Study: Medicare Advantage posts banner year in 2022

Medicare Advantage had a banner year in 2022, with program enrollment growth of 9% to 62.6 million beneficiaries, according to a new study from The Chartis Group.

Medicare Advantage posted a 3% increase in penetration, representing total enrollment growth of 2.3 million beneficiaries for 2022.

“These results reflect the strong value proposition of Medicare Advantage products and the industry’s sustained push to create new value for its consumers,” said “2022 Medicare Advantage Competitive Enrollment Report" by the Chicago-based consulting firm. The report was authored by Chartis Principal Nick Herro and consultant Julianna Wokurka. 

“With this growth, we continue to see a shifting competitive landscape for health plans that administer these products,” the report said. “Some trends persist from our report last year, and others are new twists in the evolving market.”

For 2022, total Medicare enrollment grew by 1 million beneficiaries, up 1.6% over the previous year. The growth was significant but slower than in past years, likely due to COVID-19 deaths among the population age 65 and older.

The Medicare Advantage market added 2.3 million lives at the expense of 1.3 million Original Medicare lives, the study said. Medicare Advantage now makes up 45% of all Medicare enrollment, up from 42% last year and 37% I 2019.

In the 2022 enrollment period, every state saw Medicare Advantage growth at rates ranging from 5% to 59%, according to the study.

Of the 50 states, 11 – Maine, Rhode Island, Connecticut, Ohio, Michigan, Florida, Alabama, Wisconsin, Minnesota, Oregon and Hawaii -- had half or more of their eligible beneficiaries in Medicare Advantage products.

The authors called that measure mostly symbolic, but is an industry benchmark anticipated for years, the authors said.

They predicted the market will see 50% Medicare Advantage penetration by 2025.

In 2022, nonprofit and blue-branded nonprofit health plans lost share to for-profit health plans. Nonprofit and blue-branded plans shrunk to 18.2% and 10.0% of the market, respectively, as for-profit plans represented 71.8% of all beneficiaries.

United, Centene and Aetna captured 85% of all new enrollment nationally, with United gaining about one-third of all new enrollees.

By comparison, nonprofit and blue-branded plans together captured 15% of new enrollment across more than 200 plans in that cohort.

Special Needs Plans, or SNPs, are Medicare Advantage plans targeted at beneficiaries dually eligible for Medicare and Medicaid.

SNP enrollment rose 20% this year, with a total of 4.5 million lives representing more than 16% of all Medicare Advantage lives. 

The study predicted SNP product interest is increasing by national plans. This, coupled with robust Medicaid enrollment and eligibility growth, will propel the products forward and lead Medicare Advantage growth.

Program of All-Inclusive Care for the Elderly, or PACE, a high-value integrated product serving similar populations to SNP, saw steady enrollment growth of 5% in 2022 on 6% CAGR since 2019.

PACE will continue to receive growth in interest but the authors forecasted it will be constrained by comparison due to unique requirements and regulations of the program.