23 January 2022 |

Medicare Advantage’s Advantage

By Jared Dashevsky

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Medicare Advantage (MA) plans saw an 8.8% increase in enrollment this year, totaling 28.5 million MA beneficiaries. MA enrollment is growing around 10% per year and the Congressional Budget Office projects the share of MA enrollees will surpass that of Original Medicare beneficiaries by 2030.

Who’s in the (MA)rket? 
Many incumbent insurers and startups want a piece of the $412 billion MA market. The largest players include: 

  • UnitedHealth Group—who doubled its profit to $4.2 billion last year—leads the MA space with 7.9 million members, an 11% increase from last year. 
  • Humana leads right behind UHG with 5.1 million members. The insurer frightened the market earlier this month after slashing its MA enrollment projections in half because of “very aggressive” competition (see below). 
  • CVSAnthemKaiser Permanente and Centene follow behind Humana, and all saw increases in MA enrollment, with Centene seeing the greatest year-to-year growth of 29% to 1.4 million enrollees. 
  • Cigna is last among the above insurers with 553,000 enrollees and negative growth last year.

Venture-backed startups in the MA space include Alignment HealthcareClover HealthDevoted HealthOscar Health and Bright Health. While these startups’ MA enrollees make up only 1% of the total MA market, their MA membership is growing fast with a 39% compounded annual growth rate.

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MA enrollees made up 35% of all Medicare beneficiaries in 2018 and now make up 44%. MA is attractive to both payers and patients: insurers make a lot of money per patient (over $1,000/patient/month), and beneficiaries get extra health benefits not covered by Original Medicare like vision, hearing and dental health. The writing is on the wall: The MA market is hot and is growing fast.