MA market is more attractive than ever. Now is the time to get ahead of the competition.
Data Science

A Ripe Opportunity for Medicare Advantage Plans

January 21, 2021
Highest grossing margins ever means the time is right to get the most out of MA.
Chief Product and Client Officer


It isn’t often that forces align to create such a ripe opportunity for insurers to optimize their share of a single market. However, here we are. Looking back at 2020, Medicare Advantage (MA) plans outpaced other markets across key metrics – financial stability, margins and consumer popularity.

These metrics, coupled with temporary relief from regulatory scrutiny means innovative health plans have a window to get ahead of the competition through strategies to simplify and support both internal teams and provider partners.

Financial Stability

The meaning of “at risk” in healthcare payment has fundamentally and irrevocably shifted. Last year, provider practices with value-based contracts experienced greater financial stability as they continued to receive payment, even as utilization-based (fee-for-service) revenue plunged.

There is no question -- the pandemic drove home the strengths of value-based care to the physician and provider community. The time is right for health plans to reach out.

Highest Gross Margins Ever

Even with the strong history and expectation of high financial performance of MA plans, 2020 saw the highest average MA gross margins ever. When compared to 2019, average gross margins increased by $64 per member, per month. This is a 41-percent increase over margins for the first half of 2019.

Average gross margins per member per month through september 2018-2020

Consumer Popularity

The popularity of MA plans continues to grow rapidly year-over-year. In fact, enrollment has doubled over the last decade. In 2020, over two-thirds (36 percent) of all Medicare beneficiaries were enrolled in MA plans. The Congressional Budget Office anticipates enrollment to reach 51 percent by 2030.

MA Market Growth

With opportunity comes increased competition – more MA plans are available to consumers in 2021 than ever. The average MA beneficiary had 21 plans to choose from in 2018, this year they had 33. This is a 57 percent increase in consumer options. Additionally, an unprecedented 14 insurers entered the MA market for the first time, while six left.

Federal Probe Delay

In 2019, National Public Radio reported health insurers overcharged Medicare by nearly $30 billion in just three years primarily through inflated risk scores. Despite this, officials temporarily delayed a federal probe into insurers offering MA plans, citing a need for everyone to focus on patient care during the COVID-19 crisis. It is unclear how long the delay will last; the Department of Justice continues to pursue several lawsuits, including a recent $6.3 million false claim settlement levied against Kaiser Foundation Health Plan of Washington.

MA Complexities

Insurers offering MA plans must adhere to unique and complex reporting and coding practices as required by the Centers for Medicare and Medicaid Services (CMS). These codes – Hierarchical condition categories (HCCs) – are used by CMS to adjust risk scores that determine payment for MA beneficiaries.

Inaccurate HCCs are the root of many MA challenges.

Get Ahead of the Competition Now

In an environment of increasing competition and regulation, insurers offering MA plans must thoroughly and carefully evaluate their Hierarchical condition category (HCC) practices. Too many plans continue to rely on time-consuming, outdated, disjointed and faulty processes to acquire, review and submit HCCs. It’s time to simplify.

Innovative health plans successfully leverage proven technologies, automated coding support and machine-learning algorithms to help determine the appropriate level of member condition complexity and severity, accurately predict future costs of care, reduce regulatory risk exposure, drive provider collaboration and maximize MA payments. The best of these technologies:

  • Combine multiple data sources to bring together necessary, but previously isolated, information.
  • Leverage machine-learning algorithms to continuously improve coding accuracy and optimization across unique and differentiated network contracts.
  • Integrate with multiple systems and reveal key information, so everyone – from plan customer service, to care managers to care-delivery providers – can easily see potential coding gaps and help deliver the right care and record the right information right within existing workflows.

To learn more, I encourage you to download our white paper, Improve Reimbursement, Quality Scores and Risk Adjustment through Better HCC Practices.

Boost risk scores and revenue through automated coding support and machine learning algorithms