Medicare Advantage will account for 57% of overall Medicare enrollment by 2036, up from 51% this year, according to a July report from the Congressional Budget Office.
Five things to know:
- MA enrollment growth is expected to continue over the decade but at a slower pace than the growth trend from about 30% to 50% between 2015 and 2024. CBO noted the slowed growth in 2025 and projected enrollment to slow even further over the next decade.
- MA is projected to account for a growing share of federal spending on Medicare Part A and Part B benefits, rising from 54% in 2026 to 61% in 2036, outpacing its enrollment share.
- Annual spending per MA enrollee is projected to run 7% higher on average than spending per fee-for-service enrollee with both Part A and Part B coverage. CBO projects that gap will widen over the next 10 years.
- CBO estimates that if a beneficiary switched from fee-for-service to MA, federal spending on that enrollee would rise roughly 15%. The agency attributed the increase primarily to coding intensity and favorable selection by insurers.
- Coding intensity pushes MA risk scores higher, but the report said that effect is partly offset by health differences between the two programs. Many studies find MA enrollees are healthier than fee-for-service enrollees, and to the degree that better health shows up as lower risk scores, Medicare pays MA plans less, thereby reducing per-enrollee spending. CMS applies a statutorily mandated 5.9% downward adjustment to MA risk scores, but CBO said most estimates show scores still run about 4% higher for MA enrollees than for comparable fee-for-service enrollees.
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