Medicare Advantage is a private plan alternative to traditional Medicare. The plans are managed by private companies that must be Medicare-approved and agree to follow certain rules. Enrollment in Medicare Advantage grew from 12 million in 2011 to 26 million in 2021.
A growing number of employers are using Medicare Advantage in place of their existing retiree health plan and traditional Medicare coverage. In fact, employer-sponsored Medicare Advantage enrollment grew from 2.1 million in 2011 to 4.9 million in 2021. On the upside, using Medicare Advantage can save an employer money (the cost of coverage is shared with the federal government), and employers and insurers can custom design health benefits to meet the needs of their own retiree populations. On the downside, retirees caught in the transition may experience a disruption in care if the new plan doesn’t include their providers or has new requirements, fees or other access barriers. As a result, employers across the country switching to Medicare Advantage plans for their retirees are seeing some legal resistance.