Understanding Health Insurer Acquisition Impacts
January 13, 2025
On December 31, 2024, Elevance Health, Inc. (NYSE: ELV), the second largest health insurer in the United States, announced that its Anthem Blue Cross and Blue Shield business group closed on the acquisition of Indiana University Health Plans (IU Health Plans), a small, local, provider-owned insurance carrier [1]. To better understand the significance of this transaction, analysts at Mark Farrah Associates (MFA) reviewed data available on the insurers, utilizing multiple products available to its customers, including the new Enrollment Analysis [2] tables available in Medicare Benefits AnalyzerTM and mapping capabilities under the new user interface for County Health CoverageTM.
Enrollment & Financial Data
Elevance Health Group offers coverage through Anthem Blue Cross and Blue Shield and affiliated Blues plans in 14 states, including Indiana (IN). Elevance also offers coverage nationwide through its WellPoint and Carelon business groups. With nearly 3.2 million members in Indiana, Elevance is more than four times larger than its nearest competitor, UnitedHealth Group, based on total health enrollment. The majority of Elevance’s IN enrollment is through self-insured business with an estimated 1.9 million members, followed by Medicaid with more than 717,000 covered lives, as of September 30, 2024. Anthem began offering Medicare Advantage (MA) plans in Indiana in 2014 and, 10 years later, has the third largest enrollment for this segment with 134,006 members, as of December 1, 2024.
In 2016, Indiana University Health Plans (IU Health Plans), a for-profit, provider-owned, health maintenance organization (HMO) domiciled in Indiana, was a substantial insurer in the state with over 508,000 members. At that time, it was a significant participant in the Medicaid and Individual markets; however, due to financial challenges, the company exited both markets by mid-2018. Based on membership gains and financials for the years after 2018, IU Health Plans’ efforts to focus on the Group and Medicare Advantage markets never gained traction. IU Health Plans continue to struggle, based on data from the National Association of Insurance Commissioners (NAIC) filings which can be found in MFA’s Health Coverage PortalTM.
Medicare Advantage Opportunity
Growth in IN’s Medicare Advantage (MA) market is an area of interest for Elevance, and it is IU Health Plans’ largest segment. Utilizing MFA’s new Enrollment Analysis table, found in its Medicare Benefits AnalyzerTM (MBA) product, we see Elevance currently ranks third based on enrollment, with IU Health Plans ranked fifth. Insurers participating in Indiana’s MA/MA with Prescription Drug (MAPD) market currently cover only 41.2% of the 1.382 million eligible for Medicare coverage, suggesting considerable opportunity for growth. Medicare Benefits AnalyzerTM also includes CMS’ Medicare Star Ratings data, which indicates Elevance’s and IU Health Plans’ products have 3.5 stars. The 3.5 star rating is indicative of an "average" performance level for a Medicare Advantage or Part D plan, falling right in the middle of the 5-Star rating scale, and places both insurers behind UnitedHealth and Humana, which have plans with higher star levels. MBA also provides detailed MA/MAPD [3] benefits data for the multiple plans being offered by all carriers in the market, allowing for a deeper dive into the strengths and weaknesses of the merger, than this analysis permits.
County Level Analysis
Utilizing MFA’s County Health CoverageTM new Market Leaders mapping capabilities, analysts noted Elevance was the market leader in counties along the perimeter of the state, while the Market Overview map indicates IU Health Plans’ MA/MAPDP enrollment is clustered within the center, an area where UnitedHealth is the market leader. This acquisition of IU Health Plans should strengthen Elevance’s position in that area. Additionally, the acquisition also solidifies Elevance’s third place ranking in the IN MA/MAPDP marketplace, putting pressure on second place Humana. At first glance, the acquisition does not appear as advantageous for Elevance; however, by drilling down to a more nuanced level, more insight is gained into the strategy behind the decision.
About Mark Farrah Associates (MFA)
Mark Farrah Associates (MFA) is a leading data aggregator and publisher providing health plan market data and analysis tools for the healthcare industry. Our product portfolio includes Health Coverage Portal™, County Health Coverage™, 5500 Employer Health Plus, Medicare Business Online™, Medicare Benefits Analyzer™, and Health Plans USA™. For more information about these products, refer to the informational videos and brochures available under the Our Products section of the website or call 724-338-4100.
Healthcare Business Strategy is a FREE brief that presents analysis of important issues and developments affecting healthcare business today. If you would like to be added to our email distribution list, please submit your email to the "Subscribe to MFA Briefs" section at the bottom of this page.
[1] Source: “Anthem Blue Cross and Blue Shield Parent Company Completes Acquisition of Indiana University Health Plans”, Dec 31,2024, https://www.anthem.com/press/indiana-university-health-plans-acquisition
[2] Enrollment Analysis table shows Parts C and D Enrollment as Percentages of Medicare Eligibles and Percentages of Covered Medicare Advantage (MA) Enrollees. Data is ranked at the Parent, Contract, Plan, Parent by State, and Parent by County levels.
[3] Medicare Advantage, MA, and MA/MAPD are used interchangeably they all equate to the Centers for Medicare & Medicaid Services (CMS) Medicare Advantage Part C program.
Request Information
within 1-2 business days.