Industry heavyweights CVS Health Aetna and Humana foresee Medicare Advantage membership losses next year.
Anticipated changes to health plan offerings and benefit design to achieve long-term business profitability could mean losing a significant portion of their Medicare Advantage membership, executives told investors at the Bank of America Securities Healthcare Conference on Tuesday.
Related: Medicare Advantage 2024 enrollment: Winners and losers
Both companies have lowered their private Medicare profit margin projections for 2024 and launched multiyear financial and operational improvement plans in response to unfavorable regulatory changes and a surprise jump in utilization.
Headed into next year, Aetna may adjust benefits, tighten its prior authorization policies, reassess its provider networks and exit markets, CVS Health Chief Financial Officer Tom Cowhey told investors. It will also reevaluate vision, dental, flexible spending cards, fitness and transportation benefits, he said. Aetna is also working with its employer Medicare Advantage customers on how to appropriately price their business, he said.
“Could we lose up to 10% of our existing Medicare members next year? That’s entirely possible, and that’s OK because we need to get this business back on track,” Cowhey said.
Aetna reported the largest membership growth —16.8% — during this year’s open enrollment period and counts 4.2 million Medicare Advantage members.
Humana Chief Financial Officer Susan Diamond said Aetna’s guidance made its team feel more secure as it considers cuts to its core insurance product for 2025. The insurer anticipates losing about 5% of its 6.1 million Medicare Advantage members, or a few hundred thousand enrollees, next year after it exits unprofitable markets and trims its plan options, she said.
“We expect to shrink. I don’t know who's going to grow in all of that. There’s so much we’re dealing with that hasn’t been done in the industry before,” Diamond said.
Conversely, UnitedHealth Group’s UnitedHealthcare insurance business appears to be better positioned for growth heading into 2025 given its strong product positioning, executives said.
UnitedHealthcare, the largest Medicare Advantage carrier with 7.8 million members, expects to grow at the same rate in 2025 as it did this year, UnitedHealth Group CEO Andrew Witty said. The insurer increased enrollment by 1.6% during the annual sign-up period for the 2024 plan year.
“The thing we don't want is unsustainable ups and downs in our performance in any particular regard,” Witty said. “You should just expect more of the same from us in terms of what we’re doing.”
Medicare Advantage insurers’ 2025 contract bids are due to the Centers for Medicare and Medicaid Services on June 3.
