Membership Growth

CMS in its 2024 Advance Notice projected that Medicare Advantage organizations can expect an average estimated change in revenue of 1.03%, when taking into account an average increase in risk scores of 3.3%. Even though analysts expected that rate to fall well below the robust 8% CMS predicted in its preliminary rate notice for 2023, they characterized it as low when excluding the risk scoring trend. The 2024 projection is also based on an effective growth rate of 2.09%, which CMS this time last year estimated would be 4.75%. Additionally, CMS will continue to apply the statutory minimum coding intensity adjustment of 5.9% to offset the effects of higher levels of coding intensity in MA relative to fee-for-service (FFS) Medicare. That coding intensity adjustment generated much discussion in comment letters on the Advance Notice last year. When asked during a Feb. 1 call with reporters why CMS again opted for the minimum adjustment, CMS Deputy Administrator and Center for Medicare Director Meena Seshamani, M.D., Ph.D., told AIS Health: “We continue to analyze and evaluate MA coding patterns, and 5.9% we feel is adequate at this time, and we continue to look at coding pattern differences, how we set that pattern adjustment [and] how that’s applied…in future years as well.” The preliminary rate notice also included technical updates to the risk adjustment model, including a reliance on condition categories from the ICD-10 classification system (instead of the ICD-9 system) and a shift to more recent underlying FFS data years to reflect 2018 diagnoses and 2019 expenditures.

During the open enrollment period that ended on Jan. 15 in most states, 16,306,448 people selected an Affordable Care Act marketplace plan, the Biden administration said on Jan. 25. That total represents a 13% increase compared to the same time last year, and accounts for plan selections through Jan. 15 on the 33 states using HealthCare.gov and through Jan. 14 or 15 on the 18 state-based marketplaces. While record-breaking for the exchanges, the signup total for 2023 is not final, as open enrollment continued through Jan. 23 for Massachusetts Health Connector and through Jan. 31 for DC Health Link, Covered California, Get Covered New Jersey, New York State of Health and Health Source Rhode Island. Still, the Biden administration hailed the new enrollment figures, with CMS Administrator Chiquita Brooks-LaSure stating: “On the tenth anniversary of the ACA Marketplaces, the numbers speak for themselves: more people signed up for plans this year than ever before, and the uninsured rate is at an all-time low.”

Elevance Health has signed a deal to acquire Blue Cross and Blue Shield of Louisiana, the companies said on Jan. 23. With 1,049,194 members, BCBS of Louisiana is currently the second-largest health insurer in the state, according to AIS’s Directory of Health Plans. Combined, the two insurers will surpass the current market leader, UnitedHealthcare, with over 1.4 million enrollees in the state.

The acquisition builds on an existing joint ownership of Healthy Blue, which offers Medicaid and Medicare dual eligible coverage. The deal would expand Elevance’s presence in the state by 281%. If the deal closes, Elevance, the largest Blue Cross and Blue Shield affiliate with almost 37.6 million enrollees, will operate as a Blues licensee in 15 states.

Elevance Health, Inc. on Jan. 23 announced a deal to acquire Blue Cross and Blue Shield of Louisiana, breaking what one analyst called a nearly two-decade “ice age” in which no major consolidation among Blues took place. Experts say it’s unclear whether the tie-up is a harbinger of a flurry of similar dealmaking, but they suggest that the time may be right to see additional mergers and acquisitions (M&A) among Blues affiliates.

“It has been a long drought” since Blues plans conducted major M&A, observes Ashraf Shehata, national sector lead for health care and life sciences at KPMG. And during that time, the country’s largest health plans have gotten larger and more diversified. “So I think…it’s probably time for the industry, especially on the Blue side, to consolidate a bit more,” Shehata tells AIS Health, a division of MMIT.

Medicare Advantage now enrolls more than 30.6 million individuals, including more than 25 million in individual MA plans, according to the latest monthly enrollment data from CMS. Industry trade group AHIP called the information “cause to celebrate,” noting that “just 10 years ago, the program had 13 million enrollees.” Enrollment in the private Medicare plans is likely to rise more in the short term, however, as the 30.6 million figure reflects only those signups accepted through Dec. 2, 2022, and thus does not capture the full outcome of the Annual Election Period that ran from Oct. 15 through Dec. 7, Citi analyst Jason Cassorla pointed out in a Jan. 17 research note.

The percentage of Americans who said they or a family member put off medical treatment due to cost rose to 38% in 2022, representing a 12-percentage-point increase compared to 2021. That’s according to a new Gallup poll, which noted that the percentage of Americans reporting deferring care due to cost was at its highest level since Gallup began its survey in 2001. That finding comes after inflation reached the highest point in 40 years in 2022, and in the wake of “two consecutive 26% readings during the COVID-19 pandemic that were the lowest since 2004.” Gallup also added that “lower-income adults, younger adults and women in the U.S. have consistently been more likely than their counterparts to say they or a family member have delayed care for a serious medical condition.”

After a lackluster 2022 open enrollment season characterized by churn associated with its external marketing channels, Humana Inc. is touting above-industry growth after the 2023 Annual Election Period (AEP) that concluded last month. Presenting at the 41st Annual J.P. Morgan (JPM) Healthcare Conference in San Francisco, Humana Chief Financial Officer Susan Diamond said investments in the company’s products, sales channels and other aspects of its Medicare Advantage business are helping it “get back to an industry leading position” and achieve double-digit percentage enrollment gains this year.

According to the latest monthly enrollment data posted by CMS, MA now enrolls more than 30.6 million individuals, including more than 25 million in individual MA plans. That data reflects enrollment as of the Jan. 1, 2023, payment date (i.e., enrollment accepted through Dec. 2, 2022). Those figures do not reflect the full outcome of the AEP, which ran from Oct. 15 through Dec. 7, and are lower than CMS’s projection of 31.8 million for 2023, pointed out Citi’s Jason Cassorla in a Jan. 17 investor note. “[W]e expect enrollment to rise in the final 5 days of AEP and subsequently grow throughout 2023 considering both age-ins” and the Open Enrollment Period that runs from Jan. 1 through March 31, he wrote.

The number of seniors who switched from traditional Medicare to Medicare Advantage increased annually from 2016 to 2020, according to new research published in JAMA Health Forum. The switch rate from traditional Medicare to MA grew to 6.8% in 2020 — more than three times higher than the switch rate from MA to traditional Medicare. This trend was noticed across populations with a variety of traits, including age, race and mortality status, and was particularly strong among Medicare-Medicaid dual eligibles. Switch rates from MA to traditional Medicare, meanwhile, are largely on the decline, but still more common among duals than non-duals. The study’s authors suggested this movement was a contributor to overall MA growth, noting that MA’s share of Medicare enrollment is projected to exceed 50% this year. They also observed that switching accounted for a growing share of new MA enrollment growth, rising from 49% in 2016 to 67% in 2020.

The top 25 Medicare Advantage insurers enrolled a combined 26.3 million lives, or 87.9% of the national market, as of the fourth quarter of 2022, according to AIS’s Directory of Health Plans. Among the large national insurers, only market leader UnitedHealthcare and Centene Corp. — which has rapidly expanded into MA following its 2020 acquisition of WellCare — each saw year-over-year enrollment growth of more than 10%. Centene expanded to 327 new counties for the 2022 plan year, compared to United’s 276. Cigna Corp., meanwhile, saw its MA enrollment decline by 5.8%, despite expanding to three new states for 2022. The company will bring its MA offerings to New York and Kentucky for the 2023 plan year. Among regional insurers, Guidewell Mutual Holding Corp., the parent company of Florida Blue, saw explosive growth of nearly 75% following its February acquisition of Triple-S Management Corp., one of the largest MA insurers in Puerto Rico. Highmark Health, SCAN Health Plan and Blue Cross and Blue Shield of Minnesota all saw enrollment gains of more than 20%. See the complete list in the table below.

While making their financial projections for 2023, health insurers have had to acknowledge that the timing of a major headwind — the resumption of Medicaid eligibility redeterminations — continued to be a question mark. Now, if a newly released draft of Congress’ year-end spending bill is passed as written, that uncertainty will be removed and replaced with a firm date: April 1.

Industry observers tell AIS Health, a division of MMIT, that it’s helpful for both state governments and managed care organizations to have a definite answer about when millions of people will start losing their Medicaid eligibility — although the event itself remains a net negative for MCOs.

Almost 450,000 people in Georgia could gain health coverage if the state expands Medicaid eligibility to nonelderly individuals with incomes up to 138% of the federal poverty level, according to an Urban Institute analysis. The statewide uninsurance rate would fall from 14.7% to 10.0% with Medicaid expansion. By geographic area, decreases in uninsurance rates would vary from 3.9 percentage points in the Atlanta area to 6.3 percentage points in the southern area. However, Republican Gov. Brian Kemp’s victory over Democrat Stacey Abrams, who made Medicaid expansion a core pillar of her campaign in the midterm election, may stymie Georgia Democrats’ long-standing push for full Medicaid expansion. Currently, Centene Corp. dominates the state’s Medicaid managed care market, with more than 1.04 million members as of December 2022.