A report published by a leading healthcare research investment company, Nephron, predicts tripling of MA revenue to $1 Trillion
Medicare Advantage trends continue to provide tailwinds for the growth of Medicare Advantage members served through the agilon health platform partnerships. Several industry reports highlight Medicare Advantage (MA) enrollment gains.
The latest Nephron study highlighted a series of positive catalysts in the near term that is driving the accelerated growth in Medicare Advantage membership.
- Permanent Repeal of HIF:
The permanent repeal of a health insurance fee (HIF) beginning in 2021 will eliminate more than $15 billion in taxes that were expected to be levied on insurers, such as Humana, UnitedHealthcare, and Cigna. This allows insurers to invest more in benefits, which enhances attractiveness to Medicare beneficiaries and fuels growth.
- Non-Medical Added Benefits:
Starting in 2020, MA plans were allowed to offer non-medical benefits, and those rules were further expanded for 2021. Examples of such supplemental benefits include transportation for grocery shopping and carpet cleaner for people with asthma. In other words, the plans are receiving more discretion in their spending to help maintain health for their members. The new set of benefits will renew the level of interest, relative to Original Medicare.
- Age-in Penetration Rate:
The rate in which Age-in select an MA plan will increase. CMS estimated that 22.8% of those becoming eligible for Medicare 2016 selected Medicare Advantage and that the most recent data from 2018 puts the age-in MA penetration rate at 24.8%. By the end of 2028, Nephron speculates the age-in MA penetration is projected to reach 50%.
- Changes to Medicare Supplement (MediGap) Products
Beginning in 2020, newly eligible individuals were not allowed to a MediGap Plan C or Plan D, which provides for first dollar coverage. As a result, higher-income individuals who have typically purchased these products will likely turn to MA PPO products as an alternative.
- Short Term Impact of COVID-19
One near-term offset to the above tailwinds is the negative impact of COVID-19 on the face-to-face sales process used by seniors to purchase their Medicare coverage. While alternative online channels are available, industry experts predict that growth could be temporarily tempered due to this disruption in the traditional sales process.
In summary, the study projects a 10-year compound annual growth rate (CAGR) in MA revenue of 13.9%. To learn more about Nephron or the report, visit www.nephronresearch.com.