Some evidence that MA enrollment is slowing and big national plans realigning
The 2025 enrollment season for Medicare Advantage (MA), known as the Annual Election Period (AEP), has come to a close as of Dec. 7, with some getting through Dec. 31 due to plan terminations. In this period, people can make changes between the traditional fee-for-service (FFS) program and MA or between MA plans. Standalone Part D (PDP) can be added or switched as well. Then, from Jan. 1 to Mar. 31, we have the perhaps misnamed MA Open Enrollment Period (MA OEP). In these three months, only those in MA can switch back to FFS and add a Part D plan or switch MA plans. Those enrolling in an MA Part C only plan can also add a standalone Part D plan.
We are in a very odd time. Plan terminations and geographic contractions were major. Benefit cutbacks, premium hikes, and increases in cost-sharing also occurred. As many as 2 million seniors and those with disabilities saw plan terminations in MA and will have to make a new choice. In an average year, that number may be about 100,000.
Major national MA health plans have trimmed their product offerings and footprint in a major way. This is especially the case for Humana, CVS Aetna, and Centene. But even those national plans that were bullish on 2025, including UnitedHealthcare and Elevance Health, did make some cutbacks as well. Regional plans as well made some changes due to the unprecedented financial challenges in the industry, including multiple years of negative rate hikes, low Star performance, risk adjustment changes, a return of utilization and inflation, regulatory changes (such as prior authorization restrictions) that add to costs as well, and the major costs both MA and PDP plans bear due to the Part D cost-sharing reductions in the Inflation Reduction Act (IRA).
Will MA’s explosive growth come down?
Many predict that MA enrollment thus will be impacted dramatically. As you can see from the chart below, MA has seen unprecedented growth since 2020. From January 2020 to January 2024, MA enrollment has grown by about 9.541 million lives, or almost 40%. MA’s penetration of the total Medicare population has increased by almost 30% during the timeframe. Growth each year has ranged from just over 6% to over 11%. Could this year change due to the major realignment seen by major plans? After all, they control about three-quarters of all enrollment.
On one hand, MA enrollment should grow again because of the value proposition MA has over FFS. Even with reductions, MA adds benefits, reduces cost-sharing, fills in Medicare benefit holes, reduces overall costs, and provides one-stop shopping for healthcare.
On the other hand, given the massive pullback by some major MA plans, we could see at the very least less growth than we have seen in the past. Some may decide to return to the traditional program upon plan termination or because plans are no longer offered or plentiful in less-penetrated areas.
Some also suggest the major pains felt by the big MA plans could be an opportunity for regional players – as worried as some may be about picking up too many lives in 2025 due to the financial and onboarding risks.
December enrollment is out and shows some trends
While it is very early and not a lot can be safely said, we are seeing some trends that show some more sluggish growth and major plans shedding lives — perhaps in favor of the regional players.
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.
- Only about 20,000 from November 1 to December 1.
Enrollment in MA has now hit 34.519 million. The growth from January 1 to December 1 represents an additional approximate 3.1% increase or about 1.046 million lives. MA enrollment has now increased to just shy of 51% of all Medicare beneficiaries.
Now, we did see a major slowdown in growth in December, which is a sign of the big plans shedding lives and perhaps slower overall growth into January 2025. Growth from November 1 to December 1 was about 20,000 compared with growth from November 1, 2023 to December 1, 2023 being 35,000.
Big plans shedding lives
We are also seeing signs that Big Plans are shedding lives going into 2025. The 9 Big Plans saw their total enrollment drop for the first time in 2024. While the Big 9 saw their enrollment contract by about 5,000 lives, the industry as a whole went up by about 20,000 lives. For the year, Big 9 MA plan growth was about 73% compared with their about 76% market share. But if you adjust out the Bright Health lives acquired by Molina, the total is about 63% for the year. So, Big MA plans lost ground in 2024 and likely will in 2025 as well to the benefit of small- and medium-sized regional plans.
UnitedHealthcare went up by about 15,000 lives in December, showing their likely growth in 2025. United had an anemic 2025, staying roughly flat. Humana, Aetna, Elevance Health and Centene all shed lives in December. Centene shed the most lives in 2024 at about 39,000. They are projected to contract again. This continues a realignment trend. Humana grew by about 178,000 and Aetna about 485,000 in 2024. Each strategically misstepped in 2024 and have said they want to massively contract in 2025 – between 5% and 10%. The question is will they contract as expected given market dynamics (see below)? Elevance has said it should grow in 2025.
PPOs and SNPs grow
As we saw from January 2023 to January 2024, PPO growth now significantly outstrips HMO growth. From January 1 to December 1, HMOs grew by about 402,000, with PPOs growing about 638,000. PPOs grew by about 15,000 from November 1 to December 1, with HMOs growing about 5,000 in that timeframe.
Special Needs Plans (SNPs) continued to do very well. After growing about 1.154 million from January 2023 to January 2024, SNPs grew by another approximate 382,000 from January to December. SNPs now are over 21% of MA enrollment.
SNP enrollment grew by about 7,000 from November to December. About 34% of all MA enrollment growth from November to December was in SNPs. For the year, SNPs captured about 36% of all MA growth. Plans are making huge new investments in SNPs for 2025 and we will see SNP growth continue to grow and perhaps accelerate.
How will plan offerings change in 2025
Some of how well MA does on the enrollment front will be dictated by the changes in plan offerings. For this I turn to the Kaiser Family Foundation’s (KFF) analysis of 2025 MA offerings. KFF finds the following:
- 3,719 Medicare Advantage plans are available nationwide for individual enrollment in 2025 – a 6% decrease from the number of plans (240 fewer plans) offered in 2024.
- Major insurers both expanded into new counties and exited others. Humana entered 12 new counties and exited 70 counties. UnitedHealthcare entered 42 new counties and exited 38 counties. Aetna entered 87 new counties and exited 65 counties. Centene entered 134 new counties and exited 100 counties. The top two MA plans, United and Humana, still are offering plans in nearly 90% of all U.S. counties. KFF also finds the availability of offerings is still very robust in most areas.
- But the over 300 county exits of big plans (it is a greater number looking at all MA plans) is a materially new trend and has led to the large number of people facing plan terminations. KFF says about 5% of current MA enrollees in individual MA-PDs (about 1.4 million) are in a plan that has been terminated for 2025. Other studies put this number at up to 2 million. KFF also says up to 7% of enrollees in MA-PDs (or 1.8 million) may be affected by a consolidation. In this case members could be moved automatically to a different plan.
- In 2025, 1,445 SNPs will be offered nationwide, an 8 percent increase between 2024 and 2025. While the number of Institutional SNP (I-SNP) and Chronic Care SNP (C-SNP) offerings have increased dramatically, about 63% of SNP offerings are Dual Eligible SNPs (D-SNP) and almost 90% of enrollment is in such SNPs or the related Medicare-Medicaid Plans (MMPs).
- The plan and benefit realignment impacted all major plan types. The number of HMO plan benefit offerings dropped from 2,211 in 2024 to 2066 in 2025, a 6.6% drop. The number of Local PPO plan benefit offerings dropped from 1,673 in 2024 to 1,588 in 2025, a 5.1% drop. The number of Regional PPOs plan benefit offerings dropped from 51 in 2024 to 43 in 2025, a 6.6% drop. As noted, PPO enrollment growth has far exceeded HMO growth recently. MA plans clearly reined in PPO offerings for 2025, which are usually more costly than HMOs. We will see if this impacts the continued PPO growth or not.
Medicare Advantage 2025 Spotlight: A First Look at Plan Offerings, November 15, 2024, Kaiser Family Foundation. https://www.kff.org/medicare/issue-brief/medicare-advantage-2025-spotlight-a-first-look-at-plan-offerings/
Anecdotal evidence on growth so far
Many are saying UnitedHealthcare and Elevance will see strong growth in the 2025 enrollment seasons. At the same time, many are calling out growth from regionals, including independent Blue Cross and Blue Shield plans, the so-called insurtechs (Devoted, Alignment, and Clover) as well as Scan, Medical Mutual, and Zing.
While they may have desired a different result, Aetna and Humana could see less shedding than they wanted (or perhaps some gains – who knows?). This is because the massive realignment in the industry sent consumers scurrying to find the best possible plan even if the value proposition was less. Thus, their sheer reach across the nation and demand by enrollees could trump the shedding estimates of 5% to 10%.
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 .
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— Marc S. Ryan
