Recent data shows that Medicare Advantage (MA) spending surged in 2023. This comes along with a number of enrollment and other member-related trends that payers should also be aware of.
Rising Enrollment
January 2024 reports indicate that the number of MA enrollees is steadily rising, with subscriber numbers presently sitting at 32 million. Researchers anticipate this number will increase to 34 million before January 2025. Over 50% of individuals eligible for both Medicaid and MA (also known as dual-eligibility) are also enrolled in an MA plan, and nearly three-quarters of all MA plan subscribers are eligible for partial Medicaid benefits.
Despite more interest from dual-eligible individuals and seniors, MA plan offerings still need to reflect this expansion. In fact, the opposite is happening. The number of available MA plans has gone down by 10% in the first half of 2024 – with 3,665 plans currently available.
Rising enrollment numbers and fewer offerings mean that payers are likely to see even more new subscribers in the last half of this year. This may mean that subscribers experience longer wait times when contacting their insurer, and they may also need help initially getting a plan that is best suited to their needs.
Demographic Shift & Impact of Price Increases
There has also been a gradual change in the type of individuals enrolling in MA. This year has brought about an increase in MA subscribers with yearly incomes totaling less than $25,000. Current data finds that 38% of MA members fall into this category compared to 23% who receive traditional Medicare. In addition, over half of MA enrollees (54%) are people of color.
As enrollment increases, premiums are also expected to do the same. This year’s Medicare Advantage premiums are planned to rise by 5.1%, totaling an average increase of just $1.08. The impact of rate increases on long-term profitability should be taken into consideration. Higher rates could impact the growing number of fixed-income enrollees, potentially leading to lower enrollment among price-sensitive individuals.
How Can Payers Adapt and Protect Their Bottom Line?
- Ensure health plan representatives are equipped to manage customer service logistics that can be expected with continually rising enrollment numbers.
- Conduct a provider network assessment to ensure continued adequacy as member enrollment increases.
- Focus on member collaboration to secure satisfaction and boost health outcomes. Work to ensure all members’ plans are a good fit for them and make adjustments as needed.
- Reduce long-term expenditures by increasing high-risk members’ awareness of the preventative care screenings available to them such as blood pressure monitoring, heart health tests, and blood glucose checks.
- Modify plan designs to balance premium increases with cost-sharing reductions or expanded benefits to retain and attract enrollees.