Most new Medicare beneficiaries opt for fee-for-service over MA: study 

Medicare Advantage
A new study examines the uptake of Medicare Advantage plans among new Medicare beneficiaries. (Getty/designer491)

Though increasing numbers of baby boomers are aging into Medicare, relatively few are choosing Medicare Advantage (MA) plans as their entry point to the program, a new study shows. 

New data from the Kaiser Family Foundation shows that 29% of new Medicare enrollees chose an MA plan in 2016, a rate that’s slightly below the overall penetration rate for MA (31%). 

That figure has remained relatively flat over the past several years, the study shows. In 2011, 23% of newly eligible Medicare beneficiaries chose an MA plan. 

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“One line of thinking has been that the Baby Boomer Generation will enroll in Medicare Advantage plans over traditional Medicare at much higher rates than previous generations because they have had more experience with managed care in their working years,” the researchers wrote.

RELATED: 4 in 10 Medicare beneficiaries expected to be on Medicare Advantage plans by 2028 

MA enrollment has been expected to shoot up as the Medicare population grows significantly. The findings suggest the hype might have been a bit overstated, the researchers said. 

Interest in MA plans varied notably by geographic region, according to the study. For example, in Oregon, Minnesota and Puerto Rico, 40% of new beneficiaries selected MA over traditional Medicare in their first year. 

However, in Delaware, Maryland, Nebraska, Vermont, New Hampshire and the District of Columbia, fewer than 11% of new beneficiaries picked an MA plan in their first year. 

The divides were similar at the county level, the study found. In counties that house Atlantic City, New Jersey, and Baltimore, enrollment was below 11%, while the counties housing Pittsburgh and Miami saw more than half of new beneficiaries choose MA. 

RELATED: High needs of dual eligibles in MA highlight importance of alternative benefits, Avalere study says 

The study also found that people living in areas with greater numbers of Medicare beneficiaries overall are more likely to enroll in an MA plan. In urban counties where there were 100,000 or more Medicare beneficiaries, 35% of new enrollees chose MA over traditional Medicare. 

That number dropped to 23% in counties with just 5,000 to 10,000 overall Medicare beneficiaries. 

Though MA enrollment is projected to continue to grow at a steady rate—the Congressional Budget Office estimates that 47% of Medicare beneficiaries will be in an MA plan by 2029—the findings mean that it’s crucial to continue innovating traditional Medicare as well, the researchers said. 

“While Medicare Advantage enrollment among new beneficiaries is rising, these findings suggest that ongoing attention to traditional Medicare is needed to meet the needs of the lion’s share of the Medicare population,” the researchers wrote. 

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