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Geographic expansions weren't the sole means big insurers used to increase Medicare Advantage enrollment, Ellis said.
Cigna and Humana complained that competitors underpriced Medicare Advantage plans and cut into their market share this year, Ellis said. Pricing is difficult to track because it varies from county to county, which makes it hard to determine what insurers may be strategically setting premiums at low rates, he said.
"It's not a sustainable strategy, and it would be more concerning to us than slower growth overall," Ellis said. "To the extent that these large insurers stick to service, benefits and maintain what they've been doing for a while, I think pricing for margin would benefit them."
Centene gained the greatest number of Medicare Advantage beneficiaries, increasing its enrollment 12.9% to 1.2 million.
This year, Centene expanded its reach to 327 new counties and three new states. The insurer also consolidated its Medicare brands under WellCare, which Centene acquired for $17 billion in 2019. The company holds nearly 4% of the Medicare Advantage market.
UnitedHealthcare also continued to dominate the marketplace and grew its membership 5.2% month-over-month to 7.9 million.
The UnitedHealth Group subsidiary expanded to 276 new counties this year and now controls nearly 28% of the market. The lion's share of new policyholders switched from local carriers or from Humana. UnitedHealthcare will cover up to 800,000 new enrollees this year, with about 75% moving over from individual and group Medicare Advantage plans and the rest from Medicare-Medicaid special needs plans.
Aetna grew membership at a higher rate than the market as a whole, and increased its rolls by 4% to 3 million. The CVS Health subsidiary expanded its Medicare Advantage footprint to 83 new counties and began offering Medicare-Medicaid special needs plans in Arkansas, Colorado, Delaware and Indiana. Aetna now covers nearly 11% of Medicare Advantage enrollees.
Aetna rolled out its first CVS-branded health plan this year and CVS Pharmacy's nearly 10,000-store retail footprint likely helped drive enrollment, said Ari Gottlieb, a principal at A2 Strategy Group. "It shows what putting agents and brokers in stores where seniors are visiting has the potential to actually drive enrollment," he said.
Anthem pursued a similar tactic by partnering with Kroger in Atlanta, Louisville, Kentucky, Cincinnati and southern Virginia, an arrangement that gives policyholders access to the grocery chain's 2,300 pharmacies and 200 clinics. Nevertheless, Anthem underperformed the Medicare Advantage market during enrollment for this year.
"It's been a competitive market. It remains a competitive market," Anthem CEO Gail Boudreaux told investors last quarter.
Cigna is the only large commercial insurer that ended the sign-up period with fewer Medicare Advantage policyholders than the year before.
Humana experienced slower enrollment growth after pricing conservatively for margin in 2022, according to a Bank of America report. Humana and UnitedHealthcare tend to lose customers to each other over time, the report says.
Unlike Humana, Cigna and Alignment Healthcare—which cite rivals' aggressive pricing with reducing their market share—UnitedHealthcare does not believe new entrants made the market more competitive.
"The MA market has been highly competitive for a number of years, and I don't see 2022 as a significant increase in the level of competitiveness," Tim Noel, CEO of UnitedHealthcare's Medicare and retirement division, told investors during the fourth quarter. "The trend of more entrants [and] better benefits has really been a multi-year one. We see this trend as being one that's very good for seniors and also one that's very good for the overall growth of the Medicare Advantage industry."
Insurtechs Devoted Health and Clover Health both increased membership at a faster clip than the overall market. Devoted Health credited recommendations from providers while Clover Health contends its broad networks attracted customers. Both companies deny underpricing their products and say large insurers cut into their market share.
In addition to startup insurers, Blue Cross and Blue Shield plans have been increasing their investment in Medicare Advantage over the past five years, Gottlieb said. During open enrollment, Blue Cross and Blue Shield of North Carolina grew membership 14.4% to nearly 82,000 members, for example.
Blue Cross and Blue Shield carriers traditionally had not focused on Medicare Advantage, but have made forays as the market continues to grow more quickly than other lines of business, Gottlieb said. These companies have the potential to transition their large commercial, individual and Medicaid customer bases to Medicare Advantage members as policyholders get older. This gives them an advantage over startup insurers and national insurers that may lack local provider and broker relationships, he said.
"How do they leverage their commercial book to convert folks as they age into Medicare?" Gottlieb said. "To the extent that they can create a seamless offering, there's a huge opportunity."