As expected, enrollment in Medicare Advantage plans took a hit in January — falling nearly 3% to just shy of 11 million members compared to year-end 2009. (Enrollment is still up 5% year-over-year).
Also as expected, the biggest losses were among Private Fee for Service plans, reflecting market exits by WellCare and Coventry in light of looming reimbursement cuts. PFFS enrollment fell 33% to 1.6 million. Since PFFS plans are the least efficient Medicare Advantage product (see prior post), it’s hard to argue they are an economically viable product. Unfortunately for health plans, however, PFFS was a fast-growing product.
But membership in local CCPs (largely Medicare HMOs) – the most efficient Medicare Advantage product – was up 2.8% to 8.2 million members. Regional PPOs also enjoyed gains, up 54% to 689,000. All of which is a good indication of what will likely happen to Medicare Advantage when the full weight of reimbursement cuts take hold (Note: reform or not, cuts are coming). Wither PFFS. Gains in PPO. HMOs will struggle, but hang tough.
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