Medicare’s health care delivery system continues to evolve toward the Medicare Advantage program, according to a recent report by Mark Farrah Associates on enrollment. (MFA Report) The Medicare Advantage arm of the program contracts with health plans and pays them a flat monthly premium. The plans generally provide better benefits than does the fee-for-service branch of Medicare. An annual open enrollment period is held from October 15 to December 7 each year. The results from the 2016 AEP are now available, and indicate that enrollment grew 7.6%, up 1,389,665 members to a total of 19,593,341, or 34% of all Medicare beneficiaries. Every year in recent years MA enrollment has crept up a point or two as a percent of total eligibles. Because new beneficiaries have generally spent much of their adult lives in a health plan, they are comfortable with the Medicare Advantage concept, so it is not hard to imagine that within five to ten years MA will cover half of beneficiaries, and that is without changes that the current Administration may enact that encourage further health plan growth. This change impacts providers and should push CMS to rethink aspects of its overall regulation of Medicare.
Four large health plan firms dominate MA. UnitedHealth Group has 4.6 million members, Humana has 3.3 million, Aetna has 1.46 million and Kaiser has 1.42 million. The market is fairly concentrated, as the top ten companies account for 68% of all MA enrollees. These companies collectively had an 8.7% enrollment gain for 2017 and the largest ones tended to increase their market share. UnitedHealth added over 800,000 enrollees, growing 22%, while Humana added 123,000 for a meager 3.9% growth rate. Aetna grew 8.2% and Anthem, which is a surprisingly modest MA participant, jumped 10.3%. Cigna, which is under CMS sanctions forbidding it from adding new members, lost 20% of its members. About 20% of MA enrollment actually comes from employer group plans, primarily for retirees, and UnitedHealth dominates this subgroup. Medicare/Medicaid covered persons, or dual eligibles, are about 390,000 of the MA population. MA enrollment increased in every state; with Florida having the largest gain at 123,000 members, with Texas and Alabama also experiencing 100,000-plus growth in enrollees. While MA is alive and well, there are potholes. A number of plans face investigations over risk-scoring practices and MedPAC and other groups have expressed concern over reimbursement.