Roughly 17.7 million seniors and disabled Americans are enrolled in Medicare Advantage, and many more are expected to sign up for the private Medicare health plans when the annual enrollment period begins next month.
The total Advantage population as of September 2015 is up 7.3% from the almost 16.5 million people who had Advantage coverage at the same time last year, according to the latest CMS data.
Large, investor-owned health insurers continue to dominate the Advantage space. UnitedHealth Group’s market-leading enrollment reached 3.48 million as of September 2015, an 8.6% jump from the same time last year, according to a Modern Healthcare analysis of the data. Humana was close behind with 3.23 million members, an 11.4% increase. Aetna, which is in the process of acquiring Humana, is the fourth-largest Medicare Advantage insurer with 1.27 million enrollees.
A recent study conducted by the Commonwealth Fund showed that robust competition among Medicare Advantage plans was practically nonexistent, although Medicare-eligible people always have the option of choosing traditional fee-for-service coverage.
Several not-for-profit plans have also recorded large gains. Kaiser Foundation Health Plan, part of Oakland, Calif.-based Kaiser Permanente, is the largest not-for-profit Advantage company. It had 1.33 million members as of this month, a 6.4% year-over-year hike. Blue Cross and Blue Shield of Minnesota boosted membership by 23% since last September, covering 178,000 seniors.
Hospital- and provider-based systems like Kaiser are growing their Advantage business at some of the highest rates. For example, UPMC in Pittsburgh, Spectrum Health in Grand Rapids, Mich., and Henry Ford Health System in Detroit each grew their Medicare insurance enrollment by 11% or more in the past year.
Highmark Health, Blue Cross and Blue Shield of North Carolina and multiple other plans, however, still have lost several thousand members over the past year. Many insurers had to scale back on benefits, raise prices or drop products altogether in response to several years of federal rate cuts and high claims costs.
Medicare’s annual enrollment period begins Oct. 15 and runs through Dec. 7. People have been gravitating to Advantage plans due to their low premiums and extra perks, such as hearing aids that have little or no cost-sharing. Observers foresee more enrollment in Advantage plans for 2016.
“I think there will be an uptick in Medicare Advantage enrollment,” said Sundar Subramanian, a healthcare partner at Strategy&, the consulting arm of PricewaterhouseCoopers. “And I think the larger, higher-quality plans will gain more in membership.”
Plans that have high quality scores are not only gaining more members; they are also receiving bonus payments from the federal government. A company’s quality rating is based on numerous clinical outcomes and measures—for example, what percentage of members get their required colorectal cancer screening? The companies are then assigned a star rating on a scale from one to five. Health plans with a four-star rating receive a 5% bonus payment. Any plan below that threshold gets nothing extra.
Seventy-two companies had health plans with at least four stars for 2015. Only seven organizations had an Advantage plan with a five-star rating: Kaiser, Baystate Health in Springfield, Mass., Dean Health Systems in Madison, Wis., Intermountain Healthcare in Salt Lake City, Martin’s Point Health Care in Portland, Maine, Medical Associates Clinic & Health Plans in Dubuque, Iowa, and Tufts Health Plan in Watertown, Mass. The 2016 star ratings go live Oct. 8.
“Plans that have learned to survive and figure out how they can serve consumers with more targeted benefit designs, narrower network of providers and better quality … are in a tremendous position,” Subramanian said. “They are set to grow as opposed to the other plans that did not make investments two to three years ago.”