Health insurers are already making moves to expand their Medicare Advantage markets for 2023 despite … [+] uncertain financial markets and scrutiny of some business practices. This photo shows a page from the 2019 U.S. Medicare Handbook, taken Thursday, Nov. 8, 2018, in Washington. (AP Photo/Pablo Martinez Monsivais)
Health insurers are already scrambling to expand their Medicare Advantage markets for 2023 despite uncertain financial markets and scrutiny of some business practices.
Those efforts to expand their privatized Medicare plans into new states and districts come despite turbulent financial markets that could slow funding for some companies and federal investigations into how those companies calculate risk adjustments and bill sicker patients.
In the coming weeks, incumbent health insurers including UnitedHealthcare UnitedHealth Group, Aetna CVS Health, Cigna and Elevance Health, formerly Anthem, are expected to report strong performance in their Medicare Advantage operations in the second quarter. Meanwhile, startups and smaller regional health plans are using funding from their financial backers and investors to begin expanding into new markets for the next year, despite a competitive environment and volatile financial markets.
For example, Alignment Healthcare, which announced last week that it will enter the fast-growing markets of Florida and Texas. The startup’s plan, which was publicly traded last year, says it sees the market for “an additional 1.1 million Medicare-eligible seniors in Texas and Florida alone, for a total of 8.2 million Medicare-eligible seniors in 52 counties in six countries in 2023.”
Across the country, health insurers have stepped up expansion into new areas, driving Medicare Advantage enrollment to record highs. Medicare Advantage plans added more than 2 million beneficiaries for the 2022 coverage year, growing the program to 45% of all Medicare enrollments, according to a study by The Chartis Group earlier this year.
Medicare Advantage plans contract with the federal government to provide seniors with additional benefits and services, such as disease management and nurse help lines, and some also offer vision, dental and wellness programs. And in recent years, the Centers for Medicare & Medicaid services have allowed Medicare Advantage plans to cover more additional benefits, increasing their popularity among seniors.
While federal regulators and Congress have begun evaluating some Medicare Advantage business practices, the privatized senior benefit program retains support from the Biden administration and bipartisan members of Congress.
As one example, the Centers for Medicare & In April, Medicaid Services announced an 8.5% revenue increase for Medicare Advantage plan payments for 2023. Meanwhile, the growth rate was set at 4.88%, which was higher than the proposed rate increase announced earlier this year.
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