A Brief Look at Medicare Market Share for Six Major Metro Areas
By Mark Farrah Associates - December 21, 2018
Medicare Advantage plans continue to be an attractive option for the rapidly increasing senior population. As of November 2018, total Medicare Advantage (MA) membership stood at over 21.6 million, representing approximately 34% of the 63.7 million Americans eligible for Medicare. Health plan enrollment and market share data are important metrics for health insurers to assess in order to identify opportunities and make better business decisions about products and services.
Companies not only look at their own market positions but also routinely analyze competitor membership to evaluate relative market share. Industry analysts often assess market share at the county or metropolitan statistical area (MSA) level in order to gain a more complete competitive picture of the market.
This brief presents an overview of Medicare market demographics and market share data, with a focus on health plan market position for six major metropolitan statistical areas (MSAs) in the U.S.
Competition and Market Share
For the purposes of this brief, MFA first looked at the competitive mix in the Medicare and Medicare Advantage markets through analysis of enrollment figures from the Health Coverage Portal™ and Medicare Business Online™ by metropolitan areas in the United States.
The following table presents the major metropolitan statistical areas (MSAs) with over a million seniors currently eligible for Medicare. These 6 areas represent the largest metropolitan markets in the country for companies offering Medicare Advantage plans.
Source: Medicare Business Online™, Mark Farrah Associates, presenting data from CMS enrollment reports
Seniors have a choice between coverage offered by original Medicare and Medicare Advantage (MA). While potential market size is an important metric, understanding the insurance preferences of seniors requires a closer look at enrollment within each area. How seniors are behaving as consumers varies greatly among the metropolitan areas. To shed more light on these differences, Mark Farrah Associates calculated the penetration rate for original Medicare & Medicare Advantage plans. Penetration rate is calculated by dividing the number of plan members by the number of those eligible for Medicare.
The penetration rate provides the overall market share which can be used to analyze seniors' choice between sticking with original Medicare and choosing a Medicare Advantage plan.