How 2023 Medicare Advantage Enrollment Growth Has Shifted

This article was originally published on 2/22/23. It has been updated to reflect corrected data from Chartis and CMS.

Medicare Advantage enrollment has increased by 2.7 million beneficiaries in 2023 as traditional Medicare enrollment continues to fall, according to data from Chartis.

The analysis reflects Medicare Advantage enrollment, plan, and pricing data from CMS from January 2019 to January 2023.

Between 2019 and 2023, Medicare Advantage enrollment has grown by 2.1 percent. As of January 2023, 48 percent of all Medicare beneficiaries are enrolled in Medicare Advantage, translating to 30.7 million people.

Medicare Advantage enrollment growth continued at a rapid pace, adding 2.7 million beneficiaries in 2023. The program has seen steady growth in the past three years, adding 1.9 million in 2020, 2.2 million in 2021, and 2.3 million in 2022. Meanwhile, traditional Medicare lost 1.3 million beneficiaries in both 2022 and 2023.

Medicare Advantage enrollment varied across nonprofit and for-profit plans.

For-profit insurers account for 72.9 percent of all Medicare Advantage enrollment in 2023, up from 71.8 percent in 2022. Between 2019 and 2023, for-profit plans have seen a 5 percentage point share increase.

For-profit UnitedHealthcare plans accounted for 44 percent of all new enrollment, and Humana accounted for 21 percent. The ten largest for-profit plans accounted for 70.6 percent of Medicare Advantage enrollment, with the top five plans accounting for 67.1 percent.

While nonprofit plan enrollment increased in 2023, they experienced a 4 percentage point share decrease from 2019. Nonprofit Blues plans saw a 0.1 percentage point share increase in 2023, marking their first share gain in years, researchers noted.

Special needs plan (SNP) enrollment grew by almost 1 million beneficiaries in 2023 to 5.4 million, with this market representing 18 percent of all Medicare Advantage enrollment.

The 20 percent growth within SNPs accounted for 34 percent of all enrollment growth. Dual eligible SNP enrollment grew by 21 percent, and chronic condition SNP and institutional SNP enrollment each grew by 11 percent.

Start-up plans in Medicare Advantage experienced a 21.7 percent growth in 2023, making up 1.8 percent of the market.

In 22 states, more than 50 percent of all Medicare beneficiaries are enrolled in Medicare Advantage, up from 11 states in 2022. States with low penetration rates between 20 percent and 30 percent saw the greatest growth, the report noted.

Between 2019 and 2023, the number of Medicare Advantage plan options increased by 11.4 percent. The average beneficiary had access to 44 different plan options in 2023, and there were 4,100 plan options available nationally. Among these plan options, 41 percent were preferred provider organization (PPO) plans and 59 percent were health maintenance organization (HMO) plans.

Despite the many plan options, market competition is low. Most of the ten states with the top enrollment numbers are more concentrated than last year.

Almost 85 percent of counties are considered highly concentrated at the county level. Competition varied depending on county locations; 91 percent of rural counties and 75 percent of urban counties are considered highly concentrated.

The analysis found that quality performance was associated with enrollment. Nearly three-quarters of Medicare Advantage beneficiaries are enrolled in health plans with four or more stars in 2023, down from 89 percent in 2022.

Twenty-two percent of plans received five stars, compared to 9 percent in 2019. However, 27 percent of plans received less than four stars, an increase from 23 percent in 2019.

Plans that saw declining star ratings experienced 6.7 percent enrollment growth. In contrast, plans that had an increase in their start ratings saw 13.8 percent enrollment growth.

The findings shed light on the 2023 Medicare Advantage space and highlight how the market is growing at the expense of traditional Medicare. Additionally, the data emphasizes how enrollment growth may require enhanced beneficiary offerings and targeted efforts as plan options remain high and gains have been tied to quality.