The Kaiser Family Foundation has released a report on the level of competition around the country for Medicare Advantage plans. These plans currently enroll over half of Medicare beneficiaries. They are facing a tough environment as medical costs have risen and their coding practices in regard to payments from CMS are under investigation. Medicare Advantage plans are available to most Americans, but the level of competition varies and is not generally high. The average beneficiary has access to 34 plans with drug coverage, but those plans are only offered by 8 health plan companies, as most companies offer more than one plan in a geographic market. The plans will vary by premium and benefits. The number of plans available his doubled since 2018, but the number of firms has stayed the same. (KFF Report)
At a county level, the report found that the great majority of counties are highly concentrated, or not very competitive. 79% of counties are highly concentrated and 18% very highly concentrated. 89% of enrollees are in a highly or very highly concentrated county. As you would expect, rural counties tend to be more concentrated. UnitedHealthCare and Humana are particularly dominant, with UHC having 50% or more of total MA enrollment in 22% of all counties and Humana in 10%.
While this level of concentration may reduce competition, the scope for competition is pretty limited in any event. Most companies have been overpaid, so zero premium to the member plans are very common, and there is limited ability to vary benefits significantly. Networks of providers also tend to be fairly similar. More critical to the future of Medicare is how the payments to the MA plans will be reformed. Those changes may reduce competition even more.
