Medicare Advantage 2024 enrollment: Winners and losers

UnitedHealth Group and Humana continue to dominate Medicare Advantage but their memberships grew more slowly than the industry at large during 2024 open enrollment, according to data the Centers for Medicare and Medicaid Services released Wednesday.

Competition from relatively smaller players shook up the Medicare Advantage market a bit as Aetna, several Blue Cross and Blue Shield insurers and a pair of startups enjoyed substantial gains during the sign-up period that ran from Nov. 1 to Dec. 7. Medicare Advantage enrollment increased 2.9% to 32.9 million as of Jan. 1, CMS data show.

Related: Layoffs, benefit cuts follow Medicare Advantage pay reductions

Open enrollment is a crucial time for Medicare Advantage carriers because all enrollees have an opportunity to opt into the program—or to switch plans. The 2024 sign-up campaign was especially important as insurers contended with greater competition and a less-favorable regulatory environment. CMS has tightened the star ratings quality program, reduced capitation payments to reflect updated risk-adjustment methodology and beefed up enforcement of overpayments in recent years.

The promise of big margins has intensified the race to capture Medicare Advantage membership, and health insurers spend months debating the right mix of benefits, providers and marketing to attract the most appealing, lower-cost beneficiaries.

Modern Healthcare analyzed CMS enrollment data for various types of Medicare Part C coverage, including Medicare Advantage plans with prescription drug coverage but excluding others, such as national Program of All-Inclusive Care for the Elderly plans, also known as PACE. In addition, membership tallies from insurers may fluctuate as companies and CMS finalize pending enrollments.

UnitedHealthcare and Humana continue to hold the largest market shares and recorded the second- and third-largest enrollment increases during the recent sign-up period. But UnitedHealthcare's 1.6% growth rate and Humana's 2% fell below the 2.9% industry average. Both companies, which declined interview requests, previously blamed their enrollment trends on increased competition.

Contentious contract negotiations with providers also may have hampered UnitedHealthcare enrollment, UnitedHealthcare CEO Brian Thompson said during an earnings call last week. “We did have some deals that came down to the wire, and I do think that had some impact,” he said.

CVS Health subsidiary Aetna recorded the greatest rate of Medicare Advantage enrollment growth, as sign-ups rose 15.8% to 3.9 million, the CMS data show. This marks a comeback from lackluster membership increases and diminished star ratings last year. Aetna, which did not respond to an interview request, has credited its strong sales to beneficiaries switching from rival plans.

Nonprofit Blue Cross and Blue Shield companies Health Care Service Corp., Highmark Health and Blue Cross Blue Shield of Michigan also reported above-average growth during open enrollment. Blue Cross carriers historically lagged for-profit insurers in Medicare Advantage, but have improved their standing in recent years. Health Care Service Corp., which sells Blue Cross and Blue Shield policies in five states, reportedly is in talks to acquire Cigna's HealthSpring Medicare Advantage business.

Health Care Service Corp., Highmark and Blue Cross Blue Shield of Michigan declined to make executives available for interviews.

Insurtechs Alignment Healthcare and Devoted Health also grew above industry average.

“We did not buy the market. The market came to us,” Alignment Healthcare CEO John Kao said. “We took share from United, SCAN, Elevance, Humana— evenly across the board from everybody."