Medicare Advantage Retiree Coverage: Understanding “EGWPS” Issue Brief

Over 18 million Medicare beneficiaries are enrolled in Medicare Advantage (MA) — one-third of all Medicare beneficiaries¹. Over three million of these MA beneficiaries are enrolled in MA retiree coverage — meaning, their employer chose to deliver their retiree health insurance via an employer plan within the MA program. This type of MA retiree coverage, officially known as an Employer Group Waiver Plans (EGWPs), makes up almost one-fifth of MA enrollment. It is an important option for retirees and employers, including state and local governments, industries, and unions.

This issue brief highlights the consequences of the CMS proposed policy change to over 3 million beneficiaries in MA retiree coverage.

This brief shows:

• Employers, state and local governments, and unions increasingly rely on MA to enable them to provide coverage to their retirees.
• Changes to MA retiree coverage would not only be disruptive to millions of beneficiaries nationwide; it would be especially impactful in regions of the country with a high concentration of MA retiree coverage.
• The proposed changes fail to capture the differences between MA retiree coverage and individual MA. Specifically, when MA retiree coverage is compared to individual MA Local PPOs, instead of the proposed comparison to all of individual MA, the bid-to-benchmark ratios are more comparable.