More provider-sponsored health plans in the Medicare Advantage market

Nearly 60 percent of new entrants to the Medicare Advantage (MA) market are provider-sponsored health plans, according to a new report from Avalere Health.

More hospitals and health systems now offer their own health plans to consumers and many are jumping in to offer insurance through MA, according to the healthcare consulting firm's report. In total, 70 provider-sponsored organizations will offer 403 MA plans in 41 states in 2016 and will serve 35 million Medicare beneficiaries, according to the analysis, which was funded by the insurance giant Aetna.

A look at the new entrants into MA in 2016 supports the trend toward provider-sponsored plan participation, the report said. Eleven out of 19 new organizations participating in MA are provider-sponsored. In total, 64 percent of Medicare beneficiaries will have access to a provider-sponsored MA plan.

Aetna CEO Mark Bertolini has argued there will be plenty of competition in MA plans even after his company's planned merger with Humana. During a Senate hearing on Capitol Hill last fall on consolidation in the health insurance industry, Bertolini testified that despite arguments to the contrary, "robust choice" will remain in the MA Advantage market if the Aetna-Humana deal is approved. 

Aetna's position is in sharp contrast to the American Hospital Association's stance. The hospital lobbying group said last fall the merger between the two insurance giants would lessen MA competition and cited a report that found MA markets in 97 percent of U.S. counties already have little to no competition.

As well as getting into the MA market, recent research also shows that provider-led organizations are increasingly offering plans on the insurance marketplaces created by the Affordable Care Act. Still rare, provider-led plans cover only a fraction of insured Americans, with only about 18 million members, most of them covered in Medicaid managed care or MA plans.

The Avalere study predicted that provider-sponsored plans will continue to grow. "In particular, as providers gain experience bearing risk and develop better care delivery models, they will continue to offer plans alongside traditional insurers, whether in Medicare or the commercial market," the report said.

To learn more:
- read the report (.pdf)


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