Don’t underrate power of provider-sponsored MA plans

Hospitals and health systems are increasingly taking risk for the cost of Medicare patients and the quality of the care they receive, according to a new analysis. 

Analysis from Avalere shows that plans owned by providers and integrated health systems have a significant and growing presence in Medicare Advantage (MA), as well as in other markets. Specifically, nearly 60% of new entrants to the MA market in 2016 are provider-sponsored plans.

Carpenter

“As managed care executives monitor the entry of new insurers in their respective geographic markets, they should increasingly consider the entry of new provider-sponsored MA plans as well as the expansion of provider-sponsored MA plans into other markets,” says Elizabeth Carpenter, vice president, Avalere.

In total, 70 provider-sponsored parent organizations will offer 403 MA plans in 41 states. Increasingly, large providers are leveraging their integrated delivery networks and building on their experience bearing risk to offer insurance to consumers across the country.

“The entry of new provider-sponsored plans into MA diversifies local markets, creating new choice for consumers,” says Carpenter. “These provider-sponsored plans compete alongside existing national and regional insurers in the markets they serve.”

While provider-sponsored plans play a large role in MA, serving nearly one in five MA beneficiaries, these plans can also be significant players in other markets, according to Carpenter.

“Specifically, 12 of the 15 of largest provider-sponsored MA plans cover more commercial and Medicaid members than Medicare beneficiaries,” Carpenter says. “Looking ahead, as provider-sponsored plans continue to enter the MA market, they may also increasingly seek to enter other markets and compete alongside traditional insurers.”

These data underscore previous Avalere research looking at new entrants to the MA market. Specifically, the study shows that providers sponsor more than half of plans (54%) that entered and remained in MA between 2012 and 2015.

“Provider-sponsored plans diversify choice for consumers picking a Medicare Advantage plan,” she says. “In particular, their high-quality scores may drive additional enrollment over time.”

Avalere analysis also shows that provider-sponsored plans deliver high-quality care to enrollees. While 32% of total MA enrollees in 2015 were in a 4.5 or 5 star plan, 70% of provider-sponsored MA plan enrollees were members of a plan with a similar stars rating. Quality data are not yet available on new entrants to the market in 2016

In total, 19% of MA enrollees and 6% of all Medicare beneficiaries enrolled in provider-sponsored MA plans in 2015. Additional enrollment data for 2016 that account for the annual election period will be available soon.

Funding for this analysis was provided by Aetna. Avalere maintained full editorial control of the analysis.