Humana, WellPoint and Aetna have seen particularly robust enrollment growth this year. Humana has added roughly 330,000 beneficiaries since December, a 13.4% increase. Aetna's Medicare Advantage rolls have grown by 140,000, a 14.5% increase. And WellPoint has added more than 100,000 customers, a jump of 18.2%. By contrast, UnitedHealth and Cigna have seen modest decreases so far this year.
The stock prices for all five publicly traded firms are up by more than 10% in 2014. Investors have been particularly keen on Humana, lifting its stock price by more than 50% so far this year.
Historically, Medicare Advantage enrollees have cost significantly more than their counterparts in the fee-for-service Medicare program. In 2009, the average private Medicare enrollee cost 116% as much as traditional beneficiaries, according to the Medicare Payment Advisory Commission (PDF).
The Patient Protection and Affordable Care Act was designed to reduce that gap by cutting payments to health plans that provide coverage to Medicare beneficiaries. But insurers have successfully lobbied to stave off some of the deepest proposed cuts in each of the last two years. This year the average Medicare Advantage enrollee costs 106% as much as fee-for-service beneficiaries.
The continuing growth in private Medicare enrollments is being driven by baby boomers aging into the program. They're choosing Medicare Advantage plans at a rate of roughly 50%. Insurance observers point out that they are more comfortable than older enrollees with a managed-care model of coverage since many of them dealt with such insurance plans during their working years.
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