Medicare Advantage (MA) will enjoy its best payment rate environment in a decade in 2019 and will support enrollment acceleration in the individual senior market. But I think Group MA is poised to explode next year. Group MA surged last year once the moratorium on the ACA‘s Health Insurance Fee was implemented. Group enrollment lagged behind MA growth trends until then. It appears MA plans passed on the savings to employers and Group enrollment exploded that year. This year, with the tax reinstated, it slowed, but still remained ahead of overall program growth.
We have another tax holiday coming in 2019, and combined with higher payment rates, I think Group MA is going to explode again. Just last week North Carolina decided to move 150,000 retirees to UnitedHealth Group‘s Group MA plans as a result. It’s a harbinger of what’s to come. United and Aetna are the leaders in Group MA with 31.5% and 17% market shares, respectively. States, counties and municipalities are moving huge retiree groups first, followed by private sector employers. Blue Cross/Blue Shield plans in particular are well-positioned to serve Group MA business and challenge the United/Aetna dominance of the space.
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