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Humana halves 2022 Medicare Advantage enrollment outlook

CEO says aggressive pricing from marketplace rivals has played a role in the new projections, shifting the focus to business-wide profitability.

Jeff Lagasse, Editor

Photo: FG Trade/Getty Images

Major health insurer Humana is drastically reducing its Medicare Advantage enrollment estimates for 2022 due to a large number of terminations during the last enrollment period, revealing in a new filing with the Securities and Exchange Commission that the former projection of 325,000 to 375,000 new MA members has been slashed to 150,000 to 200,000 new members.

Humana also expects group MA membership to be generally flat throughout this year, as it doesn't anticipate any large accounts will be gained or lost.

According to Bloomberg, the news caused Humana shares to plunge Thursday and dragged down rivals' stocks. Humana shares fell 21% as of midday, while UnitedHealth Group shares dipped about 5.4%. Clover Health Investments and Oak Street Health, newer companies focused on Medicare, saw shares dip 8.4% and 7.6%, respectively, upon the news.

At a Goldman Sachs conference Thursday, Humana CEO Bruce Broussard said aggressive pricing from marketplace rivals, which is likely unsustainable, played a role in the new projections, which will cause the company to focus more on business-wide profitability rather than margins in the individual Medicare business.

Meanwhile, for the Humana Premier Rx Plan (PDP), Humana now estimates a net membership decline of 125,000 members in 2022, compared with previous estimates of a loss of "a few hundred thousand members," citing better-than-expected sales of the Walmart Value plan and lower-than-anticipated terminations.

WHAT'S THE IMPACT?

The Centers for Medicare and Medicaid Services said that in 2022, MA is projected to reach 29.5 million people, compared with 26.9 million enrolled in a Medicare Advantage plan in 2021. 

For many seniors, MA is the preferred health insurance because of its low upfront monthly costs and added benefits. Medicare Advantage plans will continue to offer a wide range of supplemental benefits in 2022, including eyewear, hearing aids, both preventive and comprehensive dental benefits, access to meals (for a limited duration), over-the-counter items, fitness benefits and worldwide emergency/urgent coverage. 

In addition, the percentage of plans offering special supplemental benefits for chronically ill individuals will increase from 19% to 25%.

THE LARGER TREND

Insurers are expanding their Medicare Advantage offerings at a decent clip, with Humana announcing last fall it would debut a new Medicare Advantage preferred provider organization (PPO) plan in 37 rural counties in North Carolina in response to market demand in the eastern part of the state.

Around the same time, UnitedHealthcare, which already has significant market control with its MA plans, said it will strengthen its foothold in the space by expanding its MA plans in 2022, adding a potential 3.1 million members and reaching 94% of Medicare-eligible consumers in the U.S.

For the third straight year, health insurer Cigna is expanding its Medicare Advantage plans, growing into 108 new counties and three new states – Connecticut, Oregon and Washington – which will increase its geographic presence by nearly 30%.

Centene is also getting in on the act, expanding MA into 327 new counties and three new states: Massachusetts, Nebraska and Oklahoma. This represents a 26% expansion of Centene's MA footprint, with the offering available to a potential 48 million beneficiaries across 36 states.

CMS said in late September that the average premium for Medicare Advantage plans will be lower in 2022 at $19 per month, compared with $21.22 in 2021. However, Part D coverage is rising to $33 per month, compared with $31.47 in 2021.

Enrollment in MA continues to increase, CMS said. In 2022, it's projected to reach 29.5 million people, compared with 26.9 million enrolled in a Medicare Advantage plan in 2021.
 

Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com