“What’s going to happen to Medicare Advantage plans with Obamacare?”
This is a question I hear over and over as I talk to people on Medicare and those who are turning 65.
Predictions about the future of Medicare Advantage seem to change from month-to-month. One month, Medicare Advantage is going to be phased out because of Obamacare payment cuts. The next month, we learn that large insurance companies like Cigna, UnitedHealthcare, and Humana have spent billions of dollars buying Medicare Advantage plans.
And despite all the gloom and doom talk, enrollment in Medicare Advantage (MA) plans has continued to grow each year. From 2012 to 2013, MA enrollment increased by 1.2 million. As of February 2013, 14.6 million people were enrolled in Medicare Advantage plans across the country. That means 28.5% of Medicare beneficiaries are enrolled in MA plans.
Now there is a Bloomberg News story about how UnitedHealthcare and Humana can expect to see their Medicare Advantage business grow significantly over the next 10 years. According to the Bloomberg story:
Medicare Advantage plans for the elderly and disabled will swell to 21 million participants by fiscal 2023 from 14 million this year, the Congressional Budget Office said yesterday in its annual review of the federal budget..
Insurance company stock prices also continue to rise, due to the positive outlook for Medicare Advantage business. From the Bloomberg story:
The Standard & Poor’s 500 Managed Care Index has jumped 19 percent this year, edging out gains of the broader S&P 500, as government policies on Medicare and on implementation of the 2010 health-care system overhaul turn out to be more favorable to insurers than some investors had anticipated.
I have written many times that insurance companies seem to know something the general public does not know: Medicare Advantage is here to stay.