Growth From July To August In Medicare Advantage

August 22, 2024

As noted last month, I decided to continue my Medicare Advantage (MA) monthly enrollment blogs because of continuing month-over-month increases. The growth is tied to remaining strong benefit packages for 2024 and largely ties to a few big plans.

Many plans will rein in benefits and geographies for contract year 2025 due to significantly deteriorating bottom lines. This is being caused by the return of robust utilization, inflation picking up in the healthcare sector (especially at hospitals), poor Star scores, negative rate increases for 2024 and 2025, new regulatory burdens (such as the new prior authorization restrictions), and the greater costs MA plans will bear due to the Inflation Reduction Act’s (IRA) Part D changes. See my earlier blogs on this Part D topic here: https://www.healthcarelabyrinth.com/will-democrats-be-victim-of-an-october-surprise-of-their-own-making/ and https://www.healthcarelabyrinth.com/part-d-premium-woes-due-to-the-inflation-reduction-act/ .

While we are outside of the two regular annual enrollment windows, increases in MA enrollment still occur given the aging of America and the ability of some populations, such as dual eligibles, to continue to make changes throughout the year. New enrollees see huge value in enrolling in MA over the traditional fee-for-service (FFS) program. Whatever the stinginess of benefits in 2025, this value difference will continue to drive growth in 2025, perhaps at lower growth trends.

As I have reported, growth from January 2023 to January 2024 was a robust 8.7% increase or 2.674 million. Enrollment in MA reached 30.799 million in January. Since that time, enrollment has continued to climb:

By about 183,000 from January 1 to February 1.
By about 144,000 from February 1 to March 1.
By about 86,000 from March 1 to April 1.
By about 100,000 from April 1 to May 1.
By about 98,000 from May 1 to June 1.
By about 72,000 from June 1 to July 1.
By about 87,000 from July 1 to August 1, a growth of 0.26%. So, July to August growth rebounded from June to July.

Enrollment in MA has now hit 34.243 million. The growth from January 1 to August 1 represents an additional approximate 2.2% increase or about 770,000 lives. MA enrollment has now increased to 50.89% of all Medicare beneficiaries.

As we saw with January 2023 to January 2024, PPO growth now significantly outstrips HMO growth. From January 1 to August 1, HMOs grew by about 270,000, with PPOs growing about 494,000. HMOs grew about 34,000 from July to August, with PPOs growing about 52,000 in that timeframe.

Special Needs Plans (SNPs) continued to do very well too. After growing about 1.154 million from January 2023 to January 2024, SNPs grew by another approximate 270,000 from January to August. Enrollment grew by about 34,000 from July to August.

Big Plans continue to dominate the program with about 76% of all enrollment. About 68% of the growth (59,000 of 87,000) from July 1 to August 1 was captured by the Big 3 – United (about 7k), Humana (about 19k), and CVS Health (about 34k). CVS Health’s Aetna continues huge growth but has signaled it will reduce benefits and geographies next year because of major medical expense and margin issues in MA. Humana is expected to trim benefits too. United grew for the first time since January.

About 81% of the growth from January to August 2024 was in the Big 9 national plans. If you adjust out the Bright Health lives acquired by Molina, the total is about 67%. Thus, Big 9 organic growth is under its actual penetration in MA (which is about 77%). In August, its share of growth was about 69%. This underperformance as well as the potential benefit cuts and geographic contractions in 2025 offer some hope for future growth to the small- and medium-sized plans in MA.