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Medicare Advantage Penetration Rates

Senior couple fishing and discussing Medicare Advantage Penetration Rates.

The fastest growing program in Medicare is Part C. Part C is also known as Medicare Advantage, and you’re likely inundated with information via all sorts of marketing regarding these plans. Thankfully, there’s a ton of legitimate information on the internet and plenty of trusted resources to clear up the confusion if you know where to look. This article is not about Medicare Advantage plans or how they work, but rather a breakdown of their “penetration rate” in different states around the country. 

Medicare Advantage or Part C

Medicare Advantage or Part C plans have grown exponentially. When I entered the market in 2013 I was focused on rural counties in the Southeast only and mostly helped individuals shop their Medigap or Medicare Supplement plans. Medicare Advantage was thought of as more of a nuisance because their network adequacy in the area was abysmal. When someone could get a plan F for only slightly more than a Medicare Advantage plan in the area, but with the plan F they could pretty much go to any provider they wanted to, it was a no brainer to keep the Medigap plan as a primary option. However, in the last two years we have seen companies like Aetna and UnitedHealthcare in our backyard make great strides in building relationships with providers and hospital groups. This paired with $0 premiums and rich additional benefits has increased their competitiveness here. But this is not at all an isolated scenario. This same thing has been happening all over the country. Perhaps we’re even late to the party in the rural southeast. Let’s look at some of the numbers. 

There are currently about 25,000,000 Medicare Beneficiaries enrolled in Medicare Advantage Plans. This is approximately 36% of the total Medicare population. There was 9% growth year of year from 2019 to 2020. Much of this growth was due to rural expansion, but of course some of it was due to the volume of Americans turning 65. 

Here is a breakdown of the top 5 states by Medicare Advantage penetration rate:

Hawaii – 44%

Florida – 43%

Oregon – 42%

Michigan – 42%

Alabama – 41%


And here are the top 5 counties by Medicare Advantage penetration rate: 

Miami Dade – 67%

Monroe – 66%

Cambria – 63% 

Meeker – 62%

Ottawa – 62%

Senior couple enjoying a walk as they discuss Medicare Advantage penetration rates.
Medicare Advantage plans can leave significant exposure related to outpatient chemotherapy and radiation as well as short hospital stays of which people may be unaware.

Privatized Medicare

Basically, Medicare Advantage is a privatized Medicare option that when you elect to go on you are turning your claims administration over from Medicare to the private company offering the plan. There are strict rules and regulations that these companies have to go through to be an authorized Part C plan, and they most technically offer all of the same benefits as Medicare Parts A and B. They often include a ton of extra Dental, Vision and Hearing benefits as well as rides to doctors appointments, home health benefits, food cards and potentially over the counter benefits. Lastly, they may have some sort of Part B giveback associated with them which can increase a Medicare beneficiary’s Social Security check by decreasing the amount taken out of it. 

If you choose to have a Medicare Advantage plan and you do not qualify for a Dual Special Needs plan with reduced or no cost sharing, you should consider some additional coverage like a hospital indemnity plan with a lump sum cancer rider. 

Medicare Advantage plans can leave significant exposure related to outpatient chemotherapy and radiation as well as short hospital stays of which people may be unaware. It’s important to be prepared with this additional out of pocket and the plan above can mitigate some of that risk. There are also new plans called Health Matching Accounts that can be a solution. 

Not all Medicare Advantage plans are alike. For instance, Medicare Advantage plans called Medicare Savings Accounts are vastly different from the average PPO and HMO, and even PPOs and HMOs can be Medicare Advantage only and not include your drug coverage (typically designed for people with other drug coverage like Veterans using the VA). 

Penetration Rates

Be mindful that when you choose a Medicare Advantage plan you may be stuck on that plan for at least one year, and if you drop a Medigap plan to go on a Medicare Advantage plan you have to be careful to try it for one year so you have a trial right to get your Medigap plan back without being subject to answering health questions. Medicare Advantage plans cannot ask health questions, but Medigap plans can if not purchased during a Guaranteed Issue or your Medigap Open Enrollment period. 

We anticipate the Medicare Advantage Penetration rate to rise in the coming years as Medicare faces solvency issues and needs to find a way to come up with a fixed and predictable cost for their program. It is difficult for them to budget being the insurance company since they never know what impact might hit them during something like our recent pandemic. Medicare beneficiaries electing to stay on Traditional Medicare have their claims completely absorbed by Public Medicare, and that expense can be difficult to budget for. Insurance companies themselves are used to this type of budgeting.

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