Medicare Advantage
Usage
Although the number of people using public Part C of Medicare has grown dramatically from almost zero since 1998 and is projected to grow dramatically, there are four groups in particular that tend to stick with Medicare Parts A and/or B only and then add a private arrangement. First, it is increasingly common for people to continue to work after joining Medicare at age 65, and they use both Medicare Parts A and/or B (often just Part A) and employer sponsored insurance, and delay deciding between FFS Medicare and capitated-fee Medicare until the employer sponsored insurance is no longer available. Second, many retired people -- particularly people over age 75 or former government employees -- receive group insurance as a benefit of their former employment and these group policies tend not to be Part C plans (although that is changing). Third, people who live in two different geographical areas of the country at different times of the year (mostly so-called snowbirds) find it difficult to live with the geographic restrictions of most public Part C plans. Fourth, sicker people and people with higher medical expenditures are more likely to switch from Medicare Advantage plans to Medicare Parts A and B only, a statistic primarily driven by people on Medicaid in custodial care at nursing homes; people on both Medicare and Medicaid no longer have need of any Medicare supplement, either a public Part C plan or a private Medigap or group retirement plan. The Part C risk adjusted payments to Medicare Advantage plans are designed to limit this churn between types of Medicare (managed vs. FFS), but it is unclear how effective that equalization program is.
Medicare Advantage-26