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Medicare Advantage Enrollment Grows
Gains Concentrated Among Major Players
Medicare Advantage enrollment grew 8.0% from September 2018 to September 2019, according to AIS’s Directory of Health Plans (see a complete month-by-month timeline below), continuing a trend of greater MA gains as more baby boomers, seeking more personalized benefits, age into Medicare. In advance of the Annual Election Period (AEP) starting on Oct. 15, CMS on Sept. 24 said it expects MA enrollment to reach new highs in 2020, growing about 10% to 24.4 million lives.
Growth this past year was concentrated among the largest payers in the MA space, with the top five experiencing enrollment gains of about 16% on average year over year (see breakdown below). The big winner was Aetna Inc., which took on its largest-ever MA expansion in 2019, adding its offerings to more than 350 new counties.
While still on top, market leader UnitedHealthcare’s post-AEP gains were smaller than the 400,000 to 450,000 members (excluding dual eligible Special Needs Plans) the company anticipated, instead adding only about 290,000 lives.
NOTE: All enrollment totals include dual eligible Special Needs Plans (D-SNPs) except where noted. AIS defines post-AEP enrollment as total MA membership as of February 2019.
The Mad Rush to Sell Private Medicare Plans to Seniors
Health insurers across the U.S. will race to enroll more seniors in lucrative government-backed Medicare plans this month, even as a roiling debate over the role of private companies in health coverage shapes the presidential race.
The plans, known as Medicare Advantage, are the private-sector, taxpayer-financed alternative to traditional Medicare. Selling them has become a crucial profit center for the insurance industry: Baby Boomers are aging into the program, propelling its growth, while at the same time health insurance products sold to people under 65 are facing pressure from all sides.
The private plans also sit squarely in the middle of the race for the presidency: Some candidates for the Democratic nomination, including Senators Bernie Sanders and Elizabeth Warren, have backed a proposal to do away with private health insurance across all markets. Last week, President Donald Trump signed an executive order aimed at bolstering Medicare Advantage, and said Democrats would upend the program.
In 2019, about 22 million people, or roughly a third of all Medicare enrollees, got their Medicare coverage through the private plans. For each person who signs up, the insurers collect a fee from the government. It was $11,545 on average this year, which adds up to about $254 billion. The Medicare Advantage enrollment period opens Oct. 15.
Insurers see it as a lucrative market they can’t afford to pass by. Medicare products are the biggest business at the biggest health insurance company, UnitedHealth Group Inc.’s insurance unit. Centene Corp. agreed to pay $15 billion this year for WellCare Health Plans Inc. in part to get access to the company’s large Medicare business. Startups like Clover Health, which has raised more than $900 million from investors including GV, Alphabet Inc.’s venture capital arm, are targeting Medicare customers with new technologies intended to deliver care more efficiently.
UnitedHealthcare will sell Medicare coverage in 100 new counties in 2020, reaching 90% of the eligible market. Humana Inc., which specializes in Medicare Advantage, will expand to 29 new counties. Humana Chief Executive Officer Bruce Broussard told investors in July that membership was growing at the fastest pace in a decade, and the company expects to add half a million members this year. Cigna Corp., which has a comparatively smaller Medicare business, is expanding to 37 new counties next year and projecting 10% to 15% average annual membership growth through 2025. CVS Health Corp.'s Aetna unit is expanding to 264 new counties in 2020.
Medicare is especially critical to insurers as their traditional business selling health plans to employers and individuals slows. A smaller percentage of the U.S. workforce is enrolled in employer coverage than two decades ago, according to data from the Kaiser Family Foundation, a nonprofit health research group, as the cost of those benefits rises faster than workers’ earnings.
“We all know that 11,000 Americans turn age 65 every day and then the percent of those that choose” Medicare Advantage is accelerating, Anthem Inc. Chief Financial Officer John Gallina said at a conference in June. He called it “a huge opportunity that we’ve missed in the past, that we now need to capitalize on.”
Anthem’s Medicare Advantage membership grew by 25% in the 12 months ending June 2019, far faster than any other category. Anthem is expanding to 77 new counties in 2020.
Seniors in traditional Medicare can go to any doctor or hospital that participates, as most do. Those who choose Medicare Advantage plans trade that freedom of choice for an insurance company’s more limited network. In exchange, they get extra benefits. Medicare Advantage policies often wrap in prescription-drug plans, vision and dental care. Many offer free gym memberships or fitness programs. They also cap members’ total out-of-pocket costs. In traditional Medicare, seniors have to buy policies known as Medicare supplement or Medigap plans to limit their out-of-pocket expenses.
Starting in 2019, a federal rule change permitted Medicare Advantage plans to offer other perks like transportation and meal delivery. The goal is to address so-called social determinants of health, the many non-medical aspects of people’s lives that affect their well-being. Plans will offer a greater variety of those benefits in 2020.
Some Cigna plans in Texas will pay for air conditioners for the first time next year. Anthem will offer pest-control services, because vermin can affect chronic health conditions such as asthma. Carriers are also testing benefits like adult day care; home safety improvements, like grab bars, to prevent falls; and in-home help for people who need assistance bathing or dressing.
“We actually find a lot of beneficiaries are living in environments that really need support and help,” said Martin Esquivel, vice president of Medicare product management at Anthem.
Medicare doesn’t provide those things in its traditional fee-for-service program, partly because of the risk of inappropriate payments or fraud. In Medicare Advantage, the government’s payment to plans is limited, so that risk is managed by the plans.
The growth of Medicare Advantage shows demand for private managed-care plans exists even when seniors have a purely public option. “No one’s forcing them to do this,” said Dan Mendelson, founder of consultant Avalere Health and a partner at private equity firm Welsh Carson Anderson & Stowe. Seniors are increasingly comfortable giving up some choice of doctors in exchange for Medicare Advantage’s perks, he said. “It’s the choice that makes it really remarkable, that seniors are choosing this.”
While two-thirds of Medicare enrollees choose to stick with the original program, that share is declining. Mendelson said Medicare Advantage enrollment has grown by 8% annually in recent years. At that pace, more than half of Medicare members will be in private plans by 2025, he estimates.
Many people can get Medicare Advantage for no additional premium beyond what they pay for traditional Medicare. The average monthly premium for Medicare Advantage is $23 in 2020, down from $26.87 the prior year, according to the Centers for Medicare and Medicaid Services. It’s at the lowest level since 2007.
Plans have historically been paid generously. A decade ago, Medicare paid private plans 14% more than it would have spent for the same beneficiaries in the traditional program, according to the Medicare Payment Advisory Commission, known as MedPAC, which counsels Congress on Medicare policy. That helped finance additional benefits that enrollees found attractive, but it raised the program’s costs and put little pressure on plans to deliver more efficient care. The 2010 Affordable Care Act lowered those payments. They’re now about 1% above traditional Medicare payments, according to MedPAC.
People who choose to enroll in Medicare Advantage plans also typically have lower health spending before they enroll, compared with similar people in traditional Medicare, according to an analysis by the Kaiser Family Foundation. That means the way payments are set “may systematically overestimate expected costs of Medicare Advantage enrollees,” the Kaiser researchers wrote. Plans have been also faulted by government watchdogs for improperly denying care.
Medicare Advantage plans pay about 86% of their premium revenue out in medical claims, a similar proportion to other health insurance products, according to a separate Kaiser Family Foundation report. But the opportunity to profit is higher. Partly because Medicare beneficiaries use more medical care than younger people, there’s more money at stake for each member. Gross margins in Medicare Advantage – the difference between premiums collected and claims paid, before counting administrative costs – are about $1,600 per enrollee, roughly double the value in commercial plans, according to Kaiser’s analysis.
“This appears to be a fairly profitable market,” said Tricia Neuman, director of the Kaiser Family Foundation’s program on Medicare policy. The group sees more carriers enter the market than exit each year. “If it weren’t profitable, they wouldn’t be doing it,” Neuman said.
“We had no idea how hard it would be, how long it would take, the infrastructure we’d have to develop,” said Vivek Garipalli, chief executive officer of Clover Health. The company has about 42,000 members, mostly in New Jersey.
Other new technology-focused insurers are trying to break into the market. Oscar Health announced its first Medicare plans this year. Startup Devoted Health, which is led by former Obama administration officials, raised $360 million to launch its Medicare Advantage plans in 2019.
Those companies are betting that technology can deliver better care more efficiently, by using data to help physicians manage patients with chronic conditions, for example. Medicare Advantage is an ideal proving ground to test that idea, because plans make money if they can deliver savings without compromising quality.
“Health care has effectively had zero productivity gains over the last 20 years,” said Bob Kocher, a partner at venture firm Venrock. The firm backed Devoted Health and Kocher served as the company’s chief medical officer for a year. “There should be a lot of pent-up opportunity here to apply technology to make health care much more productive, and that would also make health care more affordable.”
--With assistance from Hannah Recht.
This article was provided by Bloomberg News.
By Taylor McDonald – CSG Actuarial – May 7, 2019
CSG Actuarial, with information from the NAIC and other sources, reports total earned premiums in the Medicare Supplement market in 2018 totaled $32.4 billion, a 4.9% increase over 2017. The total Med Supp lives covered in 2018 increased to 14.05 million, up 3.9% from 2017. The top 12 carriers in terms of 2018 Medicare Supplement premiums were:
The 2018 overall Med Supp market loss ratio of 79.0% reflects a continued trend in the market of the overall loss ratios creeping back up towards “Pre-Modernized” levels of around 80%.
A number of Democratic proposals call for eliminating private health insurance and replacing it with a universal Medicare plan, claiming it would help reduce administrative inefficiencies in the health-care system. Most recently, Sen. Bernie Sanders of Vermont unveiled a bill that would create a government-run system to provide health insurance for all Americans. Freshman Rep. Alexandria Ocasio-Cortez is pushing a similar plan.
Wichmann, who rarely discusses politics, told investors on a post-earnings conference call Tuesday such measures would "surely jeopardize the relationship people have with their doctors, destabilize the nation's health system and limit the ability of clinicians to practice medicine at their best."
"And the inherent cost burden would surely have a severe impact on the economy and jobs — all without fundamentally increasing access to care," he added.
The executive noted that health costs have grown less quickly than overall inflation for 16-straight months, saying "it has lessened considerably due to better management of price inflation and earlier and more effective management of care in lower cost settings."
Despite concerns from UnitedHealth, public support for a single-payer system has grown. According to a survey from the Kaiser Family Foundation last month, 56% of respondents supported a national health plan in which all Americans would get insurance from a single government plan, versus 39% who said they oppose it.
Health care has been the worst-performing sector in the stock market this year, rising by just 4.17% as of Monday's close, significantly lagging the broader market indexes. The Dow Jones Industrial Average is up 13.35% over the same period, and the S&P 500 is 16.12% higher.
The biggest decliners have been from insurers, which are under threat from "Medicare for All" proposals. Investors are also watching the Trump administration's legal challenge to former President Barack Obama's signature health insurance law, the Affordable Care Act.
A federal appeals court in New Orleans said last week that it will hear arguments in July on a lawsuit backed by President Donald Trump to overturn Obamacare. Dismantling the health-care law would lead to 32 million more uninsured people in the U.S. by 2026, according to an estimate from the Congressional Budget Office.
Earlier Tuesday, UnitedHealth reported first-quarter earnings and revenue that beat Wall Street's expectations. It was driven by strength in its pharmacy benefit management business and higher enrollment for its health plans.
The industry bellwether, which is the first health insurer to report quarterly results, also raised its full-year adjusted earnings forecast to between $14.50 and $14.75 per share from its prior projection of $14.40 to $14.70 a share.
Image: Justin Sullivan | Getty Images
By Shelby Livingstone – ModernHealthCare – April 3, 2018
UnitedHealthcare and the American Medical Association said Tuesday they want to expand the set of ICD-10 diagnostic codes to include more specific diagnoses related to a person's social determinants of health.
The hope is that these codes would allow clinicians to document patients' social determinants in a standardized way, which would allow them to better tailor care plans or refer patients to community organizations that could meet those social needs.
"If someone has a transportation barrier and they are unable to get to their doctor's appointment or to pick up their prescription, today in the ICD-10 codes, there isn't a way to diagnose that," said Sheila Shapiro, senior vice president for national strategic partnerships in UnitedHealthcare's clinical services team. "There is no common way for the system to communicate around not only that barrier, but the solutions that can be brought to assist that individual."
Today, a clinician may use medical code that identifies a patient as low-income, but that's as granular as it gets. UnitedHealthcare's proposed set of codes would more specifically identify the person as unable to pay for transportation for medical appointments of prescriptions, for instance.
That would then tell the healthcare provider they should order prescriptions mailed to the home or possibly provide some form of transportation, explained Dr. Tom Giannulli, chief medical officer at the AMA's Integrated Health Model Initiative, which is supporting UnitedHealthcare's proposal.
Expanding diagnostic codes related to social determinants of health is another step in the healthcare industry's journey to address those factors outside of the doctor's office that often have a greater impact on outcomes than clinical care. In recent years, social determinants have become a buzzword in the healthcare industry as insurers and providers have looked for new ways to control health spending. Now insurers and health systems are moving beyond initial pilot projects to address those factors in a sustainable, scalable way.
The existing ICD-10 family of diagnostic and procedural codes includes 11 codes that identify social and environmental barriers to a patient's care, but they are broad categories. UnitedHealthcare's proposal would add 23 more codes to that list. Some of those codes would indicate a patient's inability to pay for prescriptions, inadequate social interaction, or fears about losing housing.
Trenor Williams, the founder of Socially Determined, a company that uses data to help organizations build programs to address their patients' social needs, said expanding the codes to include more specific diagnoses is a good start and an opportunity to better document social risk factors among a population.
It also could prompt more discussion among stakeholders about providing reimbursement that is risk-adjusted based on a patient's social determinants, Williams said. Some groups, including the National Academy of Medicine and the Medicare Payment Advisory Commission, have explored the feasibility of adjusting Medicare payments for socioeconomic status. Congress has also commissioned reports on the subject. But so far Medicare payments remain unadjusted for social factors.
UnitedHealthcare presented its recommendation to expand the codes at the ICD-10 Coordination and Maintenance Committee meeting in March. Following a 60-day comment period, the committee will determine whether to act on UnitedHealthcare's recommendation in the early summer. The new codes would be available to use as early as 2020, if the committee approves them, Shapiro said.
Likely return of the health insurance tax to impact MA profits
By Susannah Luthi – ModernHealthCare – March 1, 2019
Congress appears unlikely to delay the health insurance tax next year. If that happens, Medicare Advantage plans would see the biggest impact, analysts and insurers say.
On Wednesday, a bipartisan group of House lawmakers introduced a suspension of the tax, known as the HIT, through 2021. The tax was in place for 2018, suspended in 2019 and is due to take effect again in 2020.
But as House lawmakers unrolled their proposal for another delay, senior congressional staff from both chambers and parties said they don't think it's likely to move before insurers start setting their ACA exchange rates next year.
One senior GOP aide said it's unclear how any of the smaller tax delays will get done, "let alone the big spending health care extenders."
Some insurance executives have been bracing for the possibility they won't get their delay. But they also haven't given up on urging Congress to step in and eliminate the tax or continue the moratorium from 2019.
In a quarterly earnings call in January, UnitedHealth Group CEO David Wichmann warned that the return of the HIT would increase healthcare costs by a total $20 billion for 142 million people.
"That causes the average senior couple to see their premiums raised by $500 per year and for families with small business coverage by about the same amount, around $480 or so per year," Wichmann said. "Our view is that outcome is unacceptable because healthcare already costs too much."
S&P analyst Deep Banerjee said a return of the HIT wouldn't necessarily affect insurers' profit margins for Affordable Care Act individual market exchange plans, where companies can pass the fee on to their customers through higher premiums.
However, he said, insurers are less likely to take this approach in the more lucrative Medicare Advantage market where competition between plans is so tight they don't want to risk losing enrollees.
The push for the HIT delay comes after the eight largest publicly traded insurance companies reported more than $21 billion in net income for 2018 on top of revenue of $718 billion, according to analysis by Modern Healthcare. Despite the HIT being in effect in 2018, insurers' earnings benefited from low medical cost trends, lower utilization of healthcare services, declining pharmacy costs and a lower tax rate, according to a report released Thursday by A.M. Best.
In a sign that Medicare Advantage insurers are worried about the HIT's potential impact on their markets, Humana CEO Bruce Broussard told investors earlier this month the HIT moratorium allowed Humana and the rest of the industry to make significant investments in benefits and drive better health outcomes, but its return will reverse that. "The return of the HIF in 2020 will negatively impact seniors across the nation in the form of reduced benefits and/or higher premiums," he said.
Broussard, during the company's first earnings call for 2019, said this is driving their lobbying push.
"We are working with partners to urge Congress to take legislative action to repeal the HIF for 2020 and beyond, recognizing that there is a sense of urgency given the rapidly approaching deadline for submitting bids for 2020 Medicare Advantage offerings," Broussard said.
On the flip side, UnitedHealth CFO John Rex in January indicated that the company is so diversified it's unlikely to feel a financial squeeze, warning that instead the tax would add to the cost burden of the insured.
"I'd be remiss to diminish $2.6 billion of our customers' funds just having been paid for the health insurance tax," Rex said. "That's still a very significant number for any company, I would say, and a burden for our customers."
In terms of the HIT's impact on premiums, Oliver Wyman Actuarial Consulting last year projected a likely increase of just over 2% annually. The firm predicted the biggest increase for Medicare Advantage — $241 per MA enrollee versus a $196 increase per person in the ACA individual market.
A senior Democratic aide said while there's been preliminary discussions on the staff level, the legislation doesn't seem to have a good chance of a House floor vote anytime soon.
And Rep. Earl Blumenauer (D-Ore.), who sits on the House Ways and Means Committee's tax policy and health panels, said this is partially because all the insurance taxes are figuring into the committee's broader discussion over where they want to go with taxes.
"For me, I don't think it's a good idea to be spun out on individual details until we've heard the big picture," the congressman told Modern Healthcare.
"There's a big agenda in terms of trying to deal with tax issues, and I think you don't want to deal with these things piecemeal until we find out where we're at, because they all interrelate," he added.
Reps. Ami Bera (D-Calif.), Josh Gottheimer (D-N.J.), Jackie Walorski (R-Ind.) and Kenny Marchant (R-Tex.) led the House proposal to delay HIT through 2021. Sens. Cory Gardner (R-Colo.), Jeanne Shaheen (D-N.H.), John Barrasso (R-Wyo.), Doug Jones (D-Ala.), Tim Scott (R-S.C.), and Kyrsten Sinema (D-Ariz.) led the Senate version in January.
Walgreens Partnership Boosts Humana's Medicare Enrollment
By Bruce Jepsen – Forbes – February 7, 2019
Humana says its joint venture with Walgreens Boots Alliance is helping boost enrollment in Medicare Advantage, the fast-growing privately administered health coverage for U.S. seniors.
Humana reported a 9% increase in Medicare Advantage membership the health insurer attributed to physicians at more than 230 clinics including two sites inside Walgreens stores. It’s the latest sign showing the early stages of a joint venture between Humana and the nation’s largest drugstore chain is working and could be expanded beyond a pilot in the Kansas City market.
"Our 233 owned, joint ventured and alliance clinics, the majority of which are payer agnostic, including our two 'Partners in Primary Care' clinics inside Walgreens stores experienced positive results in the annual election period," Humana CEO Bruce Broussard told analysts Wednesday during the company's fourth quarter earnings call. "Humana MA membership grew over 9% in these clinics in the (annual election period) excluding the more mature Conviva clinics."
Humana, which has invested hundreds of millions of dollars acquiring and partnering with medical care providers in recent years, said its relationships helped it take Medicare Advantage market share away from rival insurers. Humana said it expects 2019 individual Medicare Advantage membership growth of “375,000 to 400,000 members, representing 12% to 13% growth,” the insurer reported Wednesday as part of its fourth-quarter 2018 earnings release.
Walgreens and Humana last year opened “senior-focused primary care clinics” inside drugstores as a way to complement Walgreens pharmacy services and Humana’s Partners in Primary Care centers that opened last year in Kansas City. The effort is designed in part to keep people out of the more expensive hospital setting and make sure Medicare patients have their care more closely monitored by Walgreens pharmacists and physicians in Humana’s health plan networks.
The two companies think they can do a better job of reaching patients who visit Walgreens retail locations and making sure they get better care upfront before they get sick. When the partnership was announced, Walgreens and Humana called it “a senior-focused neighborhood approach to health that brings together primary care, pharmacy, in-person health plan support and other services for Medicare beneficiaries.”
The Medicare Advantage growth is key for Humana, which is in a competitive battle with rival insurers like Aetna, UnitedHealth Group and Cigna, looking to tap into a market of more than 10,000 baby boomers aging into the Medicare population every day.
Medicare Advantage plans contract with the federal government to provide extra benefits and services to seniors, such as disease management and nurse help hotlines, with some even providing vision and dental care and wellness programs. CMS is changing regulations to allow Medicare Advantage plans to provide broader coverage in the future, which is also expected to boost enrollment. L.E.K. Consulting has projected Medicare Advantage enrollment will rise to 38 million, or 50% market penetration by the end of 2025.
Humana ended 2018 with 3.06 million individual Medicare Advantage members, which was up 7% from 2.86 million as of Dec. 31, 2017.
Industry support gathers for expanding MA benefits in 2020
By Amy Baxter – HealthExec – February 5, 2019
Since CMS proposed expanding supplemental benefits for Medicare Advantage for the 2020 plan year at the end of January, several industry groups have voiced their support, seeing opportunities to improve care for individuals with chronic illnesses and lower costs.
The proposal allows MA plans––which are private health insurers that contract with Medicare to provide all healthcare services under original Medicare––more flexibility to design benefits centered around specific chronic conditions. CMS previously expanded supplemental benefits for the 2019 plan year to include services such as in-home care, which can keep older adults out of acute care settings and improve health and wellness.
The new expansion, if finalized, would enable plans to cover more benefits that directly address social determinants of health, such as home modifications, transportation and meals. For people with chronic conditions, addressing these issues can prevent or delay more serious health events. The benefits would also extend to those affected by opioid addiction seeking treatment.
“Meeting the needs of patients with chronic disease requires a team-based approach to care,” president and CEO of the American Medical Group Association (AMGA), Jerry Penso, MD, MBA, said in a statement following the proposal. “This also may include services that traditionally were not thought of as healthcare-related, including ones that deal with socioeconomic barriers to care. That is why AMGA is supportive of CMS’ effort to provide flexibility in how Medicare Advantage plans in order to help support the total needs of a patient by, for instance, ensuring their nutrition and transportation needs are met.”
The expanded benefits could help attract more Medicare beneficiaries to MA plans if plans include them in their 2020 bids. Over the next several years, MA enrollment is expected to significantly rise. In 2019, enrollment is anticipated to reach an all-time high of 22.6 million, or 36.7 percent of all Medicare beneficiaries, according to CMS.
With this in mind, Matt Eyles, president and CEO of association group America’s Health Insurance Plans (AHIP), is taking a close look at the proposal and its potential impact.
“We appreciate the ongoing bipartisan commitment from both Congress and the Administration to protect the Medicare Advantage program — ensuring its long-term stability, so that it can continue to improve seniors’ access to quality, affordable health care that meets their individual needs,” he said in a statement. “We will continue to review the advance rate notice carefully and look forward to participating in the comment period.”
Better Medicare Alliance, which advocates for MA through healthcare policy and research, also plans to comment on the proposal and voiced stronger support for the expansion of the supplemental benefits to people with chronic illness and those affected by opioid addiction.
“We are encouraged by CMS’ proposals to allow Medicare Advantage plans and providers greater flexibility to meet the needs of chronically ill beneficiaries with the expansion of supplemental benefits,” BMA President and CEO Allyson Y. Schwartz said in a statement. “Evidence has shown that beneficiaries in Medicare Advantage experience lower rates of opioid use. CMS’ proposals will build on this success by increasing access to effective treatments for opioid addiction and promote non-opioid therapies available in Medicare Advantage.”
Health insurers are reporting unprecedented growth in the number of seniors flocking to private Medicare Advantage plans amid talk of a single payer government-run approach that could uproot such coverage.
The same week U.S. Sen. Kamala Harris (D-California) made news with her support for “Medicare for All,” insurers Anthem and Cigna reported strong growth from Medicare Advantage, private coverage sold via contracts with the federal government.
Anthem’s Medicare Advantage enrollment jumped by 35% to more than 1 million at the end of 2018 compared to 746,000 in the fourth quarter of 2017, the operator of Blue Cross and Blue Shield plans reported last week. “Our individual Medicare Advantage business is on track to achieve our mid-double digit growth target,” Anthem CEO Gail Boudreaux told analysts during the company’s fourth quarter earnings call last week. “In total, we estimate our Medicare Advantage growth will exceed 20% by the end of 2019.”
Meanwhile, Cigna reported Friday that its Medicare Advantage enrollment was up one percent to 436,000 from 432,000 and UnitedHealth Group ended 2018 with 4.9 million Medicare Advantage enrollees, which was up nearly 12% from 4.4 million at the end of 2017. Other insurers including Aetna, which is now part of CVS Health, are expected to report higher Medicare Advantage enrollment later this month after these plans expanded into new markets.
The industry is tapping into a market of more than 10,000 baby boomers aging into the Medicare population every day . The insurers that have reported 2018 earnings thus far are reporting overall industry growth that’s slightly ahead of the projected record growth the Centers for Medicare & Medicaid Services (CMS) predicted for Medicare Advantage last fall. “We completed a strong Medicare Advantage enrollment season . . . and are on track to achieve 2019 growth within the 400,000 to 450,000 range of expectations,” Steve Nelson, CEO of UnitedHealthcare, UnitedHealth’s insurance business told analysts two weeks ago.
Medicare Advantage plans contract with the federal government to provide extra benefits and services to seniors, such as disease management and nurse help hotlines, with some even providing vision and dental care and wellness programs. CMS is changing regulations to allow Medicare Advantage plans to provide broader coverage in the future, which is also expected to boost enrollment. L.E.K. has projected Medicare Advantage enrollment will rise to 38 million, or 50% market penetration by the end of 2025.
As seniors flock to Medicare Advantage, analysts say it’s going to make it difficult for Democrats on the presidential campaign trail to support a Medicare for All approach that would bring an end to the private insurer’s role.
The insurance industry worries most about so-called “single payer” forms of health insurance that would conceivably replace the private insurer’s role with a government-administered form of coverage. U.S. Sen. Bernie Sanders of Vermont has espoused the single payer approach for years but the Medicare for All Act of 2017 that he, Harris and others supported does mention “the ability to enroll in a Medicare Advantage plan.”
America’s Health Insurance Plans, the health insurance lobby that includes Anthem, Cigna and other insurers that sell Medicare Advantage, said Americans don’t want a “a one-size-fits-all health care system.”
“Today, health insurance providers deliver coverage that is working for hundreds of millions of Americans – including 180 million Americans who are covered through an employer, 20 million covered through Medicare Advantage, 55 million covered through Medicaid managed care, and 20 million who buy their own coverage,” AHIP spokeswoman Kristine Grow said.
”The vast majority of these 300 million Americans are satisfied with their existing coverage," Grow added. "One of the reasons they like their coverage is it provides them with choice and control. Health care is personal – all Americans are unique individuals with different health care needs depending on their stage of life, where they live, their income and resources, and physical and mental health. People should be able to get the care they need, when they need it, at a cost they can afford.”