Who Uses Medicare the Most | A Look at traditional Medicare Beneficiaries and Enrollment

Medicare is a federal health insurance program that provides health insurance coverage to Americans aged 65 and older, as well as some younger Americans with disabilities. But who exactly are the Medicare beneficiaries? And what does Medicare enrollment look like across the United States? This blog post takes a deep dive into the Medicare population to understand who uses Medicare the most.

An Overview of Parts of Medicare in 2023

Medicare is the nation’s largest health insurance program, providing health insurance to 61 million Americans in 2019. That’s nearly 20% of the entire U.S. population.

The Medicare program in 2023 has different parts providing different types of coverage:

Medicare Part A covers hospital insurance. It helps pay for inpatient hospital stays, skilled nursing facility care, hospice care, and some home health care services.
Medicare Part B covers medical insurance. It helps pay for doctors’ services, outpatient care, durable medical equipment, and some preventive services.
Medicare Part D provides prescription drug coverage. Private insurance companies offer plans that help cover the cost of prescription drugs.

To be eligible for Medicare, you must be at least 65 years old or have a qualifying disability or condition. People under age 65 can qualify for Medicare if they have end-stage renal disease or amyotrophic lateral sclerosis (ALS).

Once someone becomes eligible for Medicare, they can enroll in different types of Medicare coverage. Some people choose to enroll in original, traditional Medicare (Parts A and B). Others enroll in private Medicare Advantage plans (Part C) offered by insurance companies contracted with Medicare. Still others purchase supplemental Medicare insurance (Medigap) plans may also to help cover out-of-pocket costs in original Medicare.

Medicare Enrollment and Beneficiaries by Location

Medicare enrollment and the number of beneficiaries varies widely across the United States. Some states have much higher Medicare enrollment than others when you look at it as a percentage of the total state population.

In 2019, the state with the highest Medicare enrollment as a share of the total state population was Maine, at 23%. Florida and West Virginia followed closely behind with 22% of their populations enrolled in Medicare.

On the opposite end, the state with the lowest level of Medicare enrollment was Alaska, with just 8% of its population enrolled in Medicare. Utah and Texas also had relatively low levels of Medicare enrollment compared to other states.

When looking at the raw number of Medicare beneficiaries, California has the most by far with over 6 million medicare beneficiaries. Florida, New York, Texas, and Pennsylvania round out the top 5 states with the highest total number of Medicare beneficiaries.

At the other end, Wyoming has the fewest Medicare beneficiaries at just over 95,000 people. The District of Columbia, Vermont, Alaska, and North Dakota all have less than 150,000 Medicare enrollees.

Medicare Enrollment by Age

Given that Medicare eligibility is primarily based on age, it’s no surprise that enrollment is highest among Americans aged 65 and over.

Over 94% of Americans aged 65+ are enrolled in Medicare coverage. That equals between 14 percent to 18% of the total U.S. population enrolled in Medicare.

People just reaching age 65 have the highest Medicare enrollment rates. Over 96% of 65-year-olds are enrolled in Medicare as some opt to delay enrollment if covered by an employer health plan.

Medicare enrollment rates dip slightly among older age groups but still remain over 90% for Americans aged 70 and above.

Younger Americans with disabilities account for the remaining 6% of Medicare beneficiaries who are under age 65. This includes over 800,000 people under age 45 enrolled in Medicare due to disability.

Medicare Enrollment by Gender

When looking at Medicare enrollment broken down by gender, a slightly higher percentage of women are covered by Medicare than men.

In 2019, over 22% of the female population was enrolled in Medicare compared to 19% of the male population. This equates to 35 million female Medicare beneficiaries versus 27 million male beneficiaries.

The discrepancy in Medicare enrollment between genders can partially be explained by longer life expectancies among women. The average life expectancy for women in the U.S. is 80 years compared to just 74 years for men. With higher numbers of women living well into their 60s, 70s, 80s and beyond, that means more female Medicare-eligible seniors.

Dual Enrollment in Medicare and Medicaid

One population that relies heavily on Medicare coverage are low-income seniors and younger people with disabilities who qualify for both Medicare and Medicaid.

Medicaid provides health coverage to eligible low-income adults, children, pregnant women, elderly adults and people with disabilities. The crossover between Medicare and Medicaid services are individuals who qualify for both programs.

In 2019, over 12 million Americans were dually enrolled in Medicare and Medicaid coverage according to centers for medicare and Medicaid. These beneficiaries turn to Medicaid to help cover Medicare premiums and cost-sharing as well as provide additional benefits not covered by Medicare like long-term care, dental, vision and more.

The dual eligible population skews older with over 40% being aged 65 and over. But a significant subset are under age 65 and have disabilities making them eligible for both total Medicare and Medicaid.

People dually enrolled in Medicare benefits and Medicaid have much higher health risks and medical costs compared to the average Medicare population. They comprise just 20% of Medicare beneficiaries but account for over 30% of Medicare spending.

Medicare Advantage Enrollment Growth

A growing share of Medicare beneficiaries are opting for private Medicare Advantage plans instead of original Medicare.

In 2020, 42% of all Medicare beneficiaries were enrolled in a Medicare Advantage plan. This is up from just 13% in 2004 showing massive growth in Medicare Advantage over the past 15+ years.

Medicare Advantage plans are required to cover the same services as original Medicare but often have extra benefits like vision, dental, hearing, gym memberships and more. This makes them appealing to Medicare shoppers.

Urban areas tend to have the highest Medicare Advantage enrollment penetration. In metro areas like Miami and San Juan, over 60% of Medicare beneficiaries have enrolled in a Medicare Advantage plan.

Rural areas have lagged in Medicare Advantage adoption but enrollment is climbing. 28% of rural beneficiaries were in a Medicare Advantage plan in 2020 compared to just 4% in 2004.

As Medicare Advantage plans gain popularity, enrollment is projected to keep rising over the coming decade. This will likely lead to over half of Medicare beneficiaries choosing Medicare Advantage plans within the next 5-10 years.

Why Medicare Enrollment Levels Matter

Monitoring Medicare enrollment levels and trends is important for forecasting the program’s future costs and utilization of services.

As the number of Medicare beneficiaries grows each year with aging Baby Boomers, pressure on the Medicare program also rises. More enrollees means more claims and higher expenses for the Medicare program over time.

Understanding high-utilizing groups like dual eligibles and which areas have the most beneficiaries helps CMS administer Medicare as efficiently as possible. It also gives lawmakers insight into how proposed legislation could impact Medicare expenditures and enrollment incentives.

For health policy researchers, enrollment statistics help identify gaps in coverage and opportunities to serve vulnerable groups like low-income beneficiaries, rural populations, and people with disabilities.

Just as Medicare enrollment isn’t distributed equally across states and demographics, neither is health status and medical spending. That’s why a deep dive into the Medicare population is so important for all stakeholders to ensure the program remains solvent and effective for generations to come.

FAQS

What percentage of Medicare beneficiaries are enrolled in Medicare Advantage plans?

In 2022, over 28 million beneficiaries, or 48 percent of all Medicare beneficiaries, are enrolled in Medicare Advantage plans. This represents the highest number and percentage of Medicare beneficiaries enrolled in private Medicare Advantage plans since the term Medicare Advantage was introduced.

What does Medicare Part A cover?

Medicare Part A, also known as Medicare hospital insurance, covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health care. Medicare Part A is one of the original parts of Medicare when Medicare became law in 1965.

What is the difference between Medicare Advantage plans and Original Medicare?

The main difference is that Medicare Advantage plans are offered by private insurance companies and bundle Medicare Part A, Part B, and usually Part D together. Original Medicare includes Part A and Part B and is managed directly by the federal government. Beneficiaries can choose to enroll in either Medicare Advantage or Original Medicare.

What percentage of people age 65 and older are enrolled in Medicare?

Over 90 percent of Americans age 65 and older are enrolled in Medicare. This amounts to over 50 million older Americans who get services covered through Medicare, making it a vital program for this vulnerable population.

What does Medicare Part B cover?

Medicare Part B covers physician services, outpatient care, preventive services, ambulance services, durable medical equipment, and other medical services. Beneficiaries have to pay a monthly premium for Part B coverage.

What percentage of Medicare beneficiaries have diabetes?

Around 25 percent of fee-for-service Medicare beneficiaries have diabetes. Among Medicare Advantage enrollees, around 30 percent have diabetes. This chronic condition affects a significant percentage of the Medicare population.

What does Medicare pay for long-term care?

Although Medicare does not cover most long-term care, it does pay for skilled nursing facility care in limited circumstances after a 3-day covered hospital stay. Medicare also covers some home health care for beneficiaries who need care on an intermittent basis. But most long-term custodial care is not covered.

How is Medicare funded?

Medicare is funded through a combination of Medicare Part A payroll taxes, monthly premiums for Part B and Part D, deductibles and coinsurance paid by beneficiaries, and money from the federal government’s general revenues. The Medicare Hospital Insurance Trust Fund pays for Part A services.

How many people are dually eligible for Medicare and Medicaid?

Around 12 million low-income seniors and younger people with disabilities are dually eligible for Medicare and Medicaid. This coverage helps pay Medicare premiums and cost-sharing and provides additional benefits not covered by Medicare like long-term care.

How do Medicare Advantage plans help reduce healthcare costs?

Medicare Advantage plans aim to provide the same services as Original Medicare but with lower out-of-pocket costs for beneficiaries. With capitated payments per enrollee, these private plans have incentives to provide cost-effective care and reduce the number of unnecessary services. This can help lower overall healthcare spending at the institutional level of care.

Who Uses Medicare the Most? A Look at Medicare Beneficiaries and Enrollment