When is growth not enough to keep payers happy?
Medicare Advantage makes up 54% of overall Medicare enrollment, with 64% penetration estimated by 2033. But will 10% growth over the next nine years be enough for today's market leaders? Plan executives at Aetna, Centene and Humana have either already announced or anticipate MA market exits and/or membership declines for the upcoming enrollment year.
Meanwhile, significant growth continues in select markets and plan categories. In advance of AEP 2025, the Kaiser Family Foundation has published its August update of Medicare Advantage in 2024: Enrollment Update and Key Trends.
MA now enrolls more than half with more growth projected through 2033
We've known for some time that Medicare Advantage enrollment would and has eclipsed original Medicare. But how much growth is left in the tank?
MA as a percentage of total enrollment eclipsed 50% in 2023 when its market share was 51%. This is up from just 19% in 2007. Since then, MA penetration has grown from 1-3% annually and was at its highest, 4%, from 2020 to 2021.
In 2024, MA penetration reached 54, and the Congressional Budget Office projects it to be 64% by 2033. The last Baby Boomers will age into Medicare by 2030. That equates to essentially 1% growth per year, the lowest annual rate since 2014-2016.
This and other factors — lower payments from CMS, slower growth from MA leaders, and market consolidation — led The Wall Street Journal to note last year that the "Medicare Gold Rush" was slowing down. Add to this higher payer costs due to higher post-pandemic member utilization — and increased government scrutiny over MA prior authorization, marketing, and brokers — and the path to 2033 looks shakier indeed.
Despite rumors of its demise, the Medicare gold rush is still very much on in select markets
For the time being, the MA market share is already higher than the national percentage in select states and counties.
While MA's share of the Medicare pie is as low as 2% in some states, it is 60% or more in seven states — AL, CT, MI, HI, ME, FL, RI — and in Puerto Rico. This is compared to just three states in 2023.
The proportion of counties with MA enrollment at 60% or more is even higher — 37% in 2024. While 8% of beneficiaries live in a county where MA enrollment is less than one third, the other end of the spectrum shows MA penetration at 80% or more in counties in Florida (80% in Miami-Dad), New York (82% in Monroe) and Texas (81% in Starr).
As KFF notes, this variation reflects "several factors, such as differences in firm strategy, urbanicity of the county, Medicare payment rates, number of Medicare beneficiaries, health care use patterns, and historical Medicare Advantage market penetration."
Two payers control nearly half of MA enrollment; three control more than 60%
Two names have dominated MA since 2010: UnitedHealthcare and Humana. In those 14 years, United's market share has grown (20% to 29%) while Humana's has stayed relatively consistent (16% to 18%), including since 2017. By the numbers, United's MA enrollment was nearly 9.4 million in March 2024; Humana's was just over 6 million.
CVS Health/Aetna has also been in growth mode since 2010 (from 6% to 12% market share). The payer had the largest growth year over year, more than 758,000 members between March 2023-March 2024.
Every other major MA player has declined:
- BlueCross BlueShield: 15% to 14%
- Kaiser Permanente: 9% to 6%
- Centene: 6% to 3%
Cigna has exited MA altogether. With a market share that was already low and declining — from 3% in 2010 to 2% in 2024 — the commercial payer sold its MA business to Blues-affiliated HCSC in 2024.
All other MA insurers combined account for 16% of the market — just over 5.1 million members and a decline from 24% in 2010
Most MA members have individual plans but that percentage is decreasing
Some 62% of MA enrollment comes from individual plans, but that percentage is steadily declining.
Since 2010, individual plans as a percentage of enrollment have shrunk by 9% — from 71% in 2010, with declines in every year but one.
Meanwhile, enrollment in Special Needs Plans (SNPs) as a percentage of overall MA has grown significantly, from 12% in 2010 to 20% in 2024. SNPs are available to beneficiaries who are dually eligible for Medicare due to age and Medicaid due to lower income (D-SNPs). They are available to individuals with chronic illness (C-SNP) and those who live in institutions such as nursing homes (I-SNP).
Last year, SNPs overtook group plan penetration, whose enrollment has resembled a bell curve over the past 10 years (cresting from 17% to 20% before declining back to 17%). SNP enrollment has more than doubled — from 2.92 million to 6.64 million — since 2019 alone.
D-SNP makes up 88% of SNP enrollment, C-SNP 10%, and I-SNP 2%.
KFF attributes this growth to "the increasing number of SNP plans available on average and more dual eligible individuals having access to these plans" — supply and demand.
The 2025 Annual Enrollment Period
In addition to rapid SNP growth, KFF notes that "Medicare Advantage enrolls a disproportionate share of people of color in Medicare" and that Medicare "pays more to private Medicare Advantage plans for enrollees than their costs would be in traditional Medicare" — 122% or an estimated $83 billion in 2024.
While overall MA growth may be slowing compared to recent years and payer projections, these and other factors will make AEP 2025 worth watching.
Laura Beerman is a contributing writer for HealthLeaders.
KEY TAKEAWAYS
The Annual Enrollment Period for 2026 Medicare Advantage plans is less than two months away.
Just as the doors are already open at Spirit Halloween, it's never too early to start thinking about MA AEP 2026.
Before we know where the market is headed, it's a good time to review where it's been.