Medicare Advantage Membership Grows, But Michigan Plans Lost $194 Million in 2023
In Michigan, Medicaid HMOs have lost 15% of their members but were still strongly profitable in 2023. Medicare Advantage plans have increased enrollment but have lost $392 million in the last two years.
The reports provide a comprehensive and objective analysis of strategies and key trends for Michigan's health insurers and provider systems. Part One presents an analysis of the health insurers, their financial performance, enrollment and market share. The data show the impact of the “Great Unwinding” of Medicaid recipients beginning in June 2023 and how Michigan HMOs were impacted. The Part Two report discusses the health systems, their financial results and their inpatient occupancy and payer mix based on 2020 data. The reports also include an extended analysis of the implementation of key elements of the Affordable Care Act in the state, including Medicaid expansion, Medicare Accountable Care Organizations and developments in the individual market.
Key findings in the new report:
- After growing by 275,000 lives between the end of 2020 and June 2023, enrollment in Medicaid HMOs has now fallen by 336,000 lives, or 16.4% through the first quarter of 2024. As in other states, Michigan’s Medicaid agency began a process of reviewing current eligibility for the 3 million beneficiaries in the state, about 90% of whom are in managed care plans. For example, enrollment in Meridian’s Medicaid plans dropped by more than 121,000 or 21.7% since the end of 2022.
- Based on an average premium of $346 per member per month, Medicaid HMOs could see their revenues reduced by $1.4 billion in 2024. That likely also means less revenue for hospitals and clinics, especially safety net providers that see a high number of patients covered by Medicaid or uninsured.
- While Medicaid enrollment has decreased, health plans have seen enrollment in individual plans and Medicare Advantage plans grow sharply in the past 15 months. In the first quarter of 2024, enrollment in individual health plans increased by 21.7%, with Meridian Health adding 32,000 new enrollees and Priority Health gaining almost 17,000.
- Medicare Advantage plans have enjoyed steady growth in recent years and added almost 108,000 members in 2023. Three Humana companies added 35,000 members in Michigan, and three UnitedHealthcare companies added almost 24,000 lives. However, Medicare Advantage plans, both for seniors and persons dually eligible for Medicaid and Medicare, reported combined losses of $190 million. Blue Cross Blue Shield Mutual alone lost $142 million in 2023, while four HMOs - Aetna, Blue Care Network, Physicians Health Plan and Priority Health - reported large losses.
- The growth of Medicare Advantage enrollment has implications for hospital systems and physicians. Those plans are notorious for limiting provider payments and using prior authorization to limit care.
- Combined net income for Michigan HMOs dropped from $542 million in 2022 to $456.9 million in 2023., which was 1.8% of underwriting revenues of $25.817 The HMOs that were most profitable were Medicaid managed care plans UnitedHealthcare Community Plan and Molina Healthcare.
- By far, Medicaid was the most profitable line of business, with underwriting income of $253.7 million and combined underwriting income in the last four years of $945 million. Only one Medicaid HMO, HAP-CareSource, was not profitable in 2023.
Table of Contents
- Introduction
- Market Structure
- Health Plans
- Provider Systems
- Trend Review
- Health Plan Enrollment
- Individual Plans and the Marketplace
- Medicaid Managed Care
- Medicare Plans
- Health Plan Revenues and Income
- Financial Results by Line of Business
- Provider Payments
- Administrative Expenses
- Health Plan Capital
- A Look Ahead
Methodology
The reports analyzing state health care markets are intended to be a resource to health care organizations facing a full range of challenges but also seeking to identify and benefit from opportunities that present themselves.
This report is presented in three main sections. The first part, Market Structure, describes the major health insurers and hospital systems in the state, showing recent entrants and the high-level of consolidation that has occurred in both the health plan and provider markets. Market Trends, the next section, presents our analysis of enrollment trends and financial results for the health insurers. The last section contains our analysis of financial and inpatient utilization data on the hospitals in the state.
The analysis of health plan companies is based on their annual and quarterly statements filed with the Department of Insurance, including forms prescribed by the National Association of Insurance Commissioners and supplemental reports required by the state. The publisher also uses Medicaid data from the Department of State Health Services and Medicare health plan and hospital data from the Centers for Medicare and Medicaid Services. The publisher has that data together with insights that they have gained in interviews with dozens of leaders in health care organizations in the state.
LOADING...
