expected rise in costs.