Medicare Advantage Enrollment and Total Medicare Program Spending

Medicare Advantage (MA) enrollment has grown significantly over the last 2 decades while Medicare program spending per capita has moderated over that same period. An open question is how the growth in MA enrollment has impacted Medicare program spending. The objective of this study is to estimate the association between MA penetration (ie, the percentage of Medicare beneficiaries enrolled in MA) and total Medicare spending per capita. We estimated linear regression models that examine the relationship between county-level MA penetration and total Medicare spending per capita. The study used county-level Medicare spending and enrollment data-including MA, Medicare Fee-for-Service, and Part D-from the Centers for Medicare & Medicaid Services from 2012 to 2021. The study included counties from all 50 states and Washington, D.C. 3045 counties were included in the analysis, which represents 97% of U.S. counties. We found that counties with higher MA penetration showed lower standardized Medicare spending per capita. Specifically, 10 percentage point higher annual MA penetration was associated with $194 lower (P < .001) total Medicare spending per capita, representing 1.5% lower spending. After adjusting risk scores to reflect the Medicare Payment Advisory Commission's estimates of higher coding intensity in MA, 10 percentage point higher annual MA penetration was associated with $146 lower (P < .001) total Medicare spending per capita, representing 1.1% lower spending. If these associations are causal in nature, then higher MA enrollment over the last 2 decades may have moderated total Medicare program spending over the same period.