For more than 50 years, Medicare has helped protect Americans age 65 and older from having to carry the burden of high healthcare costs without assistance. Along the way, Medicare has grown substantially, and some of the program's statistics have grown to the point where they're staggering. Let's take a look at a few particularly impressive Medicare stats from the Centers for Medicare and Medicaid Services and other sources.
Many more patients use Part B medical coverage...
Among those using original Medicare, the bulk of participants make claims using their Part B coverage for medical services. Part B includes doctor visits and outpatient procedures, while Part A hospital coverage includes inpatient hospital stays, skilled nursing facilities, and hospice coverage.
As you can see above, nearly every original Medicare participant uses Part B coverage at some point during the year. By contrast, less than a quarter have occasion to need their Part A coverage. That speaks to the very different roles that Part A and Part B play in providing healthcare.
...but Medicare spends more money on Part A hospital coverage
Interestingly, despite the much larger number of people using Medicare Part B, the program spends slightly more money on Part A expenses. As you can see below, hospital charges make up the bulk of Part A expenditures, while doctor visits predominate among Part B spending.
Part A coverage serves as a way of handling what would otherwise be catastrophic costs for most Americans, paying for a huge portion of highly costly hospital stays. Part B coverage doesn't have quite the same impact in that more Americans could potentially cover the cost of their doctor visits if they needed to, but the care Part B is much more commonly needed and can prevent problems from escalating to the point at which they require hospital stays.
Medicare Advantage now makes up more than 30% of all participants
Medicare Advantage plans have gotten much more popular in recent years, because patients have looked for ways to cover expenses that ordinary Medicare doesn't include. As a result, the CMS estimates that in fiscal 2016, 17.3 million participants will join Medicare Advantage plans. That's more than 30% of Medicare participants, and when you add in those who enroll in other health plans beyond original Medicare, the number rises to nearly a third.
Three companies dominate Medicare Advantage
As important as Medicare Advantage has become, you'd expect competition to be fierce. Yet only three entities provide the majority of Medicare Advantage plans by enrollment: UnitedHealth Group (NYSE:UNH), Humana (NYSE:HUM), and Blue Cross Blue Shield. Anthem (NYSE:ANTM) plays a significant role in Blue Cross Blue Shield plans in many states, although not all state Blue Cross plans are affiliated with Anthem.
Among these, Humana has seen the largest growth in enrollment over the past year, according to figures from the Kaiser Family Foundation. Humana's new member count grew by more than 350,000 beneficiaries between 2014 and 2015, with UnitedHealth coming in with more than 250,000 new additions.
Medicare gets a big discount from submitted charges
One key benefit for Medicare participants is that the program rarely ends up paying the full amount that medical professionals charge. Medicare is able to approve lower payments that save the program money, and the savings can be staggering.
For instance, according to figures from CMS and Becker's Hospital Review, Level 1 hospital clinics participating in the Inpatient Prospective Payment System only got paid for about two-thirds of the charges they submitted to Medicare. Different levels of clinics reported similar results that generally fell within the 60% to 70% range.
Medicare is an important program, and it plays a key role in the lives of tens of millions of Americans. By knowing what Medicare covers, you can make sure you take full advantage of your benefits when you receive them.
Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Anthem and UnitedHealth Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.