Dive Brief:
Enrollment in privatized Medicare coverage continued to grow at the outset of 2025, despite insurers cutting back benefits to improve the profitability of their plans.
Still, year-over-year growth in the Medicare Advantage program appears to be slowing following open enrollment in the fall, according to a Healthcare Dive analysis of data released by the CMS on Tuesday.
UnitedHealthcare, which operates the largest MA payer in the country, further solidified its grip on the market, growing its membership from 9.5 million to 9.9 million people. Humana, the second-largest MA payer, lost the most lives during open enrollment, falling from 6.2 million to 5.8 million enrollees.
Dive Insight:
The data provides the first peek at MA enrollment changes entering 2025 but isn’t the final picture, as MA enrollees can still switch between plans until the end of March.
Still, the release was highly anticipated after major MA insurers promised to shed members to resuscitate flagging margins last year.
Worse benefits and fewer plans available is one explanation for MA’s slow growth rate coming into 2025. Enrollment in the privatized Medicare plans increased 3.8% compared to 2024, a growth rate which, if it holds throughout the year, would be the lowest for MA since 2007, according to health policy firm KFF.
It would also continue the trend of decelerating expansion, as MA enrollment growth has slowed over the last five years. Market watchers say that MA penetration, which surpassed half of all Medicare enrollment last year, could be reaching critical mass.
The Biden administration was also a factor in MA’s slowing growth. Prior to 2021, MA was growing at a rapid clip, thanks to a booming senior population, generous taxpayer funding and heavy insurer investments in marketing and benefits.
That growth translated to massive profits for insurers, which receive a per-member, per-month fee for covering their beneficiaries’ health needs, but also contributed to MA costing taxpayers significantly more than traditional Medicare insurance.
The Biden administration enacted a spate of rules to crack down on overpayments, including curbing reimbursement rates and making it more difficult for insurers to exaggerate the cost of covering their members’ care. Then, in 2023, seniors began using more healthcare than insurers had planned for, causing insurers’ costs to rise.
In 2024, operating profits for insurance divisions of the four largest publicly traded MA insurers — UnitedHealthcare, Humana, CVS and Elevance — fell significantly as a result of higher spending.
UnitedHealthcare, a division of healthcare behemoth UnitedHealth, saw its operating income fall 5% year over year, while Elevance’s was down 10%. Humana’s plummeted 51%.
Meanwhile, CVS’ insurance business Aetna actually lost $984 million in 2024, compared to a profit of $3.9 billion in 2023.
Facing investor alarm, insurers promised to cut coverage in unprofitable markets and reduce benefits to improve the margins of remaining plans, in a notable strategic turnaround from the growth-at-all-costs mentality that characterized the MA market in the past.
Tuesday’s data from the CMS gives industry its clearest picture yet as to the impact of those reductions.
UnitedHealth, Elevance and Cigna grew MA enrollment, while Humana, CVS, Centene and Molina discarded members
MA enrollment for large-cap insurers, Dec 2024 versus Feb 2025
Membership losses for Humana, CVS and Centene are in line with targets laid out by executives for the insurers, down 6.5%, 5.8% and 6.2%, respectively.
Humana and CVS in particular were slammed by rising costs in MA last year, and adjusted their plans accordingly: Humana lost about 400,000 members over open enrollment, and expects that number to rise to 550,000 over the course of this year.
Meanwhile, CVS, which lost 250,000 members, expects to lose “a high single digit percentage” in 2025 compared to 2024, CFO Tom Cowhey said in an earnings call earlier this month.
As for growers, Elevance’s membership increased more than most other major MA insurers, at 11.8%. However, the insurer plans to shed some of those members this year, and expects MA enrollment growth over 2025 to be closer to 8%.
UnitedHealthcare — already the largest MA insurer — increased its MA membership by 4%, or roughly 385,000 lives, versus the end of December.
That’s in line with the payer’s guidance: UnitedHealth executives have said the insurer plans to add up to 800,000 MA lives in 2025, with half of that coming from the enrollment period in the fall.
During fourth-quarter earnings calls, executives for Elevance and UnitedHealth tried to reassure investors that the members they’re adding are profitable, after some analysts raised concerns that more seniors than expected may have elected to join low-margin plans in the fall.
UnitedHealth feels “very good” about its membership, CEO Andrew Witty said, while Elevance feels “really good,” according to CEO Gail Boudreaux. Both insurers said they saw outsized growth in HMO products, which give them more visibility into spending on members’ care.
Overall, Cigna’s growth rate of 18.6% topped the pack. However, the payer is selling its MA business to Chicago-based insurer HCSC, and expects that deal to close in the first quarter of this year.
The CMS released an initial version of the enrollment report on Jan. 15 before pulling the data, citing an unspecified issue.
The agency said it would re-release the files during the week of Jan. 20 but failed to amid a broader Trump administration pause on messaging from public health agencies.
