Traditional Medicare supplemental insurance and the rise of Medicare Advantage.

OBJECTIVES

Most Medicare beneficiaries obtain supplemental insurance or enroll in Medicare Advantage (MA) to protect against potentially high cost sharing in traditional Medicare (TM). We examined changes in Medicare supplemental insurance coverage in the context of MA growth.

STUDY DESIGN

Repeated cross-sectional analysis of the Medicare Current Beneficiary Survey from 2005 to 2019.

METHODS

We determined whether Medicare beneficiaries 65 years and older were enrolled in MA (without Medicaid), TM without supplemental coverage, TM with employer-sponsored supplemental coverage, TM with Medigap, or Medicaid (in TM or MA).

RESULTS

From 2005 to 2019, beneficiaries with TM and supplemental insurance provided by their former (or current) employer declined by approximately half (31.8% to 15.5%) while the share in MA (without Medicaid) more than doubled (13.4% to 35.1%). The decline in supplemental employer-sponsored insurance use was greater for White and for higher-income beneficiaries. Over the same period, beneficiaries in TM without supplemental coverage declined by more than a quarter (13.9% to 10.1%). This decline was largest for Black, Hispanic, and lower-income beneficiaries.

CONCLUSIONS

The rapid rise in MA enrollment from 2005 to 2019 was accompanied by substantial changes in supplemental insurance with TM. Our results emphasize the interconnectedness of different insurance choices made by Medicare beneficiaries.