Inside The Meteoric Rise Of Medicare Advantage

To receive Medicare benefits, eligible people select either traditional Medicare or Medicare Advantage (MA)-options that differ markedly in cost, benefits, financial arrangements, and who pays claims-with beneficiaries able to select their preferred option during annual open enrollment periods. In a striking change from earlier years, the majority of beneficiaries now enroll in MA, not traditional Medicare, and both the number and proportion of beneficiaries in traditional Medicare continue to decline. We trace Medicare's transformation from having four out of five beneficiaries in 2006 participate in traditional Medicare to a majority now selecting MA. After highlighting key developments in MA versus traditional Medicare, we summarize enrollment data that capture the significant growth in MA and report findings on upcoding, favorable selection, and flaws in the MA quality bonus program. We conclude by exploring the implications for Medicare of continuing MA growth and identifying reform options to rebalance traditional Medicare and MA.