Chartis Group: Medicare Advantage's growth is slowing. But don't panic just yet

Medicare Advantage (MA) sign-ups this year increased by 5.5% compared to the year before, a far cry from the 9% growth the program experienced in 2022, according to a new analysis. 

But experts say enrollment growth may just be returning to more normal, pre-pandemic levels.

The Chartis Group released an analysis Tuesday on MA enrollment for 2023 and found that larger for-profit plans are taking up more market share at the expense of their nonprofit counterparts. Experts said that while the growth wasn’t as strong as in prior years, it isn’t a cause for alarm for the massively popular market.

“We are certainly nowhere near peak enrollment, but every year growth is going to become increasingly more challenging just because you are starting from a higher bar each year,” said Nick Herro, principal with Chartis and a co-author of the analysis. “I think we will want to see what next year brings to see if this is a blip or the new status quo.”

For more on how inflation and labor shortages will impact MA, listen to the interview with Paul Ginsburg on our podcast Podnosis


Relying on data from the federal government, Chartis found that MA enrollment grew by 1.5 million beneficiaries this year. The figure which lags behind 2021 (2.3 million) and 2020 (2.2 million). 

The group also found that traditional Medicare sign-ups declined by 339,000 in 2023. 

Overall MA growth was 5.5% for 2023, down compared to the 9% growth the program experienced in 2022. However, the market sign-ups still outpaced the overall growth of seniors at 2%.

Researchers also found that special needs plans (SNPs) are making up more and more of the MA growth. 

“SNP enrollment is up 20% from 2022, driven by considerable [dual eligible SNP] enrollment gains,” the report found. 

The analysis found a mixed report for nonprofit MA plans. For the first time in years, Blues plans gained a market share of 0.2 percentage points. 

“While modest, this increase sits in stark contrast to remaining nonprofit plans, which saw a 0.8 percentage point share decline, continuing prior years’ losses,” the report said. 

Major MA player UnitedHealthcare, on the other hand, made up 55% of all new enrollment and Humana made up 23% of all new sign-ups.

Herro said the decline in market share among nonprofit plans has been an ongoing trend for several years. Part of the reason is that some nonprofits have a set geographic area they can sell into compared to larger nationwide plans. 

“The size of their market is more limited than a national plan,” he added. 

Some startup plans have also emerged as competitors for market share. Chartis found that startup plans such as Devoted Health made up 1.7% of all MA enrollment, an increase from 1.1% in 2019. 

New headwinds for MA?

The analysis comes amid a pivotal time for the MA program as insurers and the Biden administration are waging a public feud over proposed payment changes. 

The Centers for Medicare & Medicaid Services (CMS) released the proposed advance notice earlier this month that outlines payments for MA and Part D plans for 2024. The agency projected a 1% bump to MA plan payments, but insurers and related groups claim—if finalized—the rule will lead to a 2.27% cut to plans. 

Insurers point to changes to the MA risk model and lower quality bonus payments due to a decline in star ratings among several factors for the cut. They have also wanted CMS to give more information how the agency came to the 1% estimate. 

In addition, the agency in late January issued a new final rule that overhauls risk adjustment data validation audits. The goal is to ensure payments are more accurate by improving the audit process of comparing MA claims to the actual diagnosis and medical records. 

Herro was doubtful the new regulations would wind up becoming a major headwind for the MA market, especially as the pay rule comes a year after plans saw a major increase for 2022 and a decline in rates was inevitable.

“If last year was your expectation, then you were going to be disappointed in this year,” he said.

The changes to star ratings, which have caused an overall decline in ratings on average, could lead to economic changes for plans, Chartis’ analysis found. 

“This year, we saw 73% of Medicare Advantage enrollment in plans with 4+ stars, down 16 percentage points from 89% in 2022,” the analysis said. “Generally, scores returned to performance more akin to pre-pandemic, though the deviations increased considerably.”