Analyzing the Growth Opportunities within Medicare Advantage Plans and Strategies for Enhanced Beneficiary Engagement

By 2024, 32.8 million Medicare beneficiaries, or 54%, were enrolled in Medicare Advantage (MA) plans. This was a large increase from just 19% enrollment in 2007. The Congressional Budget Office (CBO) predicts that by 2034, about 64% of all Medicare beneficiaries will choose MA plans. This shows a change from traditional Fee-For-Service Medicare to managed care models. The number of people eligible for Medicare is growing about 3.5% each year. Also, the number of people joining managed plans is rising nearly 10% each year.

Many people like MA plans because they have low or no premiums, limits on out-of-pocket costs, and extra benefits that regular Medicare does not offer. Traditional Medicare usually has no limit on how much money a person must pay, but MA plans often set a spending cap. This makes these plans better for seniors with less money. Benefits like dental, vision, and hearing coverage are also reasons people pick MA plans.

Enrollment in MA plans changes a lot by location. Thirty states have more than half of their Medicare population in MA plans. Puerto Rico has the highest rate at 95%. Cities tend to have more people in MA plans than rural areas. Rural areas have fewer doctors and fewer plan choices. About 37% of Medicare beneficiaries live in counties where at least 60% of people are in MA plans.

Two companies, UnitedHealthcare and Humana, cover 47% of MA enrollment across the country. UnitedHealthcare’s share grew from 20% in 2010 to 29% in 2024. It is also moving into more counties and states. CVS Health and Humana are growing by adding more counties and increasing their reach.

Special Needs Plans and Dual-Eligible Beneficiaries

Special Needs Plans (SNPs) are an important part of Medicare Advantage. These plans focus on people who have complex health problems and those who qualify for both Medicare and Medicaid. SNP enrollment more than doubled from 2019 to 2024. Now, 6.64 million people are in SNPs, making up 20% of all MA enrollment. Most SNP members (88%) are dual-eligible beneficiaries who need special care coordination.

The Medicaid and CHIP Payment and Access Commission (MACPAC) warned about “look-alike plans.” These are regular MA plans with many dual-eligible members but no official SNP status. Look-alike plans might weaken efforts to provide coordinated care by taking people away from real SNP programs. To fix this, CMS suggested policy changes. These changes would limit traditional MA plans with many dual-eligible members in states where SNPs are available, to help care work better.

Having SNPs and D-SNPs is important to meet the special needs of these groups. But it is still hard to give enough care access, especially in rural places. CMS ideas to relax rules on network size and include telehealth might help improve access.

Supplemental Benefits and Social Determinants of Health

Medicare Advantage plans have added more supplemental benefits that address social factors affecting health. Since 2019, CMS has allowed MA plans to offer more nonmedical services to people with chronic illnesses. This is through the Special Supplemental Benefits for the Chronically Ill (SSBCI) rule. These benefits can be things like meal delivery, rides, home repairs, pest control, and help for caregivers.

Between 2018 and 2020, more MA plans began offering meals (from 20% to 46%) and transportation (from 19% to 35%). SNPs have done even more, with 61% offering meal benefits and 85% offering transportation, compared to 46% and 35% in non-SNP plans.

These nonmedical benefits help with problems like not having enough food or no way to get to the doctor. These problems can make health worse and cause more doctor visits if not solved. Some MA plans work with groups like Meals on Wheels or ride services like Lyft to give better help to members.

CMS is also working on better tracking of how people use these benefits. This lets health plans see which services help most and adjust what they offer to meet members’ needs better.

Challenges Facing Medicare Advantage Plans

Even though MA plans grow steadily, they face some challenges. They use tools like prior authorizations more than traditional Medicare—about twice as much. These tools help control costs and improve care, but they can delay or stop needed care, especially for people with serious health problems. Some people with complex needs switch back to traditional Medicare, showing that MA plans may not always fully serve them.

Another challenge is keeping good coverage in rural areas. These areas have lower MA enrollment partly because of fewer doctors and less plan choice. This makes it hard for health providers and IT teams to give good access when networks are small or spread out.

People also find it hard to choose a plan due to many options. In 2024, the average person can choose from 43 plans, twice as many as in 2018. Clear explanations and help with choosing plans are important to make things easier.

Strategies for Enhanced Beneficiary Engagement

• Community Relationships and Targeted Outreach: Non-profit health plans connect with local groups to help new and aging members decide which plan is best. Local support builds trust and keeps people loyal to the plan.

• Serving Special Populations: Special efforts are needed for dual-eligible people and racial or ethnic minorities. Enrollment among Black and Hispanic people in MA plans is growing faster than in traditional Medicare. From 2021 to 2022, over 15% of Black and Hispanic beneficiaries switched to MA, compared to 6.4% of White beneficiaries.

• Benefit Design and Value-Based Care: Plans that focus on quality, like getting high star ratings, attract more members. Non-profits have improved by using payment models that reward good care, adding supplemental benefits, and offering rewards like cash benefits to help reduce costs.

• Education and Marketing: Because there are more plan choices, clear and honest marketing helps members understand what is offered. This reduces confusion and makes people happier with their choice.

AI and Automation in Medicare Advantage Administration and Care Coordination

Using artificial intelligence (AI) and automation can help Medicare Advantage teams manage tasks better. These tools make routine jobs faster and improve how patients connect with their care providers.

• Automated Prior Authorization: AI can speed up approval of medical requests by automating claim reviews and following health data standards like HL7 FHIR. Starting in 2026, CMS requires faster approval times—requests must be done within 72 hours. Automation cuts down paperwork and gets care faster.

• Patient Interaction and Engagement: AI tools like smart phone answering systems help patients access benefits and schedule appointments. These automated systems answer common questions, freeing staff for harder tasks.

• Data Analytics and Predictive Modeling: Advanced data analysis helps track patient health risks, medicine use, and services used. Predictive tools spot people at high risk who might need extra help or benefits, which can improve health and plan success.

• Interoperability and Cloud Solutions: Cloud systems help share data easily between payers, providers, and patients. Using FHIR-based APIs lets systems talk to each other smoothly and reduces information barriers, supporting better care.

• Cost Management: AI tools find ways to reduce wasteful spending and use resources better. This is important because Medicare Advantage payments are about 22% higher than traditional Medicare for similar patients. Plans face more checks on their efficiency.

Using AI and automation tools lets healthcare groups work more efficiently, cut down time spent on paperwork, and improve patient satisfaction.

Summary

Medicare Advantage plans keep growing because of extra benefits and cost protections that many seniors like. There are chances to get more people involved through targeted outreach, local partnerships, and new benefits. Adding AI and automation helps healthcare teams manage the complexity of these plans and improve care for patients across the United States.