Avalere Health
An Inovalon Company
Press Release

Nearly 60 Percent of New Medicare Advantage Plans Are Sponsored by Healthcare Providers

Elizabeth Carpenter | Jan 26, 2016

A new analysis from Avalere Health finds that hospitals and health systems are increasingly taking risk for the cost of Medicare patients and the quality of the care they receive.

In 2016, providers represent 58 percent1 of new Medicare Advantage (MA) organizations entering the program. In total, 70 provider-sponsored parent organizations will offer 403 MA plans in 41 states.2 Increasingly, large providers are leveraging their integrated delivery networks and building on their experience bearing risk to offer insurance to consumers across the country.

“Starting a Medicare Advantage plan allows high-quality hospitals and health systems to benefit substantially from the value they deliver,” said Dan Mendelson, president of Avalere. “Growth in the Medicare Advantage program is helping the government shift to value-based payment methods.”

These data underscore previous Avalere research looking at new entrants to the Medicare Advantage market. Specifically, the study shows that providers sponsor more than half of plans (54 percent) that entered and remained in MA between 2012 and 2015.3 

“Provider-sponsored plans diversify choice for consumers picking a Medicare Advantage plan,” said Elizabeth Carpenter, vice president at Avalere. “In particular, their high-quality scores may drive additional enrollment over time.”

Avalere analysis also shows that provider-sponsored plans deliver high-quality care to enrollees. While 32 percent of total MA enrollees in 2015 were in a 4.5 or 5 star plan, 70 percent of provider-sponsored MA plan enrollees were members of a plan with a similar stars rating.4,5 Quality data are not yet available on new entrants to the market in 2016.

In total, 19 percent of MA enrollees and 6 percent of all Medicare beneficiaries enrolled in provider-sponsored MA plans in 2015.6   Additional enrollment data for 2016 that accounts for the annual election period will be available in February.

Access the full report here

Funding for this analysis was provided by Aetna. Avalere maintained full editorial control.

1. Avalere analysis of 2016 MA Landscape file.

2. Avalere analysis of 2016 MA Landscape file.

3. Avalere analysis of 2016 MA Landscape file and 2016 Enrollment file.  Includes Local Coordinated Care plans (LCCPs), Private Fee-for-Service (PFFS) plans, and Medicare Savings Account plans (MSAs).  Does not include Special Needs Plans (SNPs), Employer Group Waiver Plans (EGWPs), PACE plans, Duals Demo plans, or Cost Plans, which are not available to all Medicare beneficiaries in a county.

4. http://avalere.com/expertise/managed-care/insights/new-medicare-advantage-market-entrants-diversify-consumer-choice

5.  Avalere analysis of 2015 MA enrollment file and 2015 MA star ratings file.  Includes Local Coordinated Care plans (LCCPs), Regional Coordinated Care Plans (RCCPs), Private Fee For Service (PFFS) plans.  Does not include Special Needs Plans (SNPs), Employer Group Waiver Plans (EGWPs), PACE plans, Duals Demo plans, Cost Plans, or Medicare Savings Account plans (MSAs).

6. Kaiser enrollment accounts for 48 percent of the 4.5 or 5 star provider-sponsored plan enrollment

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