Report Shows the Growth of Medicare Advantage Plans is Decelerating

A recently published report indicates that the rate at which Medicare Advantage plans are growing is slowing down. The report was authored by HealthScape Advisors, a consulting company, together with Chartis, a healthcare advisory company.

The report says the Medicare Advantage (MA) market is experiencing a correction following the explosive growth the segment experienced over the past four years. Data shows that people enrolled in MA plans increased by 3.9% (1.3 million enrollees) last year. This is in contrast to the 7% rate of growth registered in 2023, which was also a reduction from the growth rate of 9.4% recorded in 2022.

This falling growth rate notwithstanding, the report maintains that the MA market remains strong. From the surveys conducted involving leaders of different health plans, the feeling of optimism is higher than when a similar survey was conducted last year. These leaders revealed during the survey that there are favorable economic factors and growth is ongoing, unlike what is happening in other segments within the healthcare market.

The people surveyed also expressed optimism based on the fact that the new administration in Washington, D.C. had voiced their support for MA programs. 91% of the survey participants anticipate similar or improved MA performance come 2026, in contrast to just 74% who held this view the year before.

These sentiments are notable given that in 2024, the number of people enrolled on MA plans surpassed those in the traditional Medicare plan. To be exact, 51% of those enrolled on Medicare have MA plans while 49% are under the traditional Medicare system. In 2023, these two versions were equal at 50% for each.

5 years prior, 40% had MA plans while the bulk of Medicare enrollees were in the traditional setup.

It should be noted that MA plans currently face a number of headwinds. These include cost pressures, reducing payment rates, star ratings that aren’t favorable, and higher regulatory burdens.

The report points out that a number of MA insurance providers have been forced to exit the market due to some of those headwinds. Premera is one prominent example that the report identifies among providers that have closed shop. A number of health plans have also indicated that they plan to reduce how many people they enroll on MA plans as a result of these pressures, the report adds.

It remains to be seen how MA providers like Astiva Health will navigate the current market challenges and not only remain in operation but also thrive.

NOTE TO INVESTORS: The latest news and updates relating to Astiva Health are available in the company’s newsroom at https://ibn.fm/Astiva

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