Medicare Advantage, the private plan alternative to traditional Medicare, has seen a steady rise in enrollment over the past two decades, with over half of eligible beneficiaries enrolled since 2023. This growth has significant implications for federal spending, as Medicare payments to private plans are higher than those for similar beneficiaries in traditional Medicare. In 2026, payments are 14% more per person, translating into an additional $76 billion in federal spending this year. Despite payments per person being similar to a decade ago, the impact on federal spending was lower due to lower enrollment.
Policymakers are increasingly focused on Medicare payment methods for private plans, but there is no broad agreement on changes to Medicare Advantage plan payments. Concerns about the effects of payment changes on beneficiaries' choices and access to supplemental benefits, such as dental, vision, and hearing coverage, are a major obstacle.
In 2026, over half (55%) of eligible Medicare beneficiaries are enrolled in Medicare Advantage, with nearly one quarter (23%) in special needs plans (SNPs). Most of the net increase in enrollment between 2025 and 2026 was among SNPs, with a 45% increase in enrollment in plans for people with certain chronic conditions (C-SNPs).
Medicare Advantage enrollment is highly concentrated among a small number of parent organizations, with UnitedHealth Group and Humana leading the market, accounting for nearly half of all enrollees. However, market shares for leading parent organizations changed, with UnitedHealth Group's share dropping and Humana's increasing.
Group plans offered to retirees by employers or unions account for slightly less than one in five (16%) Medicare Advantage enrollees, with a slight decrease in enrollment in 2026.
The Medicare Advantage Value-Based Insurance Design Model (VBID), which launched in 2017, allowed plans to provide additional interventions based on socioeconomic status, but was discontinued in 2025 due to high costs.
Despite most beneficiaries having access to plans operated by several parent organizations, Medicare Advantage enrollment is highly concentrated among a small number of parent organizations. UnitedHealth Group and Humana account for nearly half of all enrollees, with Humana having the largest growth in enrollment from 2025 to 2026.
In conclusion, the growth of Medicare Advantage enrollment has significant implications for federal spending and policy, with a focus on payment methods and access to supplemental benefits. The concentration of enrollment among a small number of parent organizations and the impact of the VBID model on plan offerings are important considerations for future policy decisions.
