Medicare Advantage Enrollment Results Show The Struggle In The Industry

February 27, 2025

Medicare Advantage plans’ financial woes hit 2025 enrollment growth in a big way

The long delayed 2025 Medicare Advantage (MA) enrollment season results have finally been published. The January 1 enrollment statistics were up for a short time only to be taken down due to errors and presumably the transition in the White House. This week, both the January and February 2025 results were posted by the Centers for Medicare and Medicaid Services (CMS).

In looking at the January results, they do not seem quite right as the growth in enrollment from January to February would be extremely high – rather unprecedented. That leads to my supposition that the January data are still wrong or CMS had major issues processing January 1 applications. As such, I am comparing January 2024 numbers to February 2025 numbers as a proxy for 2024 to 2025 year-over-year growth.

The statistics show some of the financial struggles the industry continues to have. Growth is way down compared with prior years in the 2020s. This is obviously the result of major geographic contractions as well as plan benefit reductions by major MA players.

The MA enrollment big picture

Let’s look at how much MA has grown from January 2020 first. The 2020s decade has been a defining period for MA overall.

As the first chart below shows, MA has grown explosively this decade. Enrollment is now up 11 million lives since January 2020, a 46% growth in five years. As of January 2025, enrollment in MA is 34.941 million.
As can be seen, MA has hit the critical benchmark of enrolling over 50% of Medicare beneficiaries. This is earlier than both public and private estimates predicted some time back. Enrollment penetration of MA grew almost 35% in five years.
Enrollment growth in both raw numbers and percentages slipped dramatically from January 2024 to February 2025. From January 2020 to January 2024, enrollment growth averaged 8.77%, ranging from 6.12% to 11.28%. From January 2024 to February 2025, growth was just 4.39%, or about half the average of the four years prior. Now, since I did use February 2025 due to concerns about what CMS reported for January 2025, in essence the rough 4.4% growth number is slightly inflated because there would be some growth from January to February. Thus, the growth drop is actually even greater.

I predicted the slowdown given the financial woes and related benefit and footprint changes. The woes include lower rates, a new risk adjustment model that takes away revenue, poor Star scores that takes away even more revenue, and a return of utilization and inflation post-COVID.

The geographic contractions of some plans as well as benefit reductions and eliminations also made MA less attractive. MA has become more reliant on suburban and rural markets due to the high penetration in some large metropolitan areas, which tends to restrict net growth there. And a good deal of the footprint and benefit cutbacks occurred in the less populated markets in 2025. We will talk more about this later in the blog.

Now, in many ways people should continue to celebrate the continuing growth. An argument can be made that a 4.4% growth is nothing to sneeze at. And the growth continues to show the value proposition of MA over the traditional fee-for-service (FFS) program. But it is a warning sign that things are upside down in MA. With just a modest rate hike proposed in 2026 thus far, the lower growth trends likely will continue.

Why is Medicare Advantage (MA) attractive?

As I say often in my blogs and podcasts, MA has huge advantages over traditional FFS and thus has major appeal to Medicare beneficiaries. Despite some criticism, often generated by political critics and providers, members are highly satisfied with MA and the supplemental benefits and out-of-pocket protections it provides.

Despite some lower rate increases of late, MA plans still are able to increase benefits and make products appealing for a few reasons:

MA rate-setting largely is based on the antiquated and inefficient fee-for-service (FFS) program’s costs. This allows plans to deliver base services far more efficiently and pass savings on to members in additional benefits above and beyond FFS. These savings are mandated to be passed through to member benefits. Plans do a variety of things with the money:
- Reduce traditional program cost-sharing.
- Fill in huge FFS program benefit gaps (such as high costs of the inpatient benefit and the cap on covered days) that often bankrupt seniors and the disabled.
- Add numerous supplemental benefits not found in FFS.
The Star quality bonus program rewards high-performing plans with additional revenue to augment benefits even more.
MA plans are improving outcomes (where FFS is failing miserably) and providing critical services, such as case and disease management.

The combination of the benefits and quality focus again makes for a great value proposition. MA has become one of the greatest social safety nets for lower- and lower middle-income seniors. It can mean hundreds and sometimes thousands of dollars a year in additional support to fixed-income Americans. The value proposition means members flock to MA. And savvy Medicare beneficiaries are also moving to the highest-performing plans from lesser rated ones to get added benefits and more quality.

Analysis approach and parameters

What did I do? I analyzed the January 2024, December 2024, and February 2025 enrollment spreadsheets posted by the Centers for Medicare and Medicaid Services (CMS). Again, many analysts and I feel there is something wrong with the January 2025 spreadsheet and I have set that aside this year. I looked at all MA enrollment. While the enrollment season ended on December 7, 2024, enrollment will continue to increase in the next several months. Some may have signed up too late for January 1 enrollment. There also is an additional enrollment period for some enrollees that occurs from January 1 to March 31. Given ongoing marketing by plans, this tends to increase MA numbers in the first quarter.

To derive enrollment trends in MA, I focused my analysis on overall MA membership growth as well as big national plans and select prominent startups (often known as “insurtechs”).

The plans reviewed were:

Big National Plans:

United Healthcare
Humana
CVS Health’s Aetna
Elevance Health
Kaiser Health Plans
Centene
Cigna
Health Care Services Corporation (HCSC)
Molina Healthcare

Prominent Startup Plans:

Alignment Healthcare
Clover Health
Devoted Health

I did not look at standalone Part D plans, but at the following types of MA plans (broadly speaking):

Local Health Maintenance Organizations Plans (HMOs)
Local HMO Point of Service Plans (POS)
Local Preferred Provider Organization Plans (PPOs)
Regional PPO Plans
Medicare-Medicaid Plan HMOs (being phased out by 2026)
Private Fee for Service Plans (PFFS)
1833 and 1876 Cost Plans
Medicare Medical Savings Account Plans (MSAs)
Program of All Inclusive Care for the Elderly Programs (PACE)

Medicare Advantage enrollment growth main findings

The table below provides details and here is an overview of the findings:

MA membership grew from 33.473 million in January 2024 to 34.941 in February 2025, an increase of 1.468 million year over year. The year-over-year (2024 to 2025) percentage increase was 4.39%, down from 8.68% (2023 to 2024).
Big Plan MA enrollment rose from 25.568 million in January 2024 to 26.348, an increase of 780K or 3.1%. This is down from 2.111 million or 9% from 2023 to 2024. What’s worse is Big Plan MA enrollment went up just 16,100 from December 2024 to February 2025 due to the contraction and cutbacks noted.
Big Plan MA enrollment represented about 76.38% in January 2024 and is about 75.41% as of February 2025, down by about 1%. More interesting is that only about 53% of all growth from January 2024 to February 2025 was from Big Plan MA. Now, Big Plan MA still dominates the program (it is just 3% of all sponsoring organizations), but the decline in its share (ever so slightly) is a sign that the big plans are hurting financially, are pulling back on over-expansion, and that other MA plans may be getting better traction.

The Big MA players

UnitedHealthcare has consistently outperformed other national players over the years. Year over year, United banked the biggest gain in membership overall, almost 385K members or over 4%. But this is down from over 800K or 9.2% last year. United likely thought they would do better as they were bullish on 2025 given other plan’s issues. But United too made some cutbacks. In the end, United’s marketing and branding agreement with AARP continues to pay huge dividends.
Humana had the biggest reductions from January 2024 to February 2025 (about 226K or a 3.7% drop) and during the enrollment season (about 404K or a drop of 6.5%) But these numbers appear in line with what Humana had forecast to investors. This will help Humana’s financial recovery.
After Aetna, part of CVS Health, did tremendously well from January 2023 and January 2024, it signaled it had to contract in a big way in 2025 because its financials were underwater. CVS gained 232K from January 2024 to February 2025 (5.9%) but lost about 253K during the enrollment season (or 5.8%). This loss appears to be less than the rough 10% of enrollment Aetna had forecast. This could actually complicate Aetna’s recovery a bit.
After a flat 2023 to 2024, Elevance Health was also bullish on 2025 and gained about 265K lives from January 2024 to February 2025, 13.1%. About 91% of the growth came in the enrollment season that just ended.
Kaiser gained about 60K from January 2024 to February 2025, or 3.1%. About 25K came in the enrollment season.
In the case of Centene, given financial performance issues in the MA line and low Star scores, the company indicated it was strategically shedding more lives as it had during the last period. Centene had a decline of about 109K or 9.4% from January 2024 to February 2025 – a majority of it during the enrollment season.
While Cigna is on the verge of closing its sales of MA lives to Health Care Service Corporation, a multi-state mutual Big Blue, it had good numbers from January 2024 to February 2025 – about 100K growth or a 16.8% increase. Their enrollment season actually added about 110K lives.
HCSC had some moderate growth year over year and in the enrollment season. Molina would have shed lives year over year if not for the purchase of about 109K Bright Health lives in 2024. Molina did shed lives during the enrollment season. The counts in the chart are a bit misleading as the bright Health acquisition skews them for Molina.

The rest

The prominent startups had mixed results due to the financial crisis in MA. Alignment Healthcare had growth of about 66K or 45.4% from January 2024 to February 2025. It did well throughout 24 and in the enrollment season. Clover Health grew about 21K or 2.7%, most of which came during the enrollment season. Devoted Health strategically shed some lives during the enrollment seasons after huge growth in the past. From January 2024 to February 2025, enrollment is up by about 12K or 5.8%. It shed about 33K lives or 13.4% during the enrollment season.
Non-Big MA plan enrollment (including the prominent startups) grew at a healthy pace year over year as well – about 688K or 8.7% from January 2024 to February 2025. This compares to just 3.1% for Big MA plans. In addition, the growth compares favorably to the prior year-over-year statistics – about 563K or 7.7%. Non-Big MA grew about 406K during the enrollment season (about 5%), while Big MA grew by just 16K – basically flat.

How did SNPs do?

Special Needs Plans (SNPs) (including MMPs) continued to see a healthy increase in enrollment. From January 2024 to February 2025, SNPs grew to 7.553 million, a gain of about 646K or 9.35%. SNP enrollment grew about 264K in the enrollment season. But this growth is still down from the January 2023 to January 2024 period. In that period, SNPs added 1.154 million or 20.07%. SNPs usually are HMOs, but there are some L-PPOs. The vast majority of enrollees are in dual eligible SNPs (D-SNPs). Chronic Care SNPs had healthy growth this period as MA plans make investments in both D- and C-SNPs.

Benefit packages

Given some concern about financial performance and growing risk, the number of Plan Benefit Packages (PBPs or what you would think of as a benefit plan) dropped from 7,289 to 7,127, or 162 PBPs (-2.2%). The number of sponsors or parent organizations remained about the same, increasing by 3 to 308.

HMOs vs. PPOs

Let’s look at the products that grew the most. I often talk about the surge of PPOs for a number of reasons – the move of MA into more rural and suburban areas as well as more middle-income and wealthier people joining MA. Over the years, PPOs began growing and competing well with HMOs in terms of raw numbers as well as percentage growth. While PPOs’ sheer number and percentage growth was beating HMOs over the past several years, that trend changed from January 2024 to February 2025. From January 2023 to January 2024, HMOs grew about 853K (4.8%) and PPOs 1.861 million (14.8%). But from January 2024 to February 2025, HMOs grew more than PPOs in terms of numbers and percentage: HMOs up about 882K (4.7%) vs. PPOs up about 580K (4%). HMOs grew by about 480K during the enrollment season, while PPOs contracted by about 58K.
For 2025, MA plans contracted both HMO and PPO to realign financials. MA plans terminated a net 134 PBPs (down about 3.2%). PPO PBPs declined on a net base by 66 (down by about 2.5%) still.

Conclusion

In sum, aging, reasonable reimbursement (rate-setting and Star bonuses), and an old and tired traditional FFS system as a competitor makes MA a growing place to be for insurers. Plans continue to make investments, especially in the area of SNPs. But there is no doubt that the current financial stresses caused a major contraction of benefits and footprints. This was evident throughout the industry but especially among many big players. While financial problems hit all size plans, the non-Big MA players seem to be doing better and were able to capitalize on this with better enrollment numbers in 2025.

#medicareadvantage #enrollment #medicare #coverage #stars #healthplans

— Marc S. Ryan