Paragon Health Institute Icon White
Paragon Pic

Medicare Advantage Beats Expectations

PARAGON PIC Medicare Advantage Beats Expectations FOR RELEASE V1
Senior Policy Analyst at Paragon Health Institute
Joe Albanese is a Senior Policy Analyst with Paragon Health Institute. He comes to Paragon with over six years of federal and nonprofit public policy experience.
Senior Research Fellow at Paragon Health Institute
Drew Gonshorowski is a Senior Research Fellow at Paragon Health Institute. He brings a decade of experience conducting quantitative research and building models examining health policy and entitlement programs.

Medicare Advantage is now the most popular form of coverage in Medicare. MA enrollment has steadily increased and enrollment now far exceeds previous expectations of scorekeepers like the Congressional Budget Office (CBO). CBO’s 2013 projection forecasted that 30% of Medicare enrollees would be in MA in 2023—well below the 51% of enrollees choosing MA last year.

CBO’s 2008 projections took place soon after the program’s inception in 2006 when it replaced the previous Medicare+Choice program. Its 2013 projections took place after the enactment of the Affordable Care Act, which contained significant payment reductions to Medicare and MA. CBO believed the ACA changes would stall growth in MA. The Office of the Chief Actuary (OACT) at CMS expected that the ACA would lead MA enrollment to fall by half. However, MA’s strong growth continued, demonstrating its high value to seniors.

CBO only began to project that MA would cover a majority of beneficiaries in their March 2020 baseline estimates, and even then it only expected this to occur in 2030. Thus, even MA’s recent growth continues to defy expectations.

Policymakers try to evaluate the success of government programs with many types of metrics and data, but the decisions of individuals are among the best signal of what they value. While there are opportunities to improve MA and address concerns that overall MA spending is higher than FFS, MA has demonstrated better health outcomes, lower costs for basic Medicare benefits, and better value for beneficiaries (more benefits like vision, dental, and hearing coverage plus lower out-of-pocket costs).

Related Research