Year-End Health Insurance Enrollment Trends and Market Segment Performance

April 29, 2020

As our country faces unprecedented times, health plans will most likely experience some form of disruption in many sectors of health insurance.  Increasing efforts to improve health care delivery remain a primary goal of health insurers.   In addition, health companies continue to make important decisions about investments in products and markets in order to withstand the impact of social and economic changes. Market analysts throughout the industry rely on enrollment data and segment performance metrics to gain better insights into health plan market share and competitive positioning. Mark Farrah Associates (MFA) assessed the latest year-over-year enrollment trends, comparing fourth quarter 2018 with fourth quarter 2019 segment membership based on data filed in statutory financial reports.  Approximately 267.8 million people received medical coverage from U.S. health insurers as of December 31, 2019. This number is up from 265.7 million, or approximately 2.15 million additional members, from a year ago.

Segment Performance

Based on data filed in statutory financial reports from the NAIC (National Association of Insurance Commissioners) and the CA DMHC (California Department of Managed Health Care), the Employer-group ASO (administrative services only for self-funded plans) and Employer-group risk segments together continue to be the largest source of coverage in the industry.  However, membership growth was most significant in Medicare Advantage as this segment gained approximately 1.8 million more members, year-over-year. In contrast, the Individual, Non-group health insurance market and Managed Medicaid continued to suffer enrollment declines between 4Q18 and 4Q19.

• Individual business continued to experience enrollment declines between December 31, 2018 and December 31, 2019. Total year-over-year membership for this segment decreased by 3.8% from nearly 14.5 million enrollees to approximately 13.9 million. This is a decrease of over 550,000 people from the overall individual market.

• According to the Centers for Medicare & Medicaid Services (CMS), 71 million individuals in total were enrolled in Medicaid and the Children’s Health Insurance Program (CHIP) as of December 2019; down almost 810,000 since December 2018.  Based on data filed in statutory financial reports, approximately 48.9 million Medicaid beneficiaries received healthcare through Managed Care Organizations (MCOs) in fourth quarter 2019. This is a decrease of 0.6%, or 285,000 enrollees from 4Q18 to 4Q19. It is important to note that some plans submit special performance reports to the state and are not required to file NAIC or CA DMHC statutory financial statements.

• Enrollment in Medicare Advantage (MA) continues to grow at a steady rate as more and more Americans of the Baby Boom generation are entering retirement. Yet, only 36% of the 68.6 million people eligible for Medicare are enrolled in MA plans, thus providing ample opportunity for health insurers with MA business. Fourth quarter Medicare Advantage membership stood at 23.3 million, a year-over-year increase of over 1.8 million members representing 8.4% growth.
   

• Year-end figures indicated Employer-group risk membership, including Federal Employees Health Benefit Plans (FEHBP), experienced a slight increase between 4Q18 and 4Q19. Membership for the Employer-group risk segment was 58.2 million as of December 31, 2019, a year-over-year increase of just 3,203 people as more employers continue to shift towards self-funded (ASO) insurance. Employer-groups continue to be the leading source of health coverage in the U.S.

• Employer-group, self-funded contracts have been gaining in popularity amongst employers as they can be more cost effective than risk-based plans. According to MFA’s recent estimates, Employer-group ASO (administrative services only for self-funded business) membership was approximately 123 million, a 1.2 million member increase from last year.  This encompassed 46% of total health enrollment by segment for 4Q19, as self-funded ASO plans continue to be a viable option for businesses.
   

The U.S. health insurance landscape continues to resonate with unpredictability. As health insurers are keeping a keen eye on the market as the country faces uncertainty, Mark Farrah Associates will monitor enrollment changes and competitive shifts across all healthcare segments.

About the Data

The data used in this analysis brief was obtained from Mark Farrah Associates' Health Coverage Portal™ database. It is important to note that MFA estimated fourth quarter 2019 enrollment for a small number of health plans that are required to report quarterly enrollment but hadn’t yet filed.  Employer group ASO figures may be estimated by Mark Farrah Associates using credible company and industry resources.  Individual, Non-group membership reported by some carriers may include CHIP (Children’s Health Insurance Program).  These adjustments may have resulted in moderate understatement or overstatement of enrollment changes by segment. Findings reflect enrollment reported by carriers with business in the U.S. and U.S. territories.  Data sources include NAIC (National Association of Insurance Commissioners) and the CA DMHC (California Department of Managed Health Care).  As always, MFA will continue to report on important plan performance and competitive shifts across all segments.

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™, 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.

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