Find out who is dominating the Medicare Advantage market this year

Geographic expansion wasn’t the only way the big insurance companies used to increase Medicare Advantage enrollment, Ellis said.

Ellis said Cigna and Humana have complained that competitors have underpriced Medicare Advantage plans and cut their market share this year. Prices are difficult to track because they vary from county to county, making it difficult to determine which insurers can strategically set premiums at low rates, he said.

“This is not a sustainable strategy, and it will worry us more than slowing growth in general,” Ellis said. “To the extent that these big insurers continue to serve, benefit from, and support what they’ve been doing for a while, I think margin pricing will benefit them.”

Centene received the largest number of Medicare Advantage beneficiaries, increasing enrollment by 12.9% to 1.2 million.

This year, Centene expanded its footprint to 327 new counties and three new states. The insurer also consolidated its Medicare brands under WellCare, which Centene acquired for $17 billion in 2019. The company owns almost 4% of the Medicare Advantage market.

UnitedHealthcare also continued to dominate the market and increased its membership by 5.2% month-on-month to 7.9 million.

UnitedHealth Group subsidiary expanded to 276 new counties this year and now controls nearly 28% of the market. The lion’s share of new policyholders came from local carriers or from Humana. UnitedHealthcare will reach up to 800,000 new members this year, with about 75% moving from individual and group Medicare Advantage plans and the rest from Medicare-Medicaid plans for people with special needs.

Aetna’s membership grew faster than the market as a whole and saw a 4% increase in subscribers to 3 million. Subsidiary CVS Health expanded its Medicare Advantage footprint to 83 new counties and began offering Medicare-Medicaid plans for individuals with special needs in Arkansas, Colorado, Delaware, and Indiana. Aetna currently covers almost 11% of Medicare Advantage members.

Aetna launched its first CVS-branded health plan this year, and CVS Pharmacy’s nearly 10,000 retail stores have likely helped increase membership, said Ari Gottlieb, director of A2 Strategy Group. “This shows that placing agents and brokers in stores frequented by older people can actually encourage registration,” he said.

Anthem followed a similar tactic, partnering with Kroger in Atlanta, Louisville, Kentucky, Cincinnati and southern Virginia, an arrangement that gives policyholders access to 2,300 pharmacies and 200 grocery chain clinics. However, at the time of enrollment this year, Anthem was underperforming in the Medicare Advantage market.

“It was a competitive market. It remains a competitive market,” Anthem CEO Gail Boudreau told investors last quarter.

Cigna is the only major commercial insurer to end its enrollment period with fewer Medicare Advantage policyholders than a year earlier.

Humana saw slower enrollment growth after a conservative margin estimate in 2022, according to a Bank of America report. The report states that Humana and UnitedHealthcare are losing customers to each other over time.

Unlike Humana, Cigna and Alignment Healthcare, which cite competitors’ aggressive pricing while shrinking their market share, UnitedHealthcare does not believe that new entrants have made the market more competitive.

“The MA market has been highly competitive for a number of years, and I don’t see a significant increase in competitiveness in 2022,” Tim Noel, CEO of UnitedHealthcare’s Medicare and Pensions business, told investors in the fourth quarter. “The trend of increasing the number of participants [and] the best benefits were indeed perennial. We think this trend is very good for older people and also very good for the overall growth of the Medicare Advantage industry.”

Insurtechs Devoted Health and Clover Health have grown membership faster than the overall market. Devoted Health has credited referrals from providers, while Clover Health claims its wide networks have attracted customers. Both companies deny underpricing their products and say big insurers are cutting their market share.

In addition to startup insurers, Blue Cross and Blue Shield plans have increased their investment in Medicare Advantage over the past five years, Gottlieb said. For example, during open enrollment, Blue Cross and Blue Shield of North Carolina membership increased by 14.4% to nearly 82,000 members.

Gottlieb said carriers Blue Cross and Blue Shield have not traditionally focused on Medicare Advantage but have been making forays as the market continues to grow faster than other lines of business. These companies have the ability to shift their large commercial, individual, and Medicaid customer bases to Medicare Advantage members as insurers mature. This gives them an edge over start-up insurers and national insurers, who may not have relationships with local suppliers and brokers, he said.

“How do they use their sales book to convert people as they age into Medicare?” Gottlieb said. “To the extent that they can create a seamless offering, they have a huge opportunity.”

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