
Funds for Medicare Advantage Part C benefits are drawn from the Hospital Insurance (HI) Trust Fund (accounting for 48% of total spending on Medicare Part A benefits in 2023). Funds for Part B and Part D (outpatient prescription drugs) benefits are drawn from the Supplementary Medical Insurance (SMI) trust fund. Beneficiaries enrolled in Medicare Advantage plans pay the Part B premium (same as traditional Medicare) and may pay an additional premium for their plan.
In addition, 17% of payments made to Part C plans are for extra-benefits like Part D premiums, Part B copays, coinsurance, dental, hearing and vision benefits, and insurance company costs and profit. These subsidies come from SMI Trust Fund general revenue.
Rise in Medicare Advantage Enrollment:
With enrollment in Medicare Advantage plans projected to increase to 33.8 million by the end of 2024 the payments to private Medicare Advantage plans account for a growing share of total Medicare spending under Part A and Part B. Medicare Advantage enrollment is projected to grow to 62% of the total Medicare enrollment by 2033.
Increases in Medicare Advantage Spending.
According to current projections, payments to Medicare Advantage plans are projected to rise as a share of total Part A spending from 48% in 2023 to 54% in 2033, a shift that could impact the HI trust fund solvency. Medicare Advantage is also projected to rise as a share of total Part B spending, from 55% in 2023 to 65% in 2033, which could impact both beneficiary premiums and general revenue spending. In 2024, MedPAC estimates that the Medicare program will spend 22% more per Medicare Advantage enrollee than for similar beneficiaries in traditional Medicare – an additional $83 billion in total.
- Medicare Advantage plans offer up to 22 chronic disease benefits ranging from vision, hearing, dental to shampooing carpets for asthma patients. The 27 million traditional Medicare enrollees are denied those 22 chronic disease benefits. Is this fair? Would you support Congress providing more funding to provide the same chronic disease benefits for traditional Medicare?
The NRLN looks forward to reading your response to the above question and any other comments you may have on Medicare Advantage.