Medicare Advantage enrollment rises amid reports of $76 billion in overpayments

Recent data highlights significant shifts in U.S. health insurance enrollment and rising costs associated with privatized Medicare. According to Mark Farrah Associates, total medical coverage from U.S. health insurers reached 312.5 million people as of June 30, a 2.8% decrease from the previous year.

Enrollment trends show growth in Medicare Advantage (MA), which reached 35.1 million enrollees, and self-funded employer groups, which grew to 135.8 million. Conversely, the individual ACA marketplace lost over 4.5 million enrollees, and Medicaid saw a combined loss of nearly 4.1 million members.

Financial analysis from the Medicare Payment Advisory Commission (MedPAC) indicates that the federal government is projected to overpay insurers by $76 billion this year through Medicare Advantage. This occurs because the government pays approximately 14% more per beneficiary in these private plans compared to traditional Medicare. KFF reports that 32.8 million people, or roughly 54% of the eligible Medicare population, were enrolled in these privatized plans in 2024.