Medicare Advantage churn low, but those who do switch cite cost, quality concerns

Health insurance, pen and stethoscope

On average, just 1 in 10 Medicare Advantage enrollees switch their health plan each year, but when they do so it's because of cost and quality concerns.

According to an analysis by the Kaiser Family Foundation, 11 percent of Medicare Advantage (MA) enrollees voluntarily switched to a different MA plan between 2013 and 2014. Between 2007 and 2014, the average number of enrollees who switched MA plans held steady at 10 percent.

MA turnover was lower than the average rates in Medicare Prescription Drug Plans (13 percent) and well below Affordable Care Act marketplace plans (43 percent). Previous analysis indicates only one-third of marketplace enrollees selected the same plans between 2015 and 2016.

However, cost and quality were the primary drivers behind MA churn, according to KFF’s analysis. The foundation also found that:

  • Twenty-nine percent of enrollees who switched plans were facing a premium increase of $40 or more, and 24 percent expected an increase between $30-$40
  • Those who switched plans saved more than $17 per month on average and paid less in out-of-pocket expenses
  • Fourteen percent of enrollees in 2 or 2.5 star plans elected to switch, compared to 9 percent in 4 or 4.5 star plans
  • However, those who switched plans ended up with just a slightly higher star rating (0.11 increase on average)

Previous studies show that Medicare enrollees generally value quality over price, and MA beneficiaries often gravitate toward plans with a higher star rating. KFF researchers noted the risk of losing MA enrollees is low for health plans as long as insurers don’t drastically increase premiums. Experts have said that value, provider options and experience are critical to retaining MA enrollees.