Medicare Advantage still 'only safe game in town' for insurers
Skip to main content
MDHC_Logotype_white
Subscribe
  • My Account
  • Login
  • Subscribe
  • News
    • This Week's News
    • COVID-19
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • People
    • Regional News
    • Digital Edition
    • Lawmakers seek long-term limit on governors' emergency power
      NIH aims to address COVID testing disparities in underserved communities
      Diabetes patients at high risk from COVID-19 are managing conditions more effectively
      Some GOP-led states target abortions done through medication
    • Lawmakers seek long-term limit on governors' emergency power
      NIH aims to address COVID testing disparities in underserved communities
      Diabetes patients at high risk from COVID-19 are managing conditions more effectively
      More Black Americans open to vaccines after outreach efforts
    • Calls mount for Biden to track U.S. healthcare worker deaths from COVID
      Front-line workers want more assistance after a year of COVID-19
      Healthcare providers enter Philadelphia's legal fight to enact gun laws
      Taking population health expertise to the market
    • Cigna and Oscar expand their small business partnership
      5 things to know about Agilon Health's proposed IPO
      More than a half million Americans gain coverage under Biden
      Insurance auto-retention policies could halve number of people kicked off coverage
    • Lawmakers seek long-term limit on governors' emergency power
      Reforms follow deadly year in New York nursing homes
      MACPAC approves recommendations on specialty drugs, behavioral health
      No region in the world spared as virus cases, deaths surge
    • Outgoing UHS chief made almost 50% less in 2020 than 2019
      A hundred dollar bill cut into strips with a colorful background.
      Population health still at odds with fee-for-service
      Private equity could increase long-term Medicare spending, MedPAC says
      Jeb Bush, Marilyn Tavenner getting in on healthcare SPAC frenzy
    • Healthcare data breaches
      By the Numbers: National health information service providers
      Health systems are navigating the digital divide and vaccine access
      woman doctor shaking hands with nurse and smiling
      Sponsored Content Provided By Philips
      A stronger healthcare system requires bold new ways of working together
    • More Black Americans open to vaccines after outreach efforts
      Fight against STDs lost amid coronavirus testing blitz
      Beyond the Byline: Kids' unchecked mental health needs pose long-term consequences
      Hospitals vary widely in reducing C-section rates, but some progress in other maternal health metrics
    • Novant Health adds chief payor performance officer
      Kaiser Permanente names Comer chief IT officer
      Mass General Hospital's Slavin to retire as CEO
      UnitedHealthcare names Thompson as new CEO
    • Midwest
    • Northeast
    • South
    • West
  • Insights
    • ACA 10 Years After
    • Best Practices
    • Special Reports
    • Innovations
    • The Affordable Care Act after 10 years
    • A close-up of a woman receiving a COVID-19 vaccine.
      Providers in underserved communities work toward equitable vaccine distribution
      Josh Bradshaw
      How one rural Illinois county vaccinated 84% of its senior citizens by early March
      Dr. John Fischer
      Patient-reported outcomes tool for hernia surgery helps physicians improve care
      New care model helps primary-care practices treat obesity
    • Jennifer Pannone and her daughter Victoria.
      Mental health access for children needs attention
      A family photo of the the Hangens.
      Stressing the already burdened pediatric behavioral health system
      What's next for on-demand telehealth companies?
      A map of the U.S. with images of the coronavirus.
      The digital divide becomes a new social determinant of health
    • Ryan McGinnis
      Finding efficiencies in the OR using tech
      Dr. Daniel Hall
      UPMC pilots machine learning, telehealth to inform patient transfers
      A woman being recorded using her inhaler on a smartphone.
      Digital check-ins, connected inhalers help control asthma
      A phone screen showing the question, "Mary we hope this information was helpful and we'd like to keep guiding you. Are you interested in knowing when it's your turn to receive the vaccine?"
      Chatbots, texting campaigns help manage influx of COVID vax questions
  • Transformation
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Diabetes patients at high risk from COVID-19 are managing conditions more effectively
      Nearly 1 in 5 Americans skipped care due to cost last year
      COVID-19 long-haulers need holistic treatment, providers say
      Amazon expanding employee clinics into two more states
    • Malpractice premiums peak in 2020, AMA survey shows
      A rendering of a cancer research institute at the University of Southern California that will include 5G.
      Healthcare providers determine how to best use ultrafast 5G
      Two-thirds of largest hospitals aren't complying with price transparency rule
      'Silver lining': Hospitals keep practices born in COVID rush
    • Addressing long-standing barriers needed for mental and physical health integration
      A close-up of a woman receiving a COVID-19 vaccine.
      Providers in underserved communities work toward equitable vaccine distribution
      The waiting room of a Kaiser Permanente clinic at a Target location.
      Health systems revamp their approach to retail clinics
      Josh Bradshaw
      How one rural Illinois county vaccinated 84% of its senior citizens by early March
    • CMS wants to bump pay for hospices, SNFs next year
      CMMI pauses new Direct Contracting model applications
      CMS wants to boost payments over 2% for inpatient rehab, psych facilities
      40 Oregon providers, insurers sign value-based care pact
  • Data/Lists
    • Rankings/Lists
    • Interactive Databases
    • Data Points
    • Health Systems Financials
      Executive Compensation
      Physician Compensation
  • Op-Ed
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
    • Dr. Alan Kaplan
      The risks, rewards of taking organizations 'where they haven’t gone before'
      Wellstar CEO calls adapting for the pandemic her bold move
      Howard P. Kern
      Recognizing the value of telehealth in its infancy
      Dr. Stephen Markovich
      A bold move helped take him from family doctor to OhioHealth CEO
    • Drs. Hal Paz and Joshua J. Joseph
      Mobilized to fight the COVID crisis: a blueprint for community and academic partnerships
      Dr. Stephen Markovich
      Making sure we're aligned along the path to achieving inclusion
      Barry Ostrowsky
      Ending racism is a journey taken together; the starting point must be now
      Laura Lee Hall and Gary Puckrein
      Increased flu vaccination has never been more important for communities of color
    • We're losing engaged providers, and healthcare will pay the price
      Dr. Chris DeRienzo
      How COVID-19 broke health systems and made them stronger
      Bonnie Castillo and John Welton
      Dueling opinions: The role of mandated nurse staffing ratios
      Still crossing the quality chasm: a look at the IOM's seminal report 20 years later
    • Letters: Eliminating bias in healthcare needs to be ‘deliberate and organic’
      Letters: Maybe dropping out of ACOs is a good thing for patients
      Letters: White House and Congress share blame for lack of national COVID strategy
      Letters: VA making strides to improve state veterans home inspections
    • Sponsored Content Provided By Optum
      How blockchain could ease frustration with the payment process
      Sponsored Content Provided By Optum
      Three steps to better data-sharing for payer and provider CIOs
      Sponsored Content Provided By Optum
      Reduce total cost of care: 6 reasons why providers and payers should tackle the challenge together
      Sponsored Content Provided By Optum
      Why CIOs went from back-office operators to mission-critical innovators
  • Awards
    • Award Programs
    • Nominate
    • Previous Award Programs
    • Other Award Programs
    • Voting Open - 50 Most Influential Clinical Executives
      Nominations Open - Top 25 Innovators
      Nominations Open May 24 - Top 25 Emerging Leaders
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Minorities in Healthcare
      • - Luminaries
      • - Top 25 Minority Leaders
      • - Minorities to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Excellence in Nursing Awards
    • Design Awards
    • Top 25 COOs in Healthcare
    • 100 Top Hospitals
    • ACHE Awards
  • Events
    • Conferences
    • Galas
    • Webinars
    • COVID-19 Event Tracker
    • emburse certify modern healthcare custom media webinar logo lockup
      Sponsored Content Provided By Emburse
      Webinar: Making it easy to manage costs
      virtualmed staff modern healthcare custom media logo lockup
      Sponsored Content Provided By VirtualMed Staff
      Webinar: Best practices for creating a successful telepsychiatry program
      telehealth visit man touching neck while speaking to doctor on computer
      Sponsored Content Provided By Accumen
      Webinar: How telehealth has evolved into a standard of care
      modern healthcare custom media and trimedx custom webinar logo lockup
      Sponsored Content Provided By TRIMEDX
      Webinar: Bridging the gap between clinicians and administration to improve capital equipment planning
    • Women Leaders in Healthcare Conference
    • Social Determinants of Health Symposium
    • Healthcare Transformation Summit
    • Leadership Symposium
    • Virtual Briefings
      • - Hospital of the Future
      • - Mental Health
      • - Patient Safety & Quality
      • - Strategic Marketing
      • - Virtual Health
      • - Workplace of the Future
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Minority Leaders Gala
    • Top 25 Women Leaders Gala
  • Listen
    • Podcast - Next Up
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
    • Dr. Chris DeRienzo
      Next Up Podcast: Building team spirit in the wake of COVID-19
      Mikelle Moore
      Next Up Podcast: Mikelle Moore on recognizing all hospital workers during the pandemic
      Empty boardroom
      Next Up Podcast: What's going to happen tomorrow? Succession planning during emergencies
      Next Up Podcast: Educating patients on the COVID-19 vaccine with Tanya Andreadis
    • Beyond the Byline: Kids' unchecked mental health needs pose long-term consequences
      Beyond the Byline: How COVID-19 has impacted hospital finances
      An older man sitting on a hospital bed with his back toward the camera.
      Beyond the Byline: Upcoding could explain why hospitals are increasingly billing for the most complex treatment
      Beyond the Byline: Insurers are betting on virtual-first plans as COVID-19 shifts care pathways
    • James garvert neustar healthcare insider podcast image
      Building on basics
      Healthcare Insider Podcast Episode Art - Premier
      Why Roger Weems and other consultants are leaving the big firms to join Premier
      James garvert neustar healthcare insider podcast image
      Outreach during COVID-19
      ann barnes healthcare insider podcast image
      Leading with intention to promote diversity and inclusion
    • The Check Up: Matt Eyles
      The Check Up: Matt Eyles of AHIP
      The Check Up: Dr. Tom Shanley
      The Check Up: Dr. Tom Shanley of Lurie Children’s Hospital of Chicago
      The Check Up: Dr. Harold Paz
      The Check Up: Dr. Harold Paz of Wexner Medical Center at Ohio State University
      The Check Up: Pat Schou
      The Check Up: Pat Schou of the Illinois Critical Access Hospital Network
    • ivana naeymi-rad one on one intelligent medical objects
      Video: Ivana Naeymi Rad of Intelligent Medical Objects
  • MORE +
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Insurance
December 22, 2016 12:00 AM

Medicare Advantage still 'only safe game in town' for insurers

Shelby Livingston
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    While Medicare Advantage plans added nearly 900,000 members in 2016, enrollment is growing at a slower pace. Still, experts say the future of Medicare Advantage will be lucrative for insurers.

    “It's the only safe game in town, in all of health insurance,” said John Gorman, a former CMS official who is now a healthcare consultant in Washington.

    Enrollment in Medicare Advantage, the private, managed care version of the federal health program for seniors, reached nearly 18.7 million as of Dec. 1, according to the latest federal data.

    2016 Medicare Advantage enrollment

    UnitedHealth, Humana, Kaiser Permanente and Aetna held the throne for the most Medicare Advantage plan members. Enrollment in UnitedHealth's Medicare Advantage plans grew 13.2% to just shy of 4 million members, while enrollment in Aetna's grew 8.9% in 2016. Kaiser Permanente's Advantage plans grew by 5.1%

    Humana, though still No. 2 in plan members behind UnitedHealth, lost nearly 40,000 plan members this year when a large group account went to a private exchange in January.

    And Cigna, which was sanctioned by CMS in January for failing to comply with the agency's Medicare rules, only enrolled about 4,000 members in 2016. Because of the sanctions, Cigna wasn't able to participate in Medicare's annual enrollment period, which ran from Oct. 15 to Dec. 7. If the Bloomfield, Conn.-based insurer doesn't fix the problems soon, it could see its Medicare membership plummet.

    Cigna and Humana were both hit by lower quality ratings, which may deter would-be enrollees from picking their plans.

    Medicaid managed care insurer Centene, which has been investing heavily in its Medicare Advantage business, saw enrollment explode to more than 302,000 from about 34,000 last year, largely due to its recent acquisition of Health Net.

    While Medicare Advantage enrollment grew 5% in the 12 months since Dec. 1, it has slowed in the last couple of years. It was up 6.8% year over year at the end of 2015 and 9.8% in 2014.

    Part of the slowdown can be attributed to funding cuts imposed by the Affordable Care Act starting in 2012 and phased in over the last five years, Gorman said. Those cuts were devised to help offset the cost the ACA exchanges and bring Advantage payment rates in line with traditional Medicare.

    Medicare Advantage rates are based on the trends and utilization of traditional fee-for-service Medicare plans and adjusted for plan members' risk scores. Before the ACA, Medicare was paying private plans at a much higher rate than the cost of fee-for-service benefits. They reached a high of 114% of traditional Medicare payments in 2009. But the Medicare Payment Advisory Commission said in December that payment rates have evened out.

    “This was going to be the leanest year in terms of the benchmark payments to the plans,” Gorman said. In response to the cuts, plans reduced benefits and raised premiums, among other cost-saving measures. Plans are likely to see a boost in payments in 2018, he said. “Then you'll see a return to richer benefit designs with lower premiums and out-of-pocket costs.”

    Gretchen Jacobson, an associate director with the Kaiser Family Foundation's program on Medicare policy, said there's not enough data available to know if Medicare Advantage benefit designs have truly gotten skinnier because of the funding cuts. But premiums, she said, have been relatively flat while caps on out-of-pocket costs have increased 25% on average since 2011.

    Gorman said he expects annual growth in Medicare Advantage enrollment to hover between 5% and 7% in the coming years barring any major legislative changes to the market. It will be the safest option for insurers as the Trump administration and Republicans in Congress work on legislation dismantling the ACA, which many observers worry will cause the individual insurance market to collapse unless a replacement plan is adopted at the same time.

    And while Republicans are also signaling they want to overhaul Medicare, it's unlikely they would do anything to undermine the Advantage program.

    Getty Images
    President-elect Donald Trump and House Speaker Paul Ryan signaled they will move quickly to repeal the ACA.

    House Speaker Paul Ryan favors turning Medicare into a premium support system. Beneficiaries would receive vouchers to purchase a private plan or traditional Medicare coverage. The specific implications for insurers are unclear because “everything depends upon the little fine details,” and so far, there are few details available, Jacobson said.

    Gorman, however, said the model “would be gasoline on the fire” of Advantage enrollment. Regardless, he said, insurers will take steps to expand their footprints in the program through mergers—like Centene's Health Net deal—and entering new markets.

    In November, WellCare Health Plans said it would acquire Medicare insurer Universal American Corp. for $800 million. While Medicare Advantage already represents about 27% of WellCare's annual revenue, the deal with Universal American is likely to add to that significantly. Moreover, about 70% of Universal American's 114,000 Medicare Advantage members are in plans with at least four stars. That'll boost WellCare's overall Medicare Advantage plan quality ratings, which have been low.

    Aetna's Medicare Advantage business will soar if it clinches the pending acquisition of Humana. Even after selling off Advantage assets to Molina, which Aetna proposed as a way to resolve the U.S. Justice Department's antitrust concerns, the deal would probably still put the combined company ahead of UnitedHealth as the biggest Advantage carrier.

    A trial on the Justice Department's antitrust challenge wrapped up Dec. 21 and a decision is expected by mid-January. The case hinges on whether the judge buys Aetna's argument that Advantage plans compete with traditional Medicare.

    More than 2,000 Advantage plans will be offered in 2017. A quarter of all Medicare beneficiaries will have a choice of plans sold by three or fewer insurers, according to a Kaiser Family Foundation brief. The average beneficiary, though, has a choice of plans from six companies and 19 plans.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Cigna and Oscar expand their small business partnership
    Cigna and Oscar expand their small business partnership
    5 things to know about Agilon Health's proposed IPO
    5 things to know about Agilon Health's proposed IPO
    Sponsored Content
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS
    • Instagram

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    MDHC_Logotype_white
    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • News
      • This Week's News
      • COVID-19
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition
    • Insights
      • ACA 10 Years After
      • Best Practices
      • Special Reports
      • Innovations
    • Transformation
      • Patients
      • Operations
      • Care Delivery
      • Payment
    • Data/Lists
      • Rankings/Lists
      • Interactive Databases
      • Data Points
    • Op-Ed
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Awards
      • Award Programs
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Minorities in Healthcare
          • - Luminaries
          • - Top 25 Minority Leaders
          • - Minorities to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Nominate
      • Previous Award Programs
        • Excellence in Nursing Awards
        • Design Awards
        • Top 25 COOs in Healthcare
      • Other Award Programs
        • 100 Top Hospitals
        • ACHE Awards
    • Events
      • Conferences
        • Women Leaders in Healthcare Conference
        • Social Determinants of Health Symposium
        • Healthcare Transformation Summit
        • Leadership Symposium
        • Virtual Briefings
          • - Hospital of the Future
          • - Mental Health
          • - Patient Safety & Quality
          • - Strategic Marketing
          • - Virtual Health
          • - Workplace of the Future
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Minority Leaders Gala
        • Top 25 Women Leaders Gala
      • Webinars
      • COVID-19 Event Tracker
    • Listen
      • Podcast - Next Up
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • MORE +
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing