Some curated observations from an analysis of Medicare’s health and future by the Committee for a Responsible Federal Budget:
- The number of Medicare beneficiaries grew from 40 million in 2000 to 60 million in 2018 (the explosion of the Boomer generation aging to 65) and is projected to grow by another 27 million – to 87 million – by 2040;
- Each part of Medicare will grow: Part B experiences the largest increase as a percent of the Gross Domestic Product while Part D is the fastest-growing part of the program;
- Medicare Advantage enrollment is expected to increase from 37% of Medicare enrollment in 2018 to 40% by 2028, and spending will rise from 31 to 37% of Medicare spending.
Medicare Spending by Part
(Percent of GDP)
Of Medicare’ three main components:
- Part A spending is projected to increase from 1.5% of GDP in 2018 to 2.2% in 2040 before growing more gradually to 2.3% by 2090;
- Part B follows a similar but faster-growing trend, increasing from 1.7% of GDP in 2018 to 3% in 2040 and 3.1% by 2090;
- Part D is the smallest but fastest-growing over the next 75 years, rising from 0.5% of GDP in 2018 to 0.8% in 2040 and 1.1% in 2090.
Medicare Advantage continues to grow: participation increased from 24% of total Medicare enrollment in 2009 to 36% in 2018 with M/A plans receiving more than three-quarters of the net increase in enrollment during that time.
Trustees expect this trend to continue: private plans are expected to receive a majority of the net enrollment increase over the next decade, reaching 40% of total enrollment in 2028. The Trustees expect M/A to continue to play a big and increasing role within Medicare.
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Preliminary Premium Growth Rates
The numbers reflect the % growth as compared to the same quarter of the previous year unless noted otherwise.
* Reflects 4Q YE sales results **Individual LTCI sales is reported annually