Exhibit 1

TraditionalFee-for-service

Medicare 70%

HMO 64%

Local PPO 23%

Regional PPO 8%

PFFS 2%Other 3%

NOTE: PFFS is Private Fee-for-Service plans, PPOs are preferred provider organizations, and HMOs are Health Maintenance Organizations. Other includes MSAs, cost plans, and demonstration plans. Includes enrollees in Special Needs Plans as well as other Medicare Advantage plans. SOURCE: MPR / KFF analysis of the Centers for Medicare and Medicaid Services (CMS) Medicare Advantage enrollment files, 2014.

Three in 10 Medicare beneficiaries are enrolled in Medicare Advantage plans, most of whom are in HMOs

Total Medicare Advantage Enrollment, 2014 = 15.7 Million

Distribution of Enrollment in Medicare Advantage Plans, by Plan Type, 2014

Exhibit 2

NOTE: Includes cost plans, MSAs, demonstrations, and Special Needs Plans, as well as other Medicare Advantage Plans.SOURCE: KFF analysis of the Centers for Medicare and Medicaid Services (CMS) Medicare Advantage enrollment files, 2005-2014, and Congressional Budget Office, “Medicare Baseline,” April 2014.

Medicare Advantage enrollment has increased rapidly and is projected to continue to rise

20242023202220212020201920182017201620152014201320122011201020092008200720062005

2524

232222

2120

1918

1716

1413

121111108

76

Actual Enrollment Projected Enrollment

Medicare Advantage Enrollment (in millions), 2005-2024

Exhibit 3

NOTE: Includes cost plans, MSAs, demonstrations, and Special Needs Plans, as well as other Medicare Advantage Plans.SOURCE: KFF analysis of the Centers for Medicare and Medicaid Services (CMS) Medicare Advantage enrollment files, 2014.

The share of Medicare beneficiaries in Medicare Advantage plans varies greatly across the country

U.S. Average Medicare Advantage Penetration= 30%

Louisville, 27%

Portland, 56%

Idaho Falls, 21%

Anchorage, 0%

Los Angeles, 43%

Topeka, 7%

Austin, 23%

Miami, 59%

Milwaukee, 34%

Baltimore, 10%

Portland, 24%

Tucson, 48%

Manhattan, 32%

Honolulu, 48%

0%-20% 21%-40% >41%

Exhibit 4

2006 2007 2008 2009 2010 2011 2012 2013 2014 2017

112% 112% 113% 114% 109% 110% 107% 104% 106% 101%

SOURCE: Medicare Payment Advisory Commission (MedPAC) Report to Congress, 2006-2014.

Medicare has been paying more for beneficiaries in Medicare Advantage plans than for those in traditional Medicare

TraditionalMedicareSpending

Actual Projected

Average Medicare Advantage Payments as a Percentage of Traditional Medicare Spending

Exhibit 5

UnitedHealthCare20%

Humana17%

BCBS17%

Kaiser Permanente

8%

Aetna7%

Cigna3%

Other national insurers5%

All other insurers23%

NOTE: Other includes firms with less than 3% of total enrollment. BCBS are BlueCross BlueShield affiliates and includes Wellpoint BCBS plans that comprise 4% of all enrollment (approximately 600,000 enrollees) in Medicare Advantage plans. Other national insurers includes approximately 428,000 enrollees across the following firms: Wellcare, HealthNet, Universal American, Munich American Holding Corporation, and Wellpoint non-BCBS plans . Accounts for merger between Coventry and Aetna in 2013; Medicare Advantage plans offered by Coventry covered 306,000 beneficiaries and Aetna plans covered 615,000 in 2013. Percentages may not sum to 100% due to rounding.SOURCE: MPR/Kaiser Family Foundation analysis of CMS Enrollment files, 2014.

Medicare Advantage enrollment is concentrated within a small number of firms and affiliates, 2014

Total Medicare Advantage Enrollment, 2014 = 15.7 Million

Kaiser Permanente

8%

Aetna7%

Other National Insurers

5%Cigna3%