Medicare Advantage (MA) growth continues as we enter 2025 enrollment season
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.
Increases in MA enrollment still occur outside of the enrollment season given the aging of America and the ability of some populations, such as dual eligibles, to continue to make changes throughout the year.
We are now in the enrollment season for 2025 and I wonder if we will see the normally robust month-over-month growth. So far, it seems to be there. New enrollees see huge value in enrolling in MA over the traditional fee-for-service (FFS) program. This value difference likely will continue to drive some growth in 2025 even with reductions in benefits, increased premiums and cost-sharing, and less choice in some geographies. The reductions are being caused by the return of robust utilization, inflation picking up in the healthcare sector (especially at hospitals and on drugs), 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.
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 33.473 million in January 2024. 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.
- By about 70,000 from August 1 to September 1.
- By about 84,000 from September 1 to October 1.
- By about 102,000 from October 1 to November 1.
Enrollment in MA has now hit 34.499 million. The growth from January 1 to November 1 represents an additional approximate 3.1% increase or about 1.026 million lives. MA enrollment has now increased to just shy of 51% of all Medicare beneficiaries.
As we saw from January 2023 to January 2024, PPO growth now significantly outstrips HMO growth. From January 1 to November 1, HMOs grew by about 397,000, with PPOs growing about 623,000. But HMOs grew by more than PPOs between October 1 and November 1. HMOs grew by about 66,000 from October 1 to November 1, with PPOs growing about 37,000 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 375,000 from January to November. SNPs now are over 21% of MA enrollment. SNP enrollment grew by about 45,000 from October to November. About 44% of all MA enrollment growth from October to November was in SNPs. Plans are making huge new investments in SNPs for 2025 and we will see SNP growth continue to grow and perhaps accelerate.
Big Plans continue to dominate the program with about 76% of all enrollment. But just 45% or so of the growth (46,000 of 102,000) from October 1 to November 1 was captured by the Big 9 national plans. This is a signal that MA plans are struggling – cutting benefits and reining in compensation to agents and brokers to slow growth.
United Healthcare had about 22,000 in growth from October 1 to November 1, with Humana coming in at about 16,000. CVS Health’s Aetna saw just about 8,000 in new net enrollment. Strong 2024 benefits have meant CVS Health’s Aetna has grown about 488,000 in 2024 so far, with Humana growing about 181,000 and Elevance Health and Kaiser Permanente growing a modest approximate 31,000 and 33,000, respectively. The rest of the Big 9 either contracted or grew very modestly in 2024 (Molina contracted without its acquisition of lives in January.) CVS Health’s Aetna and Humana will reduce benefits and geographies the most next year because of major medical expense and margin issues in MA.
About 75% of the growth from January to November 2024 was in the Big 9 national plans. If you adjust out the Bright Health lives acquired by Molina, the total is about 64%. Thus, Big 9 organic growth is under its actual penetration in MA. This underperformance as well as the benefit cuts and geographic contractions by big plans in 2025 offer some hope for future growth to the small- and medium-sized plans in MA.
Notes:
I am using the official MA monthly enrollment figures found here: https://www.cms.gov/data-research/statistics-trends-and-reports/medicare-advantagepart-d-contract-and-enrollment-data/monthly-enrollment-plan . As well, I am using monthly total enrollment for Medicare to calculate MA penetration found here: The site is here: https://data.cms.gov/summary-statistics-on-beneficiary-enrollment/medicare-and-medicaid-reports/medicare-monthly-enrollment .
#medicareadvantage #partd #pdp #coverage
— Marc S. Ryan
One Response
This is insightful. I believe the enrollment increases will continue as a result of the continued aging of the Baby Boomer population. I doubt small plans will be able to last past the next 5 years in that the resources needed to compete in the Stars program. The administrative overhead for a plan with 1 Medicare Advantage product with 50,000 members is the same as a plan with 1 Medicare Advantage product with 5 million members. As was predicted over a decade ago when Aetna & Coventry merged (pre CVS acquisition), Health plans, especially those with a high reliance on government programs, will need to be large to survive.