What shift has been observed in Medicare spending, particularly regarding Medicare Advantage plans?

Question

Christopher Boyd · Accepted Answer

Some plans which were in place in 2023 and 2024 have had their Maximum Out Of Pocket (MOOP) increase in 2025.

Mike Alexander · Answer

DUE TO THE INFLATION REDUCTION ACT, FUNDING HAS BEEN CUT FOR ADVANTAGE PLANA AND PART D PLANS. ADVANTAGE PLANS ARE UNDER A LOT OF FINANCIAL STRAIN SUE TO INCREASED COST.
LOOK FOR REDUCED BENEFITS FOR YEARS TO COME

Larry Dalton · Answer

Many people with very limited incomes have enjoyed the opportunity to use OTC cards to help pay for over-the-counter drugs and utilities. There is considerable debate about whether this should continue in the future and whether it should be withdrawn from the Medicare system and transferred to the Medicaid system. Medicare Advantage plans are very beneficial in many ways, but they do come with their pros and cons and should be carefully analyzed before making a decision to go down that path.

Answered by Larry Dalton on March 26, 2025

Broker Licensed in OK & TX

Answered by Larry Dalton Medicare Insurance Agent

Tony Capraro III · Answer

Hey folks, Medicare agents Tony Capraro from State Farm on Kelly Street in Manchester. What shift has been observed in Medicare spending, particularly regarding Medicare Advantage plans? Good question. You're gonna see more and more changes with these Medicare Advantage plans. When they came out in the 90s, they were a wonderful thing. They combined Parts A and B and then gave you drug prescription coverage. As more and more people have gotten on the Medicare Advantage plans, obviously the costs have increased, and more and more folks are going towards the Medicare Advantage plans.

I think here in New Hampshire for 2026, when we do open enrollment in October, there's going to be a lot of major changes, and not for the better. I believe a lot of the Medicare Advantage plans will be looking to limit coverages. They'll be looking to get rid of the bells and whistles, I think. And again, I don't know yet. We won't know for a while. But I think the dental division, that type of thing that always entices people to do the Medicare Advantage plans, might be something of the past.

But do yourself a favor. Work with someone like myself who not only does Medicare Advantage plans but also does Medicare supplement plans. We'll have all the information for you, probably right around the next couple of weeks, I would think, about the Medicare Advantage plans and who's in New Hampshire, who's not going to be in New Hampshire, what hospitals and doctors are getting out of the Medicare Advantage plans. This way, we can educate you with all of that stuff so you can make a great decision. Love to help!

Brian Moore · Answer

Medicare spending crossed the $1 trillion threshold, with a significant 52% of this now going towards Medicare Advantage plans, up from 39% in 2019, indicating a shift in how care delivery and financing are evolving.

Answered by Brian Moore on February 16, 2025

Broker Licensed in OH

Answered by Brian Moore Medicare Insurance Agent

David Bell · Answer

Since 2004, as Medicare Advantage has evolved, we have seen more and more extra benefits added to the plans. Dental, vision, hearing, gym memberships and over-the-counter credits are the most notable. All money spent by the plans to care for their members. Additionally, they are well accepted by doctors and facilities.

Answered by David Bell on April 15, 2025

Agent Licensed in ID, AZ, CA & 8 other states

Answered by David Bell Medicare Insurance Agent

Sandra (Sandy) Steffy · Answer

Medicare spending has shifted heavily toward Medicare Advantage (MA). MA now accounts for over half of all Medicare spending, up from about 39% in 2019. This jump is driven by rapid enrollment growth and higher per‑person payments to MA plans compared with traditional Medicare.

Answered by Sandra (Sandy) Steffy on March 30, 2026

Agent Licensed in VA, AL, DC & 7 other states

Answered by Sandra (Sandy) Steffy Medicare Insurance Agent

Mary Turner · Answer

The biggest changes I've seen in Medicare advantage plans is with the extra benefits.  Dental, vision, OTC, fitness benefits have expanded or been added over the years.

Jeffrey Jon · Answer

This is from a google search with the exact wording of the question: 
Medicare spending has experienced a significant shift toward private Medicare Advantage (MA) plans, which now cover over half of eligible beneficiaries. MedPAC reports that payments to MA plans consistently exceed traditional Medicare, with 2025 payments estimated to be 20% higher per person—totaling $84 billion in additional spending—driven by coding intensity and favorable selection. 
Key shifts and trends include:
Higher Costs: Medicare spends more per beneficiary in MA than in traditional Medicare, with estimates in 2024 showing payments at 122% of traditional Medicare costs.
Rapid Enrollment Growth: More than 50% of beneficiaries are now enrolled in private MA plans.
Profit Drivers: Increased spending is attributed to "coding intensity" (making patients appear sicker to get higher payments) and "favorable selection" (enrolling healthier, less costly individuals).
Benefit Pressures: Despite higher overall spending, some 2025 data suggests plans are scaling back supplementary benefits in response to revenue pressures.
Impact on Solvency: The higher spending in Medicare Advantage compared to traditional Medicare poses challenges to the Medicare Trust Fund's solvency.

Donna Lueders · Answer

ome Medicare Advantage plans are not offering over the counter incentives. Additionally, dental, hearing, and vision components are only offering preventative services. Please speak with an agent or review your plan carefully before making a decision If these items are of importance to you.

Answered by Donna Lueders on April 6, 2026

Broker Licensed in FL, GA, LA, NC & SC

Answered by Donna Lueders Medicare Insurance Agent

Ronald Plocinski · Answer

As of the Fall of 2025, the majority, 53%, of seniors on Medicare supplement their Original Medicare (Part A and Part B) with a Medicare Advantage plan. While it is not the only option, it is the most popular and, according to some sources, will continue to grow to 63% of the Medicare space by 2035. From the beneficiaries perspective, Advantage plans are popular because of the FREE "add on" benefits such as dental, vision, hearing, fitness and over the counter allowances.

Answered by Ronald Plocinski on September 14, 2025

Broker Licensed in NH, AZ, CA & 16 other states

Answered by Ronald Plocinski Medicare Insurance Agent

Walt Smith · Answer

Medicare Advantage plans have evolved over the last several years. Most of them are now PPOs, which means you can go to doctors not in the network. They’ve added benefits that Medicare does not cover like dental coverage, eyeglass coverage, over-the-counter items, even hearing aids. And majority of the seniors or people on Medicare now has this type of coverage

Answered by Walt Smith on March 25, 2025

Agent Licensed in NJ, NY, PA & VA

Answered by Walt Smith Medicare Insurance Agent

Yasmery Vargas · Answer

The dental and hearing benefits are underused. It caused many insurance companies to not only reduce benefits but also reduce other benefits like otc spend with restrictions.

Kris Moen · Answer

Medicare spending has shifted significantly toward Medicare Advantage — the private-plan alternative to traditional Medicare. Enrollment in Advantage plans now covers over half of Medicare beneficiaries, and federal spending per person in Medicare Advantage is higher than in traditional Medicare, contributing to a growing share of overall Medicare costs and drawing more public dollars into private plan payments.

Answered by Kris Moen on December 24, 2025

Agent Licensed in ND

Answered by Kris Moen Medicare Insurance Agent

Thomas Magnus, RHU · Answer

Medicare spending increases annually. This is due to more and more people qualifying for Medicare, earlier diagnosis and longer life expectancies, advances in technology and the cost of delivering services through medical professionals.

Answered by Thomas Magnus, RHU on June 19, 2025

Broker Licensed in CA, AZ, NV, OR & WA

Answered by Thomas Magnus, RHU Medicare Insurance Agent

Sean Davis · Answer

A notable shift in Medicare spending has been the increasing enrollment in Medicare Advantage plans, which typically showcase a trend of higher spending per beneficiary compared to Original Medicare. This growth reflects a preference among many beneficiaries for the additional benefits, such as vision and dental coverage, that Medicare Advantage plans often offer. Additionally, while Medicare Advantage plans may initially seem cost-effective due to lower premiums, the overall spending on healthcare services, including potential out-of-pocket costs, has been rising. This shift highlights the need for continuous evaluation of how these plans align with beneficiaries healthcare needs and financial situations.

Answered by Sean Davis on March 26, 2025

Broker Licensed in NY, LA, MD & 6 other states

Answered by Sean Davis Medicare Insurance Agent

Brian Leichner · Answer

That depends on what you mean by "shift". If you are asking about Medicare the government entity spending, the answer is that in the last 5 years a change of funding Medicare benefits went mostly towards Medicare Advantage funding. So much that now more funding is for Medicare Advantage (Part C) than Original Medicare. Original Medicare has implemented cost controls like increasing premiums for Part B and adding a deductible to Part B; then increasing it annually. Now Medicare itself is implementing private insurance cost controls like 17 different Pre-Authorizations prior to having procedures. I hope that helps. Brian Leichner, Pro Insurance Resources, Inc.

Answered by Brian Leichner on October 1, 2025

Agent Licensed in NE, AZ, CO & IA, KS, MO & TN

Answered by Brian Leichner Medicare Insurance Agent

Fred Manas · Answer

Medicare spending has shifted towards Medicare Advantage plans, with spending on these plans exceeding traditional Medicare for Part A and Part B benefits since 2023. This shift is driven by rising enrollment in Medicare Advantage and higher payments to these plans compared to traditional Medicare. 
Here's a more detailed look:
Increased Enrollment:
The percentage of beneficiaries enrolled in Medicare Advantage has steadily increased, reaching over 50% of eligible Medicare beneficiaries in 2020. 
Growing Spending:
Payments to Medicare Advantage plans have nearly tripled between 2011 and 2021, growing from 26% to 47% of total Part A and B spending. 
Higher Payments:
Medicare pays more per beneficiary in Medicare Advantage plans than in traditional Medicare, with estimates suggesting an extra $83 billion in 2024 due to upcoding, favorable selection, and quality bonuses. 
Projected Growth:
Medicare spending on Medicare Advantage benefits is expected to continue growing, reaching 60% of total Part A and B spending by 2031, according to a KFF analysis. 
Reasons for Growth:
The shift is fueled by factors like zero-premium plans, extra benefits (vision, dental, etc.), out-of-pocket limits, and a desire for more convenient access to care. 
This shift raises questions about Medicare's long-term solvency and affordability, as Medicare Advantage plans are paid on average significantly more than traditional Medicare for similar beneficiaries.

Vachik Chakhbazian · Answer

spending on these plans significantly increasing as a percentage of total Medicare spending. ith Medicare Advantage enrollment growing rapidly and representing a larger portion of Medicare spending than traditional Medicare. Furthermore, Medicare Advantage plans are, on average, paid more per beneficiary than traditional Medicare.

Answered by Vachik Chakhbazian on April 17, 2025

Agent Licensed in CA, AL, AR & 22 other states

Answered by Vachik Chakhbazian Medicare Insurance Agent

Meghan Blankenship · Answer

Medicare spending has significantly increased due to the rapid growth of Medicare Advantage (MA) plans, which now cost the federal government about 20% more per enrollee than traditional Medicare.

Dean Chiapetto · Answer

Medicare Advantage plans have lost the ability to provide some extras that were available last year. Drug prices are less on Advantage plans.

Gary Haft · Answer

I am not sure of your question - but Medicare is looking for the lowest possible cost and therefore looking at the Medicare Advantage Plans overall - it seems the costs have increased substantially, and they are finding that there are more claims that are possibly not medically necessary causing the Medicare Advantage Plan to possibly cost Medicare more on their side than the Medicare Supplement and Original Medicare. Understand that Medicare pays a flat amount of money to each carrier for each enrolled member to a Medicare Advantage Plan and if your expenses exceed that amount, the carrier loses money and therefore many times looks for another way to charge Medicare for that excess. The amount Medicare pays to the carrier for that enrolled member depends on the health of that member.

Answered by Gary Haft on May 26, 2025

Agent Licensed in FL, AL, DC & 9 other states

Answered by Gary Haft Medicare Insurance Agent

Chuck Winslow · Answer

One of the biggest shifts we’ve seen in Medicare spending is the continued movement toward Medicare Advantage plans. Today, more than half of all Medicare beneficiaries are enrolled in a Medicare Advantage plan, and a growing share of Medicare dollars is now flowing through private insurance companies rather than Traditional Medicare.

At the same time, there’s been increased discussion around the long-term cost of these plans to the Medicare system. Some reports estimate Medicare Advantage is costing the federal government billions more annually compared to Traditional Medicare due to payment structures and risk adjustments.

What’s also interesting is that while Medicare Advantage enrollment is still growing, the pace has started slowing as some carriers reduce benefits, exit markets, or discontinue plans because of rising healthcare costs and reimbursement changes.

This is exactly why it’s important for seniors to review their coverage every year and understand both the pros and limitations of Medicare Advantage versus Original Medicare with a Supplement.

I help seniors and families understand these changes every day and make sure they know all their options — at no cost.

Chuck Winslow
US Marine Veteran 🇺🇸
Retirement & Legacy Planner
Contact me.

Lyle Affleck · Answer

Much like the plans offered through the Affordable Care Act (ACA), Medicare Advantage plans are seeing more of the cost of care being put on the consumer. Deductibles are increasing. Co-payments are increasing and co-insurances are going up. In many cases, this rise is outpacing inflation, so cost of living adjustments are not sufficient to keep things at low costs for individuals.

Answered by Lyle Affleck on June 1, 2026

Agent Licensed in UT, CO, FL & 8 other states

Answered by Lyle Affleck Medicare Insurance Agent

Jamie Blake · Answer

Recent Decade (2010-2020)

Medicare spending grew at a slower rate, both overall and per beneficiary, compared to prior decades. 

Future Projections (2020-2030):
Slower growth in the prior decade is expected to reverse, with higher per capita spending projected, comparable to private health insurance growth.

Diana Muhammad · Answer

That's a great question.   I would say although each plan is different and each year brings about changes.  It would really depend on the individuals' needs.  However, I would say that the Medicare Advantage Plans are competitive.   Each bring great and similar benefits.   

Thanks for the question.  Let me know if I can be of further assistance.   Enjoy your day!

Monica Hughes · Answer

The key shift in Medicare spending has been a growing concentration of both enrollment and federal dollars in Medicare Advantage (MA) plans, which are run by private insurers instead of the traditional government program

Answered by Monica Hughes on March 30, 2026

Agent Licensed in LA, AL, AR & 16 other states

Answered by Monica Hughes Medicare Insurance Agent

Amanda Holder · Answer

There is rapid growth in enrollment into Medicare Advantage plans. There's also an increase in spending on medications for many Medicare eligible. Someone who may use a Medicare Advantage plan may have challenges with increased copays and coinsurances as time goes on.

Answered by Amanda Holder on September 3, 2025

Broker Licensed in FL, AZ, NC & VA

Answered by Amanda Holder Medicare Insurance Agent

LaKeshia Howard · Answer

It has been observed that in recent years Medicare spending particularly Medicare Advantage plans hava had a very noticeable increase in spending per beneficiary since 2019 it has been an increase from 39 %to 52% showing a preference for Medical Advantage plans.

Answered by LaKeshia Howard on October 24, 2025

Agent Licensed in GA

Answered by LaKeshia Howard Medicare Insurance Agent

Derene Derricotte · Answer

In the past, most people received their coverage through Original Medicare.

Today, more than half of Medicare beneficiaries have chosen Medicare Advantage plans instead. Because Medicare pays the company that manages a member’s coverage, a larger share of Medicare’s dollars now goes to the private insurance companies that operate those plans.

This shift has happened mainly because many Medicare Advantage plans offer extra benefits and lower upfront costs, which can be attractive depending on someone’s needs.

What’s most important is not which option is more popular — it’s whether a plan works well with your doctors, medications, and budget.

What shift has been observed in Medicare spending, particularly regarding Medicare Advantage plans?

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What shift has been observed in Medicare spending, particularly regarding Medicare Advantage plans?

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