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Employer-Sponsored Plans Cover 4.1 Million Medicare Advantage Beneficiaries

The popularity of employer-sponsored Medicare Advantage group plans is on the rise, with a 12 percent increase in enrollment in 2019. What does this mean for beneficiaries?

November 14, 2018

The popularity of Medicare Advantage plans is on the rise, and employers are making more Medicare Advantage (MA) plan options available through work-provided coverage.

The number of available employer-sponsored group Medicare Advantage plans is set to increase by 12 percent in 2019, according to an analysis by Mark Farrah Associates.

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Individual plans continue to dominate the Medicare Advantage plan market, representing 17 million of the 21 million Medicare Advantage beneficiaries (81 percent). But Medicare Advantage Employer Group Waiver Plans (MA-EGWPs) have demonstrated significant growth in recent years as employers adapt company benefits to align with an aging workforce.

Since December of 2015, enrollment in employer-sponsored Medicare Advantage plans have increased by 125 percent. Approximately 443,000 beneficiaries will be added to the employer-sponsored MA pool in 2019.

Medicare Advantage popularity varies by state

The popularity of employer-sponsored Medicare Advantage plans varies greatly by state. In fact, 10 states account for nearly twice as many beneficiaries in such plans as all other states combined.

The ten states with the highest number of employer-sponsored Medicare Advantage plans (as of October 2018) are:

  1. California (586,815)
  2. Michigan (392,375)
  3. Texas (315,504)
  4. New York (263,331)
  5. Ohio (236,634)
  6. Pennsylvania (218,825)
  7. Illinois (200,304)
  8. North Carolina (177,884)
  9. Florida (162,344)
  10.  Georgia (160,804)

As of October, 2018, over 4 million Medicare Advantage beneficiaries are enrolled in employer-sponsored MA plan coverage. This accounts for close to 20 percent of all MA plan beneficiaries, and close to 6 percent of all Medicare beneficiaries in the U.S.

What’s behind the trend

The increasing popularity of employer-sponsored Medicare Advantage plans rests primarily on two intersecting factors.

First, America’s workforce is getting older. According to the Bureau of U.S. Labor Statistics (BLS), the segment of the workforce that is expected to increase the most through 2024 is those who are age 65 and up.

The number of workers age 65 to 74 is projected to increase by more than 4 percent, while the number of workers ages 75 and older is expected to increase by more than 6 percent. No other age group is expected to grow in population by more than 1 percent.

Second, the cost of health insurance continues to go up for employers and employees alike. In 2018, the average premium for an employer-sponsored family plan increased by 5 percent, and premiums for individual plans rose on average by 3 percent. Meanwhile, premiums for Medicare Advantage plans are set to decrease by 6 percent in 2019.    

Because more workers are age 65 and up (and therefore eligible for Medicare), and because Medicare Advantage plans can be a more affordable health insurance option, it’s no surprise that more employers are offering Medicare Advantage plans as a benefit to their qualified workers.

About Medicare Advantage plans

Medicare Advantage plans are an alternative way to receive Original Medicare benefits (Medicare Part A and Part B) combined into a single plan sold by a private insurance company.

Many Medicare Advantage plans may offer additional benefits not found in Original Medicare. These extra benefits commonly include prescription drugs, dental, hearing and vision, and the list of perks continues to grow every year.

Starting in 2019, meal delivery services, transportation to doctor’s appointments and air conditioner installation for asthma sufferers were just some of the things added to the list of approved benefits for Medicare Advantage plans.