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Medicare Advantage Growth Continues

By March 31, 2015Commentary

There are about 54 million Medicare-eligible persons in the United States and its territories.  As of March 2015, 17.3 million were enrolled in Medicare Advantage, according to a recent Mark Farrah Associates report.  (MFA Report)   That is over 30% of the eligible population.  Membership in MA plans increased by 1.3 million, or 8%, on a year-over-year basis, excellent growth considering concerns about reimbursement.  The top ten plans account for 67% of membership, with UnitedHealth Group leading the way with 3,448,000 members, 8.5% growth from March 2014 and a 20% market share.  Following were Humana with 3,181,00, 13.2% growth and an 18.4% share; then Kaiser at 1,295,000 enrollees, 6.95 growth and 7.5% share; Aetna with 1,251,000, a 13.9% increase and a 7.2% market share; Anthem, the only leader to show a decline, with 582,000 enrollees, a 12.5% decrease and only a 3.4% share, and lastly, Cigna at 496,000 members, 9% growth and a 2.9% share.  Most of these Medicare Advantage members enrolled individually, but about 18% came through groups, as employers see MA as a way to control health spending on older employees or retirees.  Most of these members, 62%, were in an HMO plan design and another 31% were in PPO designs.  There was a large increase in dual-eligible enrollment, up to 300,000 people from only 9,000 in 2014, largely because a number of states started new initiatives to place most of their Medicaid/Medicare population into managed care plans.  Overall, very significant member and revenue growth opportunities seem to exist for MA plans, and as large number of people become eligible for Medicare in the next decade, many have been in health plans for most of their lives and will be comfortable with the MA concept.  Within a few years Medicare Advantage could account for 50% or more of Medicare beneficiaries and program officials will have to consider whether the fee-for-service side is really worth hanging onto.

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