Medicare Advantage enrollment grew at 3.9% last year despite market conditions unfavorable to payers.
Medicare Advantage (MA) enrollment has slowed following a period of rapid growth in the early 2020s.
MA plans added 1.3 million new members since 2024, an increase of 3.9% year-over-year, according to a recent report from Chartis. Meanwhile, traditional Medicare added 200,000 members.
Revenue cycle leaders may be pleased with slowed growth, as many provider organizations have become increasingly frustrated with the commercial payers administering MA plans.
MA enrollment by the numbers
Growth in MA peaked earlier this decade when enrollment grew at rates of 7% to 10%, according to Chartis. While enrollment in traditional Medicare ticked up for the first time since 2020, there are now more members enrolled in MA plans than in traditional Medicare.
In 2020, 60% of all Medicare beneficiaries were enrolled in traditional Medicare vs. 40% in MA. Now, 49% are enrolled in traditional Medicare vs. 51% in MA.
The majority (55%) of new MA beneficiaries are enrolled in for-profit plans. Overall, around three-fourths of MA beneficiaries are enrolled in plans from for-profit payers.
However, the growth rate in non-profit plans exceeded typical rates of about 15% seen earlier in the decade. Provider-sponsored health plans account for 8% of all MA beneficiaries in 2025, compared with 11% in 2020.
Market conditions challenge payers
Market conditions – including rising utilization, lower-than-expected rate increases, and increased regulatory scrutiny – have led some payers to slow growth in or, in some instances, exit MA markets. For instance, Premera and Blue Cross Blue Shield of Kansas City both exited the MA market. Others, like Aetna and Humana, reduced service areas and terminated plans.
Payers offered fewer MA plans than they had in the previous year. The total number of MA plans available grew from 4,284 in 2020 to 5,673 in 2024 before falling to 5,581 in 2025. Additionally, more than 60% of plans weakened benefit offerings.
Quality rating performance among MA plans also fell from the previous year. Around 80 % of MA beneficiaries were in plans rated 4stars or above by the Centers for Medicare & Medicaid Services (CMS) in 2024 vs. 64% in 2025.
How MA impacts rev cycle leaders
MA plans pose significant challenges for revenue cycle leaders, adding layers of administrative complexity to overburdened workforces.
Prior authorization requirements, which are rarely used in traditional Medicare, have become a difficult-to-navigate feature of many MA plans, leading to denials and lost revenue. One analysis showed that claim denial rates fell in traditional Medicare from 2023 to 2024 while they rose 4.8% for MA plans.
Cost-sharing arrangements between patients and their plans often leave patients on the hook for services that are not covered.
Rachelle Schultz, Winona Health president and CEO, recently told HealthLeaders that she has “heard so much feedback from patients who felt like they got blindsided by what was covered, what was not covered.”
Prior authorization legislation, which is on the table, could help relieve some of the administrative burden that MA plans lay on revenue cycle leaders. However, in the meantime, slowed MA growth could provide revenue cycle leaders with some clarity regarding payer mix in the future, which could better inform their revenue cycle operations.
Luke Gale is the revenue cycle editor for HealthLeaders.
KEY TAKEAWAYS
Medicare Advantage enrollment grew 3.9% last year, down from peaks of 7% to 10% earlier in the decade.
Challenging market conditions have caused some payers to pull back from MA businesses and impacted quality rating performance.
Slowed growth could offer clarity to revenue cycle leaders over future expectations for payer mix.