The 5 states driving MA market penetration growth

Increased market penetration has been a significant driver of Medicare Advantage plan membership over the last three years, according to a new brief from Mark Farrah Associates. This has been especially true in five states where MA penetration growth exceeded the national rate.

Insurers offering MA plans have increased their market penetration--the number of MA customers divided by the number of Medicare-eligible seniors--from an average of 28.7 percent to 32 percent from December 2013 to June 2016. That 10.5 percent growth rate would be only 7.1 percent if it were not for the impact of Illinois, North Carolina, Georgia, Texas and Michigan. Here’s a snapshot of the MA market in those five states:

  • Illinois had the highest level of growth in MA market penetration, going from 11 percent to nearly 22 percent. Yet its current level of market penetration is lower than the national average of 32 percent. UnitedHealth has the most members, but Health Care Service Corporation's membership has grown considerably.
  • Since 2013, market penetration increased in North Carolina from 20.6 percent to 30.5 percent. UnitedHealth leads the state in members, and Humana has captured the largest share of new membership in the last 3½ years.
  • Georgia’s growth rate of 22.2 percent since 2013 resulted in its current MA market penetration--34.7 percent--exceeding the national average. UnitedHealth has almost 46 percent of the market share in the state, but it has lost market share in the last three years thanks to Aetna and Cigna’s aggressive growth strategy.
  • At 32.9 percent, Texas’ MA market penetration now exceeds the national average. Led by United, four of the state’s top five largest MA plans experienced double-digit membership growth from 2013 to midyear 2016.
  • Michigan’s MA market penetration also exceeds the national average, having grown from 27.7 percent to 34.4 percent. Two plans--Blue Cross Blue Shield of Michigan and Spectrum Health--control 70 percent of the market share.

As more baby boomers age and MA plans continue to draw the newly eligible and those enrolled in traditional Medicare, “growth opportunities abound in the Medicare Advantage market,” the brief concludes. A recent study, however, pointed out that the traditional Medicare population differs considerably from MA beneficiaries.

- here’s the brief