A key goal of the Medicare Advantage program was to promote competition to improve health benefits and lower costs for seniors. However, a new report from KFF reveals that this may not be happening.
The report published Monday found that in 2024, 79% of counties in the U.S. were highly concentrated for Medicare Advantage, and 18% were very highly concentrated.
In addition, 89% of Medicare Advantage enrollees were in a highly concentrated market, and 4% were in a very highly concentrated market in 2024. About 90% of Medicare beneficiaries lived in a county where at least half of Medicare Advantage enrollees were in plans sponsored by one or two insurers.
“Higher market concentration in Medicare Advantage insurance markets may lower the incentive for insurers to compete for potential enrollees by making plans more appealing through more comprehensive benefits or lower costs,” the researchers said.
For the analysis, KFF examined publicly available, county-level Medicare Advantage plan information and enrollment data for all 50 states, as well as Washington D.C. and Puerto Rico.
KFF also found that rural counties had more concentrated Medicare Advantage markets. In 2024, about 39% of the most rural counties were very highly concentrated, compared to 6% of urban counties.
In addition, UnitedHealthcare or Humana was the largest Medicare Advantage insurer in more than half of the counties in 2024. UnitedHealthcare was the largest Medicare Advantage insurer in 41% of counties in 2024, while Humana was the largest Medicare Advantage insurer in 25% of all counties. Blue Cross Blue Shield plans, meanwhile, were the largest in 11% of counties, followed by CVS Health (8% of counties) and Elevance Health (4% of counties).
UnitedHealthcare and Humana have long been the two largest insurers in the Medicare Advantage market, and together, they accounted for nearly 47% of total enrollment nationwide in 2024.
The researchers noted that although the Medicare Advantage market has become very concentrated, this has not been a recent focus for policymakers or regulators.
“The most recent activity at the federal level occurred in 2017 when the Department of Justice blocked a merger between insurers Aetna and Humana, arguing if it went through it would significantly raise market concentration in the Medicare Advantage market,” KFF said in the report. “More recently, the conversation regarding competition in health care has revolved around increased consolidation in provider markets, especially hospitals and health systems.”
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