April 10, 2023
As the 2023 Medicare Open Enrollment season winds to a close, and beneficiaries and enrollees finalize their decisions, nearly half, 48.7%, of people eligible for Medicare have decided on Medicare Advantage plans, up from 46.1% in March of 2022. Based on the Centers for Medicare & Medicaid Services (CMS) enrollment data for March 1, 2023, total Medicare Advantage (MA), including Medicare Advantage with Prescription Drug Plan (MA-PD) membership, stood at 31,753,301 with a net gain of 2,276,490 members from March 1, 2022. Medicare stand-alone prescription drug plans (PDPs) covered 22,533,411 members as of March 1, 2023, a net decrease of 910,978 from the previous year. Surprisingly, nearly 80 percent of MA enrollees selected one of 10 insurers, out of the 294 offering plans in 2023. This brief assesses Medicare Advantage and PDP performance, market share and market penetration by state as of March 1, 2023.
Medicare Advantage (MA) Membership
Medicare Advantage (MA) market penetration remains strong; however, there is still abundant opportunity for growth with 48.7% of the nearly 65.2 million people eligible for Medicare enrolled in a MA plan. According to CMS Medicare Advantage enrollment reports aggregated by Mark Farrah Associates (MFA) in Medicare Business Online™, total Medicare Advantage plan enrollment, as of March 1, 2023, increased 9.8% from March 2022. The top ten companies, each with more than 300,000 members in this segment, collectively provided coverage for nearly 80% of the market. Per the reference table below, most leading MA companies realized year-over-year growth with an overall net gain of 8.2%.
MA Leading Plan Performance
There are 294 insurers covering the MA marketplace in the United States, however nearly 80 percent of MA enrollees selected one of only 10 insurers. As of March 2023, UnitedHealth continues to dominate in this highly competitive segment. With over 9 million enrolled, UnitedHealth commands 28.5% of the MA market. Humana ranks second with nearly 18% market share and over 5.6 million lives. CVS maintains the third position, enrolling approximately 3.37 million, and Elevance Health (formerly Anthem) follows, with over 2 million lives. Together the top three insurers cover 56.9% of the MA market.
The chart below indicates membership gains were considerable for the leaders in this segment. UnitedHealth’s growth continues to raise the bar for MA plan competition. UnitedHealth reported the largest increase in membership, adding over 1 million members year-over-year, for a net gain of 12.7%. Humana experienced the second largest gain with approximately 517,000 new members. CVS and Elevance Health gained over 213,000 and 133,000 new members, respectively.
MA Individual and Group Enrollment
As of March 1, 2023, 83% of membership was from individual MA policies with approximately 26 million enrolled lives. Enrollment in group MA plans continues to grow as these plans allow employers to provide comprehensive medical coverage and quality plan design at lower costs for retirees. Group membership increased by approximately 300,000 members as compared to the same period a year ago. UnitedHealth Group, with its AARP branded products, consistently leads in the individual sector with over 7.1 million members enrolled in individual MA plans. In addition to direct purchase policies, nearly 5.4 million members originated through an employer group health plan or retirement health benefit. UnitedHealth grew their group enrollment by approximately 170,500, driving the company’s total employer-group membership to over 1.8 million. Kaiser Foundation Group and Humana had more than 490,000 members each from group plans, respectively.
MA Enrollment Growth by State
As of March 1, 2023, Medicare Advantage enrollment increased in all fifty states, the District of Columbia and most U.S. territories. Overall, a net membership gain of nearly 2.3 million was seen nationally. Texas, Florida, California, North Carolina, and New York experienced significant enrollment gains with increases of 100,000 members or more. Texas experienced the most sizeable year-over-year increase of approximately 198,000 members.
Stand-alone Prescription Drug Plan (PDP) Enrollment
Stand-alone prescription drug plans (PDPs), also referred to as Medicare Part D stand-alone plans, enrolled approximately 22.5 million members as of March 1, 2023, reflecting a decrease of roughly 911,000 enrollees from March 2022. PDP plans provide prescription drug coverage for 35% of the 65 million people eligible for Medicare. Enrollment in products sold to individuals was 18.3 million in March 2023, a decrease of 545,457, year-over-year. Only 3.9 million Medicare beneficiaries were enrolled in employer group PDPs as of March 1, 2023. It is important to note this assessment is reporting on Stand-alone PDP members only, and Medicare Advantage with prescription drug plan (MA-PD) members are included in the MA portion of this report.
PDP Leading Plan Performance
There are currently 58 organizations competing in Medicare stand-alone prescription drug plans as of March 2023. Five companies have greater than 2 million members and command 89% of the PDP market. As indicated in the chart below, CVS Group covers the largest number of people enrolled in PDPs and saw an enrollment increase of 1.5% between March 2022 and March 2023.
PDP Market Penetration by State
Stand-alone prescription drug plan enrollment continued to experience decreases in 47 states within the U.S. including the District of Columbia as of March 1, 2023. Michigan had the largest year-over-year aggregate decrease with over 219,000 fewer enrollees in this segment. California, with 1.87 million members, saw the most sizeable increase of nearly 8,000 more PDP enrollees than the previous year. Surprisingly, Alaska experienced the second highest enrollment gains, with an increase of 1,490 members.
This brief is based on an analysis of enrollment data for Medicare Advantage and 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.
It is important to note that MA enrollment counts by company or geography for the same reporting period may be slightly different, depending on the CMS enrollment source. CMS county-level reports do not output enrollment for plans with 10 or fewer members per county. There may likely be additional competitive shifts in enrollment and market observations through March.
Many companies conduct their post-OEP competitive assessments by using tools such as Mark Farrah Associates’ (MFA) Medicare Business Online™ and Health Coverage Portal™. Health insurers continue to invest in MA and PDP growth opportunities for increased enrollment, revenue and profits as the number of people entering retirement increases each year. Mark Farrah Associates will continue to monitor plan performance in this highly competitive Medicare segment.
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. Our product portfolio includes Health Coverage Portal™, County Health Coverage™, Medicare Business Online™, Medicare Benefits Analyzer™, 5500 Employer Health PLUS, and Health Plans USA™. For more information about these products, refer to the informational videos and brochures available under the Our Products section of the website (www.markfarrah.com), or call 724-338-4100.
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