50 things to know about Medicare Advantage

Before 2006, Medicare Advantage in its current form didn't exist. Now, the public-private program has more enrollees than traditional Medicare — how did it get here?

Medicare Advantage basics

  1. Medicare is a federal insurance program that started in 1965 to primarily provide health coverage to Americans 65 and older. 

  2. Medicare Advantage is a federally-approved plan from a private insurance company that provides more coverage than traditional Medicare. 

  3. In 2024, more than 33 million people are enrolled in a Medicare Advantage plan, according to February CMS data.

  4. Medicare is divided into four parts:
    A: Hospital insurance (hospital, skilled nursing, home health and hospice services)
    B: Medical insurance (outpatient services, physician visits, preventive screenings)
    C: Medicare Advantage
    D: Prescription drug insurance

  5. The Centers for Medicare and Medicaid Services (CMS) oversees all Medicare plans. In 1997, Part C (MA) was created, and Part D was introduced in 2006.

  6. Traditional Medicare includes Parts A and B, though Part B is optional. MA plans cover Parts A, B and D benefits. 

  7. When Congress created MA, it was initially called Medicare+Choice. In 2003, most Medicare+Choice plans were rebranded as Medicare Advantage.

  8. Supplemental Medicare, or Medigap, are plans that can be purchased from commercial payers by traditional enrollees to cover more services.

  9. Part C (MA) operates under a capitated fee, or when MA insurers are paid a set amount per beneficiary, and then pay for their health expenses. Traditional Medicare is fee-for-service, where providers are paid per service delivered.

  10. If a provider accepts Medicare, enrollees are able to receive care there. MA members are typically confined to a select network of providers for non-emergency care, but coverage must meet or exceed traditional Medicare standards.

Terminology: Words and phrases associated with MA

  1. Preferred Provider Organization (PPO): An MA plan with a large provider network that members pay less to use. Out-of-network providers can provide covered services for a higher cost, and emergency care is always covered. PPOs make up 42 percent of MA offerings in 2024.

  2. Health Maintenance Organization (HMO): An MA plan where care is only covered with in-network providers, except for emergency care. HMOs account for 56 percent of MA offerings in 2024.

  3. HMO-Point-of-Service (HMO-POS): HMO plans that allow some out-of-network services for a higher copayment.

  4. Dual-Eligible Special Needs Plans (D-SNP): Special MA plans that provide coverage to beneficiaries eligible for both Medicare and Medicaid.

  5. Private Fee-for-Service (PFFS): A fee-for-service MA plan that pays set amounts for care. Most PFFS plans have provider networks that charge less. They must cover out-of-network care, but usually at a higher cost – these make up less than 1 percent of plans.

  6. Accountable Care Organization (ACO): A group of providers who join together to provide high-quality care to Medicare patients. ACO models are overseen by CMS, and several types now exist.

  7. Prior authorization: Permission needed from the insurer for coverage, often for specialists or out-of-network care. Part D plans usually require PA for specialty drugs, but the process is plan specific.

  8. Star ratings: An annual performance rating from CMS ranging from 1 to 5 stars, with 5 being the highest. Plans with four or more stars receive monetary bonuses that then must be used to improve benefits.

Medicare Advantage today

  1. MA makes up more than half of all Medicare enrollment in 2024. Under current growth, the program will hit 60% by 2030.

  2. 3,959 MA plans are available nationwide in 2024, down 1% from the previous year.

  3. The average beneficiary has 43 MA plans to choose from in 2024.

  4. In 2024, 31 MA and Part D plans earned a five star designation, a decline from 2023, when 57 plans earned the designation.

  5. The average star rating across all plans for 2024 is 4.04, down from 4.15 in 2023.

  6. The top five reasons enrollees chose MA plans over traditional in 2022:
    More benefits: 24 %
    Out-of-pocket limit: 20 %
    Recommended by trusted people: 15 %
    Offered by former employer: 11 %
    Maintain same insurer: 9 %

  7. The largest MA insurers in 2024:
    UnitedHealthcare: 9.5 million
    Humana: 5.9 million
    CVS Health/Aetna: 3.9 million
    Elevance Health: 2 million
    Kaiser Permanente: 1.9 million
    Centene: 1.2 million
    BCBS Michigan: 696,000

  8. The average monthly MA premium is projected to be $18.50 for 2024, up from $18 in 2023.

  9. Part D average premiums for 2024 are expected to be $48, up from $40 in 2023.

  10. The standard monthly premium for Part B enrollees is $174.70 for 2024, an increase of $9.80 from 2023.

  11. About 38% of MA members have annual incomes of less than $25,000, compared to 23% of original Medicare enrollees, according to an AHIP report published in January 2024.

  12. MA members spend $2,434 less on out-of-pocket costs and premiums compared to Medicare members, according to a 2023 report from the Better Medicare Alliance.

  13. Around 16% of MA enrollees switch insurance after one year of enrollment, an October 2022 study in the American Journal of Managed Care found. Nearly half switched insurers by their fifth year.

  14. Medicare Advantage enrollees have 70% lower hospital readmission rates than their counterparts in fee-for-service Medicare, a 2023 white paper from researchers at Boston-based Harvard Medical School and software firm Inovalon found.

  15. Medicare Advantage enrollees are more likely to report delays in care than their counterparts in traditional Medicare, according to a 2024 survey from the Commonwealth Fund. Among those with MA, 22% reported waiting to receive care because it needed prior authorization in the past year, compared to 13% with traditional Medicare.

  16. Seven out of 10 Medicare Advantage enrollees reported using at least one supplemental benefit in the past year. The most commonly used supplemental benefit was allowance for over-the-counter medications, followed by dental and vision benefits, according to the Commonwealth Fund.

  17. Fifty-two percent of the 14% of employers who offered retirement health benefits in 2023 did so through MA plans, up from 26% in 2017, according to a report from KFF.

  18. In 2024, 83% of Medicare Advantage plans offered telehealth, a decline from 2023, when 97% of plans offered these benefits.

  19. Percentage of MA plans offering extra benefits in 2024:
    Vision: 99%
    Hearing: 98%
    Fitness: 98%
    Dental: 97%
    Over the counter benefits: 85%
    Telehealth: 83%
    Remote access: 74%
    Meals: 72%
    Transportation: 36%
    Acupuncture: 34%
    Bathroom safety: 22%
    Part B rebate: 19%


  1. Alabama saw the biggest decline in MA offerings from 2023 to 2024, with 20 fewer plans. That was followed by Illinois (18) and Texas (16).

  2. Four million people living in rural areas are enrolled in MA in 2024.

  3. Seven in 10 metropolitan areas had "highly concentrated " Medicare Advantage markets in 2023, according to the AMA's annual "Competition in Health Insurance" report. In 90% of metropolitan areas, one payer has at least a 30% MA market share. In 31% of markets, one insurer had a share of 50% or more.

  4. Humana offers MA plans in 90% of U.S. counties in 2024, and UnitedHealthcare offers plans in 87%.

  5. Number of counties payers offering MA plans in 2024:
    *There are 3,143 counties

    Humana: 2,906
    UnitedHealthcare: 2,804
    BCBS affiliate: 2,604
    CVS Health/Aetna: 2,227
    Centene: 1,748
    Cigna: 603

  6. Counties with the most MA plans available:
    1. Summit County, Ohio: 87
    2. Butler County, Ohio: 84
    3. Medina County, Ohio: 83
    T-3: Hamilton County, Ohio: 83
    T-3: Stark County, Ohio: 83

  7. UnitedHealthcare has the most 5-star MA plans available in 2024.


  1. To date, nearly every major insurer has been accused of or settled allegations of MA fraud from the federal government. Payers have been accused of exploiting the program through elaborate coding schemes that make patients appear sicker on medical records than they actually are — thereby leading to higher payments from CMS. Insurers dispute these claims. MA overpayments to payers are estimated to have cost as much as $25 billion in 2020. 

  2. Some experts have said the issue stems from the flexibility of interpretation around current MA risk adjustment coding guidelines.

Recent policy moves

  1. A new CMS rule aiming to streamline Medicare Advantage and Part D prior authorizations took effect Jan. 1, 2024. It requires that coordinated care plan prior authorization policies may only be used to confirm the presence of diagnoses or other medical criteria and/or ensure that an item or service is medically necessary.

  2. CMS finalized a rule in January to streamline the prior authorization process and improve the electronic exchange of health information that it estimates will save $15 billion over 10 years. MA carriers will be required to include a specific reason when denying requests, publicly report certain prior authorization metrics and send decisions within 72 hours for urgent requests and seven calendar days for standard requests.

  3. CMS is seeking input on improving transparency in the Medicare Advantage program. The agency issued a request for information Jan. 25, seeking public feedback on how data collection and transparency in the program can be improved.

  4. In 2023, CMS clarified in its final rule that MA plans must follow the two-midnight rule, or provide coverage for an inpatient admission when the admitting physician expects the patient to require hospital care for at least two midnights.

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