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UnitedHealth's headquarters building in Minnetonka, Minnesota. (Photo: Mike Bradley/Bloomberg)

Life Health > Health Insurance > Medicare Planning

Medicare Advantage Market Still Looks Great: UnitedHealth Executives

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What You Need to Know

  • The annual election period for 2023 coverage starts Saturday.
  • One small, high-profile player recently announced a big market area reduction.
  • The UnitedHealth Medicare unit chief sees any competitor concerns about Medicare Advantage sales as a them problem.

UnitedHealth Group executives expect Medicare Advantage enrollment to boom in 2023, and they expect their own Medicare Advantage sales growth to exceed industry sales growth.

The executives talked about their optimistic view of the Medicare Advantage plan market Friday, during a conference call the company held to go over results for the third quarter with securities analysts. The third quarter ended Sept. 30.

Tim Noel, the CEO of UnitedHealth’s Medicare and retirement unit, said that UnitedHealth believes that overall Medicare Advantage enrollment will continue to grow more than 8% more year, and that UnitedHealth will be in a great position to increase its own sales.

“I like my changes of outperforming the industry in 2023 and gaining share,” he said.

What It Means

For a financial advisor or insurance agent, growth of Medicare Advantage program enrollment might mean getting more client questions about whether the clients should stick with Medicare supplement insurance or sign up for Medicare Advantage plans.

From the perspective of insurers, a strong Medicare plan annual election period would mean that, in a time of geopolitical uncertainty and financial market turmoil, at least one thing would be going right.

The Medicare Plan Market Now

The Medicare Advantage program gives private insurers a chance to sell coverage that looks to the enrollee like an alternative to the traditional Medicare Part A hospitalization plan and Medicare Part B physician and outpatient services plan.

The plan providers fill many of the patient cost-sharing holes in “Original Medicare,” often for a low or $0 monthly premium, in exchange for the enrollee accepting a lower reimbursement rate for out-of-network providers and agreeing to accept the plan’s care management efforts.

The annual election period for Medicare Advantage plans and Medicare Part D prescription drug plans starts Saturday and runs through Dec. 7.

BrightHealth, a 6-year-old, Minneapolis-based insurance startup, announced earlier this week that it will focus on Medicare Advantage plan sales in Florida and California, and give up on efforts to sell Medicare Advantage plans in Arizona, Arkansas, Colorado, Connecticut, Delaware, Georgia, Hawaii, Idaho and Illinois in 2023.

Corey Metzman, the chief operating officer at Chapter, a web-based Medicare plan broker, has reported seeing plans and distributors focusing more on agent and customer retention, and less on growth for the sake of growth.

Andrew Witty, UnitedHealth’s CEO, said that the company thinks Medicare Advantage plan enrollment will keep growing growth because Medicare Advantage plan care management efforts cut costs and improve enrollees’ health.

“For example, MA members with diabetes have over 50% lower rates of any category of complication, and over 70% lower rates of serious complication,” Witty said.

UnitedHealth may be in an especially strong position within the market because brokers seem to like UnitedHealth’s moves to improve prescription drug benefits, dental benefits and other frequently used benefits, Noel said.

The Earnings

UnitedHealth is reporting $5.4 billion in net income for the quarter on $81 billion in revenue, up from $4.1 billion in net income on $72 billion in revenue for the third quarter of 2021.

Operating earnings at the Minnetonka, Minnesota-based company increased to $7.5 billion, from $5.7 billion.

The company ended the quarter providing or administering health coverage for 51.3 million people, up from 50.4 million people a year earlier.

Medicare Advantage plan enrollment increased to 7 million, from 6.5 million.

The number of people with UnitedHealth Medicare supplement insurance coverage held steady at about 4.4 million.

UnitedHealth’s headquarters building in Minnetonka, Minnesota. (Photo: Mike Bradley/Bloomberg)


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