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Medicare PDP Membership up 400,000 Year-over-year

 

April 4, 2018

 

Medicare stand-alone prescription drug plans (PDPs) covered 25.5 million members as of March 1, 2018.  With an aggregate gain of 1.6% net enrollees between March 2017 and March 2018, PDP growth is down slightly from the 1.7% net enrollees gained between March 2016 and March 2017.  There are currently 51 organizations competing in this segment as of March 2018 and that number continues to decline each year.  Nine companies have greater than 300,000 members and command 93.5% of the PDP market.  Five of these plans control 83% of the market covering 2 million members or more. CVS Caremark covers the largest number of people in PDPs and saw the most significant increase in enrollment among the top five plans, year-over-year.   

Many companies are evaluating how their 2018 Medicare Advantage and PDP results compared to expectations and to the local competition by using tools such as Mark Farrah Associates’ (MFA) Medicare Business Online™ and Health Coverage Portal™.  Additionally, using MFA’s Medicare Benefits Analyzer (MBA), health companies are comparing and analyzing 2018 benefit packages and developing strategies to offer 2019 products that will attract and benefit seniors while ensuring the company is not adversely selected.  This brief assesses PDP plan performance, analyzes market share for the leading companies and evaluates market penetration by state as of March 1, 2018.

PDP Enrollment Growth

Stand-alone prescription drug plans (PDPs), also referred to as Medicare Part D stand-alone plans, enrolled 25.5 million people as of March 1, 2018, an increase of approximately 400,000 enrollees from 25.1 million in March of 2017.  PDP plans provide prescription drug coverage for 42% of the 61.2 million people eligible for Medicare as of March 2018.  Enrollment in products sold to individuals increased by over 307,000 to 20.6 million year-over-year.  While only 4.5 million Medicare beneficiaries were enrolled in employer group PDPs as of March 1, 2018, group enrollment grew by approximately 84,000 members since March 2017.  It is important to note this assessment is reporting on Stand-alone PDP only and 18.3 million Medicare Advantage with prescription drug plan (MA-PD) members are not included in this analysis.

  

Leading Plan Performance

Per the chart below, five companies control 83% of the PDP market.  CVS Caremark, with 6.1 million PDP beneficiaries, leads in this segment in terms of overall membership.  It serves 24% of all PDP enrollees, up from 22% one year ago.  Five additional companies covered more than 1 million PDP members each as of March 2018: UnitedHealth, Humana, Express Scripts, Aetna and WellCare.

March 2018 Top PDP Organizations with Greater than 300,000 Members
  Parent   Mar-17   Mar-18   Percent Growth   Mar-2018 Market Share
 CVS CAREMARK 5,524,981  6,121,369  10.8%  24.0% 
 UNITEDHEALTH 5,374,488   5,403,946  0.5%  21.2% 
 HUMANA 5,080,344  4,932,043  -2.9%  19.3% 
 EXPRESS       SCRIPTS 2,758,961  2,478,587  -10.2%  9.7% 
 AETNA 2,072,879  2,162,105  4.3%  8.5% 
 WELLCARE 1,104,443  1,086,751  -1.6%  4.3% 
 CIGNA 860,903  790,891  -8.1%  3.1% 
 ENVISION INS   CO 326,969  523,019  60.0%  2.0% 
 HCSC 349,614  355,366  1.6%  1.4% 
 Subtotal 23,453,582  23,854,077  1.7%  93.5% 
 All Others 1,667,348  1,666,889  0.0%  6.5% 
 Total 25,120,930  25,520,966  1.6%  100.0% 
Source: Medicare Business Online™, Mark Farrah Associates, presenting data from CMS enrollment reports

CVS Caremark saw a significant increase in membership with 596,000 new enrollees between March 2017 and March 2018. CVS announced in December of 2017 that it agreed to buy Aetna for $69 billion in an effort to increase its competitive edge and potentially amass even more market share in pharmacy, pharmacy benefit management (PBM), and health insurance business.  A CVS-Aetna merger could easily disrupt the health-care landscape and will most likely put pressure on other major players in the stand-alone prescription drug industry.  Company shareholders voted on March 13, 2018 to approve the merger and the deal is expected to close in the second half of 2018 pending federal government approval.  

Envison experienced the most sizable percentage of year-over-year enrollment growth among the top PDP carriers with over 300,000 members, with a 60% gain in membership.  Aetna and UnitedHealth also had enrollment increases with 89,000 and 29,000 new members, respectively.  Key to UnitedHealth’s membership gains are the continued increases in its AARP MedicareRx Walgreens (PDP) plan.

PDP Organizations with the Largest Gains from March 2017 to March 2018
  Parent   Mar-17   Mar-18   Growth 2017-2018   Percent Change
 CVS CAREMARK 5,524,981  6,121,369  596,388  10.8% 
 ENVISION INS   CO 326,969  523,019  196,050  60.0% 
 AETNA 2,071,879  2,162,105  89,226  4.3% 
 UNITEDHEALTH 5,374,488  5,403,946  29,458  0.5% 
 BCBS RI &   BCBS  MA &   BCBS VT &   WELLPOINT 157,705  170,302  12,597  8.0% 
 DEAN HLTH 38,061  50,064  12,543  33.0% 
 BCBS OF MN   GRP 3,985  16,327  12,342  309.7% 
 Subtotal 13,499,068  14,447,672  948,604  7.0% 
 All Others 11,621,862  11,073,294  -548,568  -4.7% 
 Total 25,120,930  25,520,966  400,036  1.6% 
Source: Medicare Business Online™, Mark Farrah Associates, presenting data from CMS enrollment reports

 

PDP Market Penetration by State

Stand-alone Prescription Drug Plan enrollment increased in all but seven states as of March 1, 2018.  Although the number of PDPs being offered continues to decline, net membership gains totaled approximately 460,000 nationally.  Per the map below, California, Massachusetts and Virginia experienced the most significant enrollment gains with increases of 30,000 members or more.  California, with over 2.2 million members with prescription drug coverage, saw the most sizeable increase of 71,000 more PDP members from the prior year.  Connecticut experienced the largest aggregate decrease of over 33,000 members, year-over-year.  This was chiefly due to a change in Connecticut’s state retiree health plan changing from CVS Caremark to a UnitedHealth Medicare Advantage plan which includes Part D coverage.  As the number of seniors entering retirement increases each year, insurers will continue to invest in PDP growth opportunities and Mark Farrah Associates will continue to monitor enrollment and industry shifts in this highly competitive Medicare segment.

PDP Market Penetration by State

Stand-alone Prescription Drug Plan enrollment increased in all but seven states as of March 1, 2018.  Although the number of PDPs being offered continues to decline, net membership gains totaled approximately 460,000 nationally.  Per the map below, California, Massachusetts and Virginia experienced the most significant enrollment gains with increases of 30,000 members or more.  California, with over 2.2 million members with prescription drug coverage, saw the most sizeable increase of 71,000 more PDP members from the prior year.  Connecticut experienced the largest aggregate decrease of over 33,000 members, year-over-year.  This was chiefly due to a change in Connecticut’s state retiree health plan changing from CVS Caremark to a UnitedHealth Medicare Advantage plan which includes Part D coverage.  As the number of seniors entering retirement increases each year, insurers will continue to invest in PDP growth opportunities and Mark Farrah Associates will continue to monitor enrollment and industry shifts in this highly competitive Medicare segment.

About this Data

This brief is based on an analysis of enrollment data for Prescription Drug Plans (PDPs) released by the Centers for Medicare & Medicaid Services (CMS).  Mark Farrah Associates’ Medicare Business Online™ simplifies the tracking of monthly Medicare Advantage and PDP enrollment by competitor.  Enrollment data is updated monthly as soon as CMS releases new data to save organizations from having to aggregate and organize data themselves. 

About Mark Farrah Associates (MFA)

Mark Farrah Associates (MFA) is a leading data aggregator and publisher providing health plan market data and analysis tools for the healthcare industry.  MFA’s Medicare Business Online™ (MBO) product simplifies the tracking of monthly Medicare Advantage and PDP enrollment by competitor.  The Medicare Benefits Analyzer™ presents benefit copay comparisons across hundreds of benefit attributes by plan as reported in the Plan Finder on Medicare.gov.  Med Supp Market Data offers enrollment and financial insights for companies interested in Medicare Supplement business.  Our product portfolio also includes Health Coverage Portal™ (with Supplemental Health Care Exhibit and MLR data), County Health Coverage™, and Health Plans USA™.

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