OBJECTIVES: With the implementation of Medicare Part D, managed care plans have aggressively marketed their offerings, potentially expanding the proportion of beneficiaries enrolled in Medicare managed care, known as Medicare Advantage (MA). Growth in MA penetration has potentially important implications for both patients and providers, yet has received little attention since Part D went into effect. Our objective was to determine the impact of Medicare Part D on MA enrollment. METHODS: State-level data from the Centers for Medicare and Medicaid Services (CMS) were used to calculate overall Medicare enrollment (including dual eligibles), enrollment in managed care plans, and enrollment in MA plans with drug coverage (MA-PDs) and stand-alone prescription drug plans (PDPs) from January 2003 – June 2006. States were classified as having low, medium, or high penetration based on tertile of penetration for the first quarter of 2003 (1Q03). The effect of Part D on managed care enrollment penetration in states with low, medium, and high penetration was assessed using linear regression. RESULTS: Nationwide, MA penetration increased from 14.0% in 4Q05 to 15.3% in 2Q06. MA penetration significantly increased following the implementation of Part D, but only in states which had low Medicare managed care penetration prior to Part D (p<0.05). CONCLUSION: New MA enrollees living in areas that historically had little experience with managed care may face interruptions in health care or difficulties accessing care, at least initially. CMS should carefully monitor the health care patterns of new MA enrollees to ensure that beneficiary health is not compromised.