Medicare Advantage is the side of the Medicare program in which beneficiaries can select coverge by a private plan, which then is paid by CMS for providing the coverage. Benefits typically include not only the traditional Medicare coverage, but often reduced copays, deductibles and additional items that fee-for-service Medicare does not offer. In fall and early winter every year Medicare beneficiaries can select a Medicare Advantage plan if they wish, or change from an existing one. Some beneficiaries can also have an opportunity to select an MA plan throughout the year. Gorman Health tracks the MA program carefully and has issued a report on its status following the recent annual enrollment period. (Gorman Report) The number of beneficiaries in an MA plan grew by 3.42% in 2017, to 34% of all beneficiaries. This continues the very steady growth of the program.
The number of participating plans stayed pretty steady but more benefit packages are being offered by these plans. There are about 3300 separate benefit plans, with 300 being employer group waivers for Medicare-eligible employees and retirees. This is about 10% more benefit plans for 2018 than for 2017. These benefit packages are offered by 285 parent organizations, the largest of which are the large commercial health plans–UnitedHealth, Anthem, Humana, Aetna, Cigna, Kaiser, and independent Blues plans. The increase in the number of benefit packages may indicate a more competitive market or may reflect some game-playing. Most urban areas have multiple choices for beneficiaries, but many rural ones have limited options. Almost half of beneficiaries are in an HMO plan design, with the next largest numbers being in PPO or special needs designs. There has been a trend to tighten networks as a cost control tactic. Some states, including many large population ones, have 40% or more of beneficiaries in MA plans.
UnitedHealth is the largest individual MA carrier, with almost 4 million beneficiaries and 6% AEP growth for 2018. Humana is next with almost 3 million beneficiaries and 5% 2018 growth. The next largest plans are just over a million enrollees, so UnitedHealth and Humana between them have over 40% of the individual MA market. UnitedHealth also has the largest group MA enrollment, with Aetna next. Aetna had particularly rapid individual and group MA growth. The concentration is the MA market is obviously of some concern, but there are a number of smaller and emerging players who are showing decent growth. Provider-sponsored MA plans have had a mixed record of success but it continues to be an area of interest especially for large health systems.
Some MA plans, including the two largest, recently achieved notoriety for gaming the Stars rating bonus system to put more beneficiaries in highly-rated plans and get paid more. In addition, plans have been suspected for years of manipulating the risk adjustment scores for enrollees by exaggerating their health needs. CMS has been behind the curve in responding to these issues, which it created to some extent by poor design. Now the plans are all in a lather because CMS might use actual encounter data to determine risk scores. That is way overdue and encounter data has a further benefit of allowing better analysis of care and provider patterns across the entire Medicare program. MA is a great idea, and putting all beneficiaries in a plan would likely be a good thing. But CMS needs to ensure that they are not overpaying the plans and that they are are focussed on appropriately managing the care and health of their members.
