The Medicare Advantage and Medicaid markets experienced notable membership increases between 2020 and 2021 according to Mark Farrah Associates (MFA), which recently released a year-end 2021 health insurance segment enrollment update.
MFA compared membership between 4th quarter 2020 with 4th quarter 2021 to provide greater insight into enrollment trends for the Individual, Group, ASO, Medicare Advantage, and Medicaid insurance segments.
Enrollment in Medicare Advantage (MA) continues to grow at a steady rate as more and more American seniors are entering retirement. However, only 42% of the nearly 63.7 million people eligible for Medicare are enrolled in a MA plan, providing ample opportunity for health insurers with Managed Medicare business. Fourth quarter 2021 Medicare Advantage membership stood at approximately 26.8 million; a year-over-year increase of 1.5 million members, representing 6% growth, from December 31, 2020.
As of December 31, 2021, the report found approximately 305 million people received medical coverage from U.S. health insurers. This number is up from 297.5 million, or approximately 7.6 million additional members, from a year ago. Between 4Q20 and 4Q21, membership growth was significant for the individual market as this segment gained approximately 1.9 million more members, year-over-year.
The report is based on data filed in statutory financial reports from the NAIC (National Association of Insurance Commissioners), the CA DMHC (California Department of Managed Health Care), CMS (Centers for Medicare and Medicaid Services) and various state agencies.
The Employer-group risk and Employer-group ASO (administrative services only for self-funded plans) segments provide the largest sources of coverage in the industry, however, these segments, combined, continued to demonstrate year-over-year membership declines.
- The Individual segment experienced a substantial enrollment increase between December 31, 2020, and December 31, 2021. Total year-over-year membership for this segment grew 13% from 14.6 million enrollees to over 16.5 million. This is an increase of 1.9 million members. The increase is most likely caused by an influx of members who lost employer sponsored health coverage due to the economic downturn caused by COVID-19, as well as the extended Open Enrollment Period.
- Approximately 84.7 million beneficiaries received healthcare through Managed Care Organizations (MCOs) and Fee-for-Service type Medicaid programs as of December 31, 2021. This is a 6.8% increase from December 2020, based on membership filed in statutory financial reports from the NAIC and the CA DMHC, as well as state reported Medicaid and CMS reported Medicaid enrollment reports. Note: a portion of CHIP (Children’s Health Insurance Program) enrollment is reported in the Individual segment within statutory reporting.
- Employer-groups continue to be the leading source of health coverage in the U.S, however, year-end figures indicated Employer-group risk membership, including Federal Employees Health Benefit Plans (FEHBP) members, experienced another decrease between 4Q20 and 4Q21. Membership for the Employer-group risk segment was 53.6 million as of December 31, 2021; a -2.4% year-over-year decline.
- Employer-group, self-funded contracts continue to remain popular amongst employers as they can be more cost effective than risk-based plans. Self-funding is specifically common among larger companies as they can disperse the risk of exorbitant claims over many workers and their dependents. According to MFA’s recent estimates, Employer-group ASO (administrative services only for self-funded business) membership was approximately 123.5 million. This was an increase of only 137,000 members from December of 2020. Membership for this segment encompassed 40.5% of total health enrollment for 4Q21, as self-funded ASO plans continue to be a viable option for businesses.