Medicare Advantage plans signed up another 2.3 million beneficiaries for the 2022 coverage year, with the program now making up 45% of all Medicare enrollment, a new study found.
The Chartis Group released a study Friday that found total 2022 enrollment in Medicare grew by 1 million beneficiaries, a spike of 1.6% over 2021. MA plans added 2.3 million beneficiaries overall, with part of that growth coming at the expense of 1.3 million people transitioning from traditional Medicare to MA.
“The magnitude of this shift is stark—while Medicare Advantage enrollment has been robust, original Medicare contraction has been accelerating,” the study said.
Chartis found the overall Medicare enrollment growth of 1.6% over 2021 was down compared to prior years. For instance, Medicare enrollment grew by 2.6% from 2019 to 2020.
“We believe the preponderance of this deceleration trend can be attributed to COVID-19 deaths among the 65+ population,” Chartis said. “The country lost more than 300,000 individuals aged 65+ due to COVID-19 in 2020 and again in 2021.”
But MA plan enrollment continued to increase, and every state saw MA growth ranging from 5% to 59%.
“Most importantly, 11 states now have half or more of their eligible populations enrolled in a Medicare Advantage product, up from only three states last year,” the study said. “While mostly symbolic, this is an important benchmark since it means that the private Medicare landscape is the rule, no longer the exception as it has been historically."
The MA market now makes up 45% of all Medicare enrollment, up by three percentage points compared to 2021 and up from 37% in 2019.
For-profit plans continued to gain market share at the expense of nonprofit and Blues plans.
Chartis showed that for 2022, nonprofits ceded 0.9% and Blues plans 0.2% of market share to for-profit competitors.
For-profit MA enrollment has grown at a rate of 11.3% per year since 2019, compared to growth rates of 5.5% for Blues and 4% for nonprofits. The growth rates are likely not enough for Blues and nonprofits to keep market share with the MA market growing by 9%.
In 2022, 85% of all new enrollment went to for-profit plans; United, Centene and Aetna led the pack.
“United alone captured one-third of all enrollment nationally,” the study said. “Centene having acquired WellCare last year to catapult itself to the Medicare Advantage leader board, had organic growth of 338,000 lives, or nearly 15% of all enrollment this year.”
Meanwhile, the special needs plan market also has been expanding at a rapid pace, growing at nearly 16% a year and at 20% last year.
“This important segment now represents 16.2% of the entire Medicare Advantage market or nearly 1 in 6 beneficiaries,” Chartis said.
The study was based on an analysis of MA enrollment, plan and pricing data from the Centers for Medicare & Medicaid Services from January 2019 to January 2022.
MA has continued to become a lucrative space for insurers, likely furthering more expansion in the coming years. Chartis expects MA enrollment will outpace traditional Medicare by 2025.