Aetna scored big Medicare Advantage gains in Southeastern Pa. for 2024

The nation’s biggest Medicare Advantage companies — Aetna, Humana, and UnitedHealthcare ― had strong gains in Southeastern Pennsylvania during last year’s open enrollment period for the private version of the federal health insurance coverage available to people 65 and older.

Aetna, a division of CVS Health Corp., had the biggest net gain in Medicare Advantage customers locally, adding more than 13,000 people, which amounts to 19% growth. Humana Inc. had the biggest percentage increase among the nation’s largest players, at nearly 23%. United Healthcare was up 10%.

Cigna Group, which had an 18% drop, announced Wednesday that it is selling its Medicare Advantage operations and related businesses to Health Care Service Corp. for $3.3 billion.

Despite these steady market share gains from the big national firms, Independence Blue Cross remains the Philadelphia-area market leader with 123,658 Medicare Advantage customers in Bucks, Chester, Delaware, Montgomery, and Philadelphia Counties. It logged a 2.7% gain, according to an Inquirer analysis of federal data that includes sign-ups through the first week of December.

Publicly traded companies such as CVS Health, Humana Inc., and UnitedHealth Group Inc. see the private version of Medicare as an important growth engine given the aging U.S. population. Selling Medicare Advantage plans is also more profitable than other forms of health insurance, according to a recent Moody’s Investors Service report.

Medicare Advantage combines two parts of traditional Medicare — one that covers hospitals and one that covers doctors and other outpatient services — into one plan. Private companies administer Medicare Advantage, in contrast to the government’s direct management of original Medicare. Medicare Advantage plans often include benefits such as dental and eye care and prescription drugs that are not covered by traditional Medicare.

» READ MORE: What to know about Medicare for 2024

The private program covers more than half the people eligible for Medicare, but Medicare Advantage “seems to be losing some of its luster,” Moody’s said in a report published last week.

Among companies Moody’s covers, Medicare Advantage profits in 2022 were 45% higher than for commercial or employer-sponsored plans, but they were down 2% compared to 2019.

What’s more, Medicare Advantage companies experienced unexpectedly large increases in their customers’ use of health-care services last year, a drain on profits. Humana’s stock plunged 12% last Thursday when the company, based in Louisville, Ky., reported a $591 million loss in the fourth quarter, which it blamed on higher health-care usage by its members.

More pressure is expected this year — the first time in a decade that the federal government cut the rates it pays insurers for Medicare Advantage enrollees, Moody’s said. The cuts follow pressure by advocates for seniors and some members of Congress on regulators at the Centers for Medicare and Medicaid Services to rein in the profits of the private Medicare insurance giants.

Independence is interested in steady growth, said Kortney Cruz, an Independence senior vice president for government markets. “We’re not in it for big land grabs. We want to be sure we are serving our seniors well and holistically,” she said. The company added 3,199 customers in Southeastern Pennsylvania for 2024.

After a six-year hiatus, Independence, under the AmeriHealth brand, resumed selling Medicare Advantage plans in South Jersey during the 2022 open enrollment period. For 2024, AmeriHealth signed up 1,624 customers in Burlington, Camden, and Gloucester Counties, up from the 189 it had in January 2023. That increase exceeded expectations, Cruz said.

Aetna is the largest Medicare Advantage provider in those three counties, with 46,700 customers this month.

Jefferson Health Plans, a subsidiary of Thomas Jefferson University, has made little headway in South Jersey, where Jefferson owns three hospitals. The insurer, formerly called Health Partners Plans, has 161 customers in South Jersey, up from 16 last January.

One of the goals behind Jefferson’s plan to acquire Lehigh Valley Health Network is the expansion of its health insurance arm. The experience so far in South Jersey shows how hard that is to accomplish.