The State of the Union in Medicare Advantage Has Never Been Stronger

February 3, 2012
|In Strategy
|By GHG Advisors

At long last the January 1 enrollment numbers are in from CMS and the State of the Union in Medicare Advantage has never been stronger.  Our favorite program hit almost 13 million enrollees last month.  Premiums are down 7% on average for 2012 and enrollment has grown by about 10% year-over-year from last January.  Hate on, haters — all the predictions of the demise of Medicare Advantage when the ACA passed are proving false and the program is bangin’.

CMS went on to say that:

  • On average, there are 26 Medicare Advantage plans to choose from in nearly every county across the country;
  • Access to Medicare Advantage remains strong: 99.7 percent of Medicare beneficiaries have access to a Medicare Advantage plan; and
  • Since 2010, when the Affordable Care Act was passed, Medicare Advantage premiums have fallen by 16 percent and enrollment has climbed by 17 percent.

“Not only are average premiums lower, but plans are better, with more beneficiaries enrolled in 4 and 5 star plans,” said CMS Acting Administrator Marilyn Tavenner. “The Affordable Care Act has strengthened Medicare Advantage by motivating plans to improve the quality of their coverage.”

“We’re seeing a very competitive landscape,” said Jon Blum, CMS’s deputy administrator. “The
plans seem to want to compete hard for their beneficiaries.”  The reason?  Health plans have never been more dependent on Medicare, which now represents upward of 30% of earnings on average for publicly-traded companies that dominate the program.  Since the passage of the ACA, it’s been a “make it work” moment, and the plans are winning for the most part.  Digging into the numbers on the market leaders we see the following:

  • Humana added 250,000 lives in two months, or growth of 12.9%
  • UnitedHealth added 132,000 lives
  • Coventry had a very strong AEP with growth of 12.2%
  • Health Net looked similarly strong with growth of 10.1% — after having been sanctioned by CMS last year.
Nancy-Ann DeParle, the President’s health care advisor, couldn’t help but gloat a little on her blog this morning.  “At the time the Affordable Care Act was passed, Republicans in Congress said the bill would virtually end the Medicare Advantage program. “Every one of them (in Medicare Advantage) will see their benefits go down,” “provisions in there are going to allow them to kill Medicare Advantage,” “if this passes, it is the end of Medicare Advantage as we know it,” are just a few of the incendiary charges Republicans made about the Affordable Care Act.  Premiums would go up, they claimed, and choice and enrollment would go down. Those predictions turned out to be wrong. Medicare Advantage is stronger than ever — offering more seniors better benefits, higher quality care and lower costs.”
Can’t argue.  2012 is shaping up to be another banner year for Medicare Advantage.