Aetna, Insurtechs Outpaced Medicare Advantage Peers in Quieter OEP

Medicare Advantage enrollment grew by 350,000 members during the 2024 Open Enrollment Period (OEP), according to CMS’s May data release and AIS’s Directory of Health Plans. That’s a 31% drop from last year, which saw 507,000 sign-ups from February to May, and it reflects a slowdown in MA growth also seen in the Annual Election Period (AEP). Occurring every January to March, the OEP allows MA enrollees who made a selection during the AEP to make a one-time coverage change. This year, about 68% of new sign-ups chose a plan from a large national carrier, a downward shift from last year’s 80%. And the usual suspects — UnitedHealthcare and Humana Inc. — did not lead overall membership growth. That distinction went to CVS Health Corp.’s Aetna, which continued its explosive growth from the AEP, gaining another 193,000 lives. Last year, United alone netted 48% of all OEP gains, while Humana took another 29%. This year, however, United’s membership declined by 0.3%. And while Humana kept its No. 2 overall spot in the OEP, its gains were far more modest at 51,000 lives vs. 150,000 in 2023. Both insurers have been reporting higher-than-expected MA utilization since last summer, leading Humana to slash its 2024 earnings outlook. Aetna, meanwhile, was aggressive with its 2024 expansion, adding 255 new counties to its footprint and offering new $0 premium plans and expanded products for dual eligibles, among other enhancements. Since October, the insurer has added more than 800,000 members to its MA rolls. But this growth is unlikely to continue and may do more harm than good, at least in the short term, some analysts warn. Higher-than-expected MA utilization also hit CVS's first-quarter earnings hard, and the company has indicated it will not focus on expansion in 2025. Instead, Aetna will “adjust benefits, enhance medical management, look at networks, etc.,” prioritizing “margin over membership” and likely exiting some geographic markets, per comments made by CVS Chief Financial Officer Thomas Cowhey during the Bank of America Merrill Lynch Global Healthcare Conference on May 14. Cowhey acknowledged that Aetna could lose up to 10% of its existing MA enrollment as a result of those strategic exits. “CVS made a concerted effort to increase enrollment in 2024 and priced the majority of newly enrolled lives at 0% margin, meaning it prioritized offering comprehensive benefits and strong networks to increase enrollment with the hope that lives would be profitable in coming years,” Capstone analysts David Mohler and Grace Totman wrote in a May 17 research note. “However, in light of the considerable regulatory headwinds MA faces in 2025, CVS has floated adopting a new strategy to recover profitability.” While MA stalwarts Centene Corp., Elevance Health, Inc. and Kaiser Permanente joined Aetna and Humana in the top 10 in terms of OEP growth, all three were outshone by two fast-growing startups, Devoted Health and Alignment Health Plan, which netted 15,000 and 13,500 new members, respectively. California-based startups Clever Care Health Plan and Astiva Health, which both focus on a multicultural approach to MA, also performed well relative to their size. Rounding out the top 10 were Puerto Rico-based Medical Card System, Inc., New York City’s Healthfirst and CDPHP, a physician-founded insurer that recently announced an affiliation deal with the parent company of Excellus Blue Cross Blue Shield.