February 4, 2022

Large MA insurers still towering over fast-growing “insurtechs”

With 29M Americans now enrolled in Medicare Advantage (MA)—an eight percent increase over last year—insurers are engaged in fierce competition for their slice of the lucrative and growing market. Using federal enrollment data, the graphic below summarizes the current MA landscape. Across the last decade, MA enrollment has nearly doubled, reaching 45 percent of the eligible Medicare population. While buzzy “insurtechs” (startups promising to revolutionize the standard insurance model with proprietary technology solutions) frequently boast high enrollment growth, they still account for a small fraction of the market. The MA market remains highly concentrated, with the five largest payers enrolling two-thirds of beneficiaries, and one of those, UnitedHealthcare, covering more than a quarter of all enrollees. Despite (or perhaps because of) their hyper-charged growth, many “insurtechs” have struggled to keep down medical loss ratios, leading their stock prices to plummet. To succeed, they will need to learn how to control costs as deftly as their traditional competitors, or risk being left behind (or bought out) as the competition for MA lives heats up.

MA Payer Growth Image