Medicare Advantage, consolidation drove healthcare insurer trends in 2021

Picture: FG Trade/Getty Photos

It was difficult to forecast development strains for the payer and health and fitness insurance policies sector in 2021, largely simply because of persistent uncertainties thanks to the COVID-19 pandemic. Customer actions has turn out to be more unpredictable, care types and choices are switching and payers are adapting to a globe which is evolving quickly and in unexpected methods.

One particular issue that has been rendered really unpredictable by the virus is the economic health and fitness of the nation’s key insurers, which soared through the preliminary waves of the pandemic in 2020 but then settled back down to earth toward the end of that 12 months. In 2021, insurers continue to posted mostly substantial revenue, but they had been considerably from the heights witnessed the preceding 12 months.

About the system of the 12 months a several normal themes begun to arise. Insurers are plowing ahead with digital transformation initiatives, including the growth of telehealth and digital health and fitness. Artificial intelligence and machine understanding have worked their way into the blend and fifty percent of payers now have innovation labs in the perception that digital innovation will be the vital to the upcoming.

Insurers also continued to consolidate in 2021, resulting in highly concentrated markets that have drawn the focus of the federal governing administration, which seeks to suppress consolidation in a bid to empower consumers.

And then you can find Medicare Gain, which continues to improve it’s estimated MA designs will protect more folks in 2022 than primary Medicare. Several key insurers have taken detect, expanding their MA choices in an work to seize more of the current market.

It truly is been a wildly distinct 12 months in the payer room, but the way it has performed out suggests lots of of these development strains could proceed into 2022 … and outside of.


COVID-19 continues to affect each individual facet of American existence and the healthcare sector, and it’s driving developments in the payer globe as very well. At the HIMSS State of Health care function in June, Shreesh Tiwari, principal at ZS, reported the coronavirus has led to an maximize in payer adoption of technologies and innovation.

Sixty-four % of health and fitness insurance policies executives report an accelerated adoption of digital health and fitness initiatives these kinds of as digital health and fitness. One more 53% report an acceleration in adoption of synthetic intelligence and machine understanding tactics, though 42% reported COVID-19 has served aid the adoption of benefit-based care arrangements, according to State of Health care exploration by HIMSS, the mother or father enterprise of Health care Finance Information.

COVID-19 has served to travel adjustments not just in technologies, but in perspective, Tiwari reported. The mental and cultural boundaries in phrases of adoption are no for a longer period getting witnessed as concerns.

About fifty percent of payers have an innovation lab and believe AI and machine understanding will travel innovation ahead. But 53% believe healthcare startups will direct the way in driving large technologies innovation, Tiwari reported.

The governing administration also plays a vital part. Forty-six % of payers believe latest procedures and rules will aid innovation.

“Payers have tasted the fruits of innovation in the earlier several months,” Tiwari reported at the time. “Interoperability is getting witnessed as a vital driver in phrases of managing concerns coming out of the technologies infrastructure, info infrastructure concerns we have, closely followed by info privateness and info security.”

Not all of insurers’ digital initiatives are likely flawlessly, nevertheless. Health and fitness designs are revamping their digital choices in a bid to remember to consumers, but these initiatives are challenging, a Deloitte study observed in June. Several designs are battling to properly prioritize assignments, suggesting a absence of distinct vision.

In simple fact, about fifty percent of the 35 technologies leaders surveyed identified this absence of vision as an impediment to these ongoing digital transformation initiatives. 

Buyers are the ones largely affected, as client-struggling with platforms have designed the the very least development. A little over fifty percent of respondents, 57%, reported they are continue to in the course of action of advancing these programs, though the remainder have not nevertheless begun but say they’re going to do so in just the following two years.

There are other parts that are lagging as very well. The study concentrated on modernization initiatives of 5 technologies platforms – administrative, analytics, scientific, core, buyer service and engagement – and only two respondents reported they had modernized one particular of people platforms.

People surveyed identified cyber and information security as the variety two financial investment precedence right after business intelligence. But they warned it could be highly-priced to suitable cyber-related issues, particularly ones having to do with cloud configuration. Baking in cybersecurity in DevOps from the outset could make for a more successful and resilient course of action.

The results discuss to the broader trouble of client engagement, which has been an ongoing concern for health and fitness designs and insurers. A J.D. Energy 2020 U.S. Business Member Health and fitness System review observed that 60% of privately insured U.S. health and fitness system associates reported they had not been contacted by their health and fitness system with assistance or information related to COVID-19, and almost fifty percent (48%) reported their health and fitness system has not shown worry for their health and fitness since the pandemic started.

Health and fitness designs have not attained buyer centricity, as just 36% of industrial health and fitness system associates reported their health and fitness system acts in their best interest “constantly” or “most of the time,” and just 25% reported they look at their health and fitness system as a trusted lover in their health and fitness and wellness.

This absence of buyer-centric positioning resulted in an all round fulfillment score past 12 months for industrial health and fitness designs of 719 on a 1,000-position scale, between the lowest of all industries evaluated, according to J.D. Energy.


Medicare Gain enrollment continued to maximize and a number of key insurers expanded their MA footprints. It truly is turn out to be a scorching current market for insurers heading into the new 12 months.

The Centers for Medicare and Medicaid Companies reported that in 2022, MA is projected to access 29.5 million folks as opposed to 26.nine million enrolled in a Medicare Gain system in 2021. 

For lots of seniors, MA is the desired health and fitness insurance policies simply because of its lower upfront month to month costs and extra gains. Medicare Gain designs will proceed to present a huge variety of supplemental gains in 2022, including eyewear, hearing aids, equally preventive and complete dental gains, access to foods (for a constrained period), over-the-counter things, fitness gains and around the world emergency/urgent protection. 

In addition, the percentage of designs supplying distinctive supplemental gains for chronically unwell folks will maximize from 19% to 25%.

An rising variety of Medicare Gain dual qualified distinctive needs designs protect equally Medicare and Medicaid companies for folks who are dually qualified. In 2022, 295 designs (as opposed to 256 in 2021), will protect all Medicare companies, plus Medicaid-lined behavioral health and fitness procedure or very long-term companies.

CMS will proceed to check the Section D Senior Savings Product for insulin for seniors in more than two,a hundred designs in 2022. This 12 months, over 500 new Medicare Gain and Section D prescription drug designs, as very well as two new pharmaceutical manufacturers of insulin, are joining the design that lowers out-of-pocket investing.

In addition, more than 1,000 Medicare Gain designs will participate in the CMS Innovation Center’s Medicare Gain Value-Centered Insurance policy Structure Product in 2022, which tests the effect of supplying a projected million folks customized gains created to greater regulate their illnesses and deal with social needs from food stuff insecurity to social isolation. 

The VBID Model’s Hospice Gain Ingredient, now in its next 12 months, will also be offered by 115 Medicare Gain designs in portions of 22 states and U.S. territories. It offers enrollees improved access to palliative and built-in hospice care. 

To support with their Medicare costs, lower-cash flow seniors and grownups with disabilities could qualify to obtain economic aid from the Medicare Savings Programs. Only about fifty percent of qualified folks are enrolled, CMS reported.

Cigna is getting on on the act by expanding its MA designs, growing into 108 new counties and a few new states – Connecticut, Oregon and Washington – which will maximize its geographic presence by almost thirty%, the insurer reported in October.

As part of the growth, Cigna reported most latest prospects will shell out the same or reduced premiums, and promised that each individual current market will have at the very least one particular $ top quality system. Other gains will include a social link method to beat loneliness, customized designs for folks with diabetic issues and incentives for annual wellness tests and other preventive care.

Cigna has improved its geographic presence in MA by eighty% since 2019, the insurer reported. The enterprise now presents designs in 477 counties across 26 states and the District of Columbia.

Centene, in the meantime, reported this 12 months it will be broadening its access in the Medicare Gain room in 2022, expanding into 327 new counties and a few new states: Massachusetts, Nebraska and Oklahoma.

In all, this signifies a 26% growth of Centene’s MA footprint, with the supplying available to a possible 48 million beneficiaries across 36 states. At this time, Centene serves more than 1.1 million MA associates across 33 states.

In September, Centene also declared it would consolidate its latest Medicare brands, including Allwell, Health and fitness Net, Fidelis Care, Trillium Gain, ‘Ohana Health and fitness System and TexanPlus, underneath one particular unified manufacturer dubbed Wellcare.

Meanwhile, UnitedHealthcare, which previously has considerable current market management with its Medicare Gain designs, will fortify its foothold in the room by expanding its MA designs in 2022, including a possible three.1 million associates and achieving ninety four% of Medicare-qualified consumers in the U.S.

At this time, more than seven.three million folks are previously enrolled in UnitedHealthcare’s Medicare Gain designs. The insurer reported the growth will focus on lowering prescription drug costs, and improving upon gains and the member practical experience.

But though UnitedHealthcare has a significant foothold in the Medicare Gain room, it underwent scrutiny from the federal governing administration earlier this month, when the Centers for Medicare and Medicaid Companies blocked four Medicare Gain designs from enrolling new associates in 2022 simply because they did not spend the bare minimum threshold on health care gains. Three UnitedHealthcare designs and one particular Anthem system failed to strike the expected eighty five% mark a few years in a row.

Medicare Gain designs are expected to spend a bare minimum of eighty five% of top quality bucks on health care charges failure to do so for a few consecutive years triggers the sanctions.

For UHC, the penalties use to its MA designs in Arkansas, New Mexico and the Midwest, which encompasses Missouri, Kansas, Nebraska and Iowa. UHC designs protect about 83,000 associates, and the Anthem system addresses about 1,200 associates. They cannot present pick out designs to associates till 2023, assuming they strike the eighty five% threshold following 12 months – what’s named the health care reduction ratio (MLR). If they fail to strike the threshold for 5 years in a row, the governing administration will terminate the contracts.

UHC representatives told Bloomberg that it skipped the eighty five% benchmark in particular markets in part simply because of sufferers deferring health care care thanks to the COVID-19 pandemic.

Humana also declared it would debut a new Medicare Gain PPO system in 37 rural counties in North Carolina in reaction to current market desire in the eastern part of the state. 


Health and fitness insurer consolidation has been one more ongoing development – and one particular the latest administration would like to see with tighter reigns.

An executive buy issued by President Joe Biden in July cracked down on medical center and health and fitness insurance policies consolidations and other actions it reported decreases levels of competition and drives up rates. The four parts of healthcare qualified are: prescription medicines, medical center consolidation, health and fitness insurance policies consolidations and hearing aids.

Consolidation in the health and fitness insurance policies sector has meant that lots of consumers have little preference when it will come to picking insurers, the buy reported. 

Biden directed the Division of Health and fitness and Human Companies to standardize system alternatives in the health and fitness insurance policies market so folks can comparison store more quickly. Plans offered on the exchanges are challenging by the several companies offered and discrepancies in deductibles, the buy reported.

Rick Pollack, president and CEO of the American Healthcare facility Association, urged federal businesses at the time to focus on procedures that deal with levels of competition between industrial health and fitness insurers.

“In simple fact, with industrial health and fitness insurance policies designs, almost a few out of four markets had been highly concentrated in 2019 and the top 5 major insurers alone management almost fifty% of the current market. Scientific tests have observed that when an insurance policies current market is highly concentrated, insurers cut down provider payments and do not move price savings alongside to the client.”

The outcomes of consolidation in 2021 also prolonged to prescription medicines. Consolidation between standalone Medicare Section D prescription drug designs was the root result in of a 23% decline in choices for 2022, according to results printed past month by the Kaiser Family Basis.

The average Medicare beneficiary will have a preference of 23 stand-alone prescription drug designs (PDPs) in 2022, seven much less PDP alternatives than in 2021, the info showed. Although the variety of PDP alternatives in 2022 is considerably reduced than the peak in 2007 – when there had been 56 these kinds of alternatives, on average – there are continue to a lot of standalone drug system alternatives, according to KFF.

The somewhat big decrease in the variety of PDPs for 2022 is mainly the consequence of consolidations of system choices sponsored by Cigna and Centene, resulting in the current market exit of a few countrywide PDPs from every agency in every area: all a few of Cigna’s Convey Scripts PDPs and a few of Centene’s six Wellcare PDPs. Section D sponsors are constrained to supplying no more than a few PDPs in every area. 

This accounts for just over 200 PDPs offered in 2021 that will no for a longer period be offered in 2022. Enrollees in these consolidated designs will be instantly switched to other designs offered by the same system sponsor, although they can pick to switch into a distinct system through the annual open up enrollment interval.

The variety of firms sponsoring stand-alone drug designs has declined steadily over time, from more than forty firms in 2010 and earlier years, dropping under 25 firms starting in 2015, and at sixteen firms in 2022. That is reduced than in any other 12 months since Section D begun. 

PDP enrollment is predicted to be concentrated in a smaller variety of firms in 2022, as it has been each individual 12 months. Centered on August 2021 enrollment, eight out of ten enrollees in 2022 are projected to be in PDPs operated by just four firms: CVS Health and fitness, Centene, UnitedHealth and Humana. All four firms present PDPs in all 34 regions following 12 months.

Inspite of these 12 months-to-12 months adjustments in system protection and costs, as very well as adjustments in beneficiaries’ health and fitness needs, a preceding KFF evaluation observed that most Medicare beneficiaries did not look at designs through a recent open up enrollment interval, and most Section D enrollees did not look at the protection offered by their drug system to other drug designs.

The figures are equivalent across equally Medicare Gain and conventional Medicare, with 68% of MA beneficiaries saying they do not look at health care designs, and seventy three% of people in conventional Medicare proclaiming the same.

Twitter: @JELagasse
Electronic mail the author: [email protected]