Medicare beneficiaries living in more rural counties are enrolled in traditional Medicare and rely on stand-alone prescription drug plans (PDPs), according to recent analysis from KFF.

In fact, in 27 states, at least half of Medicare Part D enrollees living in the most rural areas are enrolled in stand-alone prescription drug plans. This includes 8 states with 75% or more of Part D enrollees in the most rural areas in prescription drug plans (Nevada, Alaska, Massachusetts, California, Kansas, Wyoming, Nebraska, and South Dakota).

Nationwide, 58% of beneficiaries living in rural areas are enrolled in stand-alone prescription drug plans in 2025. The remainder (42%) are enrolled in Medicare Advantage drug plans (MA-PDs).

KFF researchers analyzed 2025 Part D enrollment in Medicare’s stand-alone prescription drug plans and Medicare Advantage drug plans by geographic area nationally and at the state level. KFF researchers said limited participation of Medicare Advantage plans in rural areas was a factor.

In a separate analysis, KFF found that the share of Medicare beneficiaries who receive their healthcare coverage through traditional Medicare is higher in the most rural counties (58%) than in rural counties that border an urban area (48%) or counties that are within an urban area (44%).

Medicare covers about 68 million people in the United States. And since 2010, the share of Medicare beneficiaries receiving their Medicare benefits from private Medicare Advantage insurers has more than doubled, according to KFF.

More than half (54%) of Medicare beneficiaries are enrolled in Medicare Advantage plans. In 2024, the Medicare Advantage program included 5,678 plan options offered by 175 organizations and enrolled about 33.6 million beneficiaries, according to a March 2025 report from MedPAC, an independent agency that advises Congress about Medicare.

The Congressional Budget Office (CBO) projects nearly two-thirds of all Medicare beneficiaries will be in private plans by 2033.

According to MedPAC, the federal government in 2015 will pay insurers 20% more for Medicare Advantage enrollees than it pays for people in traditional Medicare, at a cost of $84 billion. This amounts to about $2,255 per beneficiary.

The Commission said these payments to Medicare Advantage plans help to fund supplemental benefits, which include coverage of non-Medicare services. Plans project using about 38% of these funds to reduce cost sharing for Medicare Advantage enrollees, 25% for non-Medicare services, and about 23% to enhance plans’ Part D benefit through lower premiums or reduced cost sharing. Additionally, about 6% of these payments are to reduce MA enrollees’ Part B premiums, and about 8% for administrative expenses and profit.

In its March 2025 report, the Commission said reforms are needed to improve Medicare Advantage plans, including reducing the level payments to plans

But earlier this month, CMS announced that payments to Medicare Advantage and Part D Prescription Plans would increase by 5.06% next year compared with the 2.23% increase that CMS had proposed under the Biden administration.

Mehmet Oz, M.D., appointed by President Donald Trump and confirmed by the Senate in March 2025 to lead CMS, has promoted Medicare Advantage. During his confirmation hearing, Oz endorsed Medicare Advantage but acknowledged that it costs more than traditional Medicare. He vowed to scrutinize Medicare Advantage, especially with regard to upcoding of services.

Oz’s focus on the coding of services echoes the Commission report. MedPAC also recommends replace the quality-bonus program, establish more equitable benchmarks, and improve data about patient encounters.