Medicare Advantage still growing, but the growth is slowing
This year, Medicare Advantage enrollment grew by just 1.5 million, below the pace set in previous years.
Photo: Marko Geber/Getty Images
Medicare Advantage continues to grow, hitting record enrollment this year and increasing overall program participation by 5.5%, while adding 1.5 million beneficiaries. But according to data from Chartis, the pace of this growth is slowing.
In 2020, 2021 and 2022, Medicare Advantage enrollment grew by 1.9 million, 2.2 million and 2.3 million beneficiaries, respectively. This year, Medicare Advantage enrollment grew by just 1.5 million. While that's still significant growth, it does show evidence of a deceleration.
At the same time, original Medicare continues to decline, losing 339,000 enrollees this year – a significant but smaller loss than previous years. Special Needs Plans (SNP) enrollment accounted for two-thirds of total market growth. SNP enrollment is up 20% from 2022, driven by considerable D-SNP enrollment gains.
A total of 29.5 million beneficiaries are now enrolled in a Medicare Advantage plan, according to Chartis.
WHAT'S THE IMPACT?
This year, for-profit insurers account for 72.6% of all Medicare Advantage enrollment, up from 71.8% the year prior and 67.9% in 2019. This marks a 4.7 percentage point share increase over that period, and annual growth of 10.1%, found Chartis. Meanwhile, nonprofit plans continue to see share declines, although their enrollment is still growing.
For the first time in many years, nonprofit Blues plans notched a market share gain of 0.2 percentage point. While modest, this increase sits in stark contrast to remaining nonprofit plans, which saw a 0.8 percentage point share decline, continuing prior years' losses.
Conversely, for-profit United accounted for 55% of all new enrollment. In prior years, this hovered in the 30% to 40% range. Humana accounted for 23% of all new enrollment, meaning the two health plans combined represent four in five new enrollees nationally.
Start-up plans continue to grow, although their advances have slowed. Overall, start-up plans participating in Medicare Advantage notched 7% growth this year. This growth exceeds the market average, but pales in comparison to their prior years' annual membership growth of +25%. Their current share of the market now sits at 1.7%.
Three states and Washington D.C. saw enrollment declines. This is the first time in recent history that Chartis has seen enrollment declines in key states. Meanwhile, 15 states now boast Medicare Advantage enrollment rates at or exceeding 50%.
Plan options have reached an all-time high, but health plan competition is limited, data showed. Plan options for consumers have been growing more than 11% per year. This year, the average member had access to 43 different plan options, up from 24 in 2019 – a growth of nearly 80%. Despite this, at the county level competition in the market continues to deteriorate. Nearly 85% of counties are considered "highly concentrated."
Meanwhile, quality performance correlates to enrollment performance. Seventy-three percent of Medicare Advantage beneficiaries are enrolled in health plans receiving four-plus stars this year, down from 89% the year prior. Health plans that saw their quality rating increase realized 9.6% enrollment gains, despite only 3.5% growth for health plans that saw their ratings decline this year.
THE LARGER TREND
On February 1, the Centers for Medicare and Medicaid Services released the 2024 Advance Notice for the Medicare Advantage and Part D Prescription Drug Programs, in which CMS said MA plans are expected to receive a 1.03% increase in revenue.
However, three changes in the rate notice would, on average, cut MA rates in 2024 by 2.27%, AHIP president and CEO Matt Eyles said in a statement last week.
These three changes include: a 3.12% reduction, due to the MA risk model that accounts for the health status and demographic characteristics of enrollees; 1.24% lower quality bonus payments under the Medicare Star Ratings program; and increase benchmarks used to set maximum payment rates on average by 2.09%, which is less than half the growth rate in 2023 (4.88%) and well below the projected growth in per-enrollee Medicare costs (5%).
Eyles was responding to a Department of Health and Human Services statement called "Fact v. Fiction: Biden-Harris Administration is Strengthening Medicare; Private Industry Must Share Obligation to Deliver Quality Health Care for America's Seniors."
Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com
