Flat 2023 Medicare Advantage Use Raises Questions About 2025 Cost Pressures

Medicare Advantage (MA) use stayed fairly flat from 2022 to 2023, declining slightly by 1.1%, according to a new report from Trilliant Health. This small drop follows a 19.9% increase in MA use between 2018 and 2023—an increase that closely mirrors a 55.7% enrollment spike over the same period.

The report sheds light on patterns of care use within the fast-growing MA market, revealing differences in how services are accessed across age groups, care settings and insurance carriers. As MA now accounts for over half of all Medicare enrollment, Trilliant Health researchers examined their usage trends to understand what's driving recent cost pressures.

MA usage trends revealed slight declines in 2023, highlighting critical insights for policymakers amid rising healthcare costs and enrollment shifts. © may1985 - stock.adobe.com

Researchers encouraged that understanding how patients use care and how that impacts payer finance is critical for policymakers and insurers.

This report comes at a time of financial uncertainty in the MA space.

In 2024, many insurers revealed disappointing earnings, which they attributed to higher-than-expected use of healthcare services. At the same time, CMS announced a 5.06% increase in base payments to MA plans for 2026—a dramatic shift from a small decrease the prior year.

To examine MA usage trends, Trilliant used national claims data and looked at multiple care settings across age groups.

Researchers analyzed national all-payer claims from 2018 to 2023, focusing on MA patients who had at least three healthcare encounters during that period. They placed patients into three age groups—under 65 (typically individuals with end-stage renal disease or certain disabilities), 65 to 79 and 80 and older—and examined their use of nine different care settings: non-hospital outpatient, hospital inpatient, hospital outpatient, physician office, emergency department, ambulatory surgery center (ASC), urgent care, home health and telehealth.

They also evaluated care site use among major insurers, including UnitedHealthcare, Anthem, Aetna, Humana and Centene.

The results showed mixed trends across care settings and age groups.

Although total MA use rose by nearly 20% over five years, it barely changed between 2022 and 2023. Non-hospital outpatient care had the highest volume of visits but fell 1.2% over the last year. However, it was found that physician office visits rose by 2.3%. Home health services also saw the sharpest decline—dropping by 26.4% from 2022 to 2023.

In addition, inpatient hospital visits, which are among the most expensive types of care, rose by 3.6%. Other settings such as hospital outpatient (up 3.2%), emergency departments (up 1.9%) and ASCs (up 3.2%) also saw slight increases. However, urgent care visits dropped by 8.5%, and telehealth use declined by 16%.

When broken down by age group, younger enrollees under 65 saw the largest growth in non-hospital outpatient visits—an increase of 70% from 2018 to 2023. Those aged 65 to 79 saw a 56.8% increase over the same period, while those 80 and older saw a 23.4% decline. This variation is partly due to enrollment growth among younger beneficiaries and the fact that enrollees under 65 often have more complex health conditions.

Differences in care patterns across major insurers also stood out.

In 2023, MA usage varied by insurer and care setting. For example, physician visits made up 32.2% of Humana’s total utilization, compared to just 11.6% for Anthem. Hospital outpatient visits represented 47.7% of Humana’s volume but only 2.2% for Anthem. Emergency department usage ranged from 0.4% at Anthem to 2.0% at Humana.

Hal Andrews, CEO of Trilliant Health, pointed out that 2023 trends don’t fully explain what insurers are seeing in 2025.

“Our report focused on MA use from 2022 to 2023, whereas the publicly traded health insurance companies are reporting increased utilization for Q2 2025,” Andrews said. “While most of the companies have reported utilization increases across Medicaid and ACA Exchange plans, UnitedHealth Group has provided more specifics about their MA business.”

Andrews pointed to UnitedHealth’s recent earnings call, where the company said physician and outpatient care made up 70% of cost pressures so far in 2025, but that inpatient use had also picked up and was expected to drive more cost in the second half of the year.

He added that the reasons behind these spikes remain unclear.

“Virtually all of the insurers are reporting that the trends exceed the actuarial models for which they budgeted 2025,” he said. “Similarly, each has clearly stated that they will be more conservative in pricing for 2026, which means that premiums will likely increase at a higher rate than in the past few years.”

Where care is delivered matters as well.

“The site of care has a meaningful impact on each insurer’s medical loss ratio, which is why they prefer care to be delivered in the lowest acuity site that is clinically appropriate,” he said.

While insurers are reporting rising utilization, healthcare companies such as HCA (a major hospital chain) and Tenet (which operates surgery centers) have reported relatively flat patient volumes.

Looking ahead, it’s encouraged that policymakers will need to weigh access, cost and quality in a growing MA market.

As MA spending is projected to nearly double by 2031, study authors noted that lawmakers will face pressure to contain costs without reducing access or quality. This includes closely watching changes to supplemental benefits, plan offerings and the inclusion of high-cost drugs such as Ozempic in price negotiations.