Dive Brief:
Medicare Advantage markets are highly concentrated, leaving many beneficiaries with few choices for insurers even as enrollment in the privatized Medicare program climbs, according to an analysis published Monday by the KFF.
Last year, 9 in 10 Medicare enrollees lived in a county where at least half of MA beneficiaries were covered by plans sponsored by just one or two insurers, the health policy researcher found.
Major MA insurers UnitedHealthcare or Humana had the largest market share in two-thirds of counties, making up nearly 60% of total MA enrollment in 2024.
Dive Insight:
More seniors are choosing MA plans, where the federal government pays private insurers a set amount to manage healthcare for Medicare beneficiaries.
MA enrollees have access to 34 plans with prescription drug coverage on average this year, double the number on offer in 2018, according to the KFF. However, the number of insurers sponsoring these plans only slightly increased during this time, suggesting these payers aren’t operating in a competitive market.
Last year, nearly 80% of counties were considered highly concentrated MA markets, while another 18% were very highly concentrated. Only 30 counties, or less than 1% of the total, were moderately concentrated, according to the KFF analysis. None were unconcentrated.
Beneficiaries in rural areas have fewer MA insurer options. Nearly 40% of the most rural counties were highly concentrated, compared with just 15% of rural areas near urban counties and 6% of urban counties.
The large market share controlled by UnitedHealthcare and Humana was particularly pronounced in the least competitive markets. UnitedHealthcare was the biggest MA insurer in half of very highly concentrated counties and 41% of highly concentrated counties last year.
Meanwhile, Humana was the largest MA insurer in 22% of very highly concentrated counties and 26% of highly concentrated areas, the KFF found.
MA has come under increased scrutiny from lawmakers and regulators for driving up costs in the Medicare program.
MedPAC, which advises Congress on Medicare policy, estimates the federal government will spend $84 billion more on MA enrollees this year than it would if those beneficiaries were enrolled in traditional fee-for-service Medicare, in part due to upcoding, where insurers exaggerate members’ health needs to increase reimbursement.
The CMS moved to expand audits on MA plans to catch overpayments in May, after Administrator Dr. Mehmet Oz promised to more heavily scrutinize the program.
Still, this spring the Trump administration finalized MA payment rates for 2026 that were significantly higher than the Biden administration had earlier proposed, in part due to more recent data of rising costs.
