“As the baby boomers become Medicare-eligible, organizations across the healthcare landscape are stepping up to compete,” said Dan Mendelson, CEO at Avalere. “In particular, health systems are playing an even larger role in the Medicare Advantage program, further blurring the lines between providers and payers.”

Indeed, recent entrants to the Medicare Advantage market include established commercial plans, as well as major health systems and provider groups. Of the 28 organizations referenced above, 15 – or 54 percent – are provider-sponsored, as shown in Figure 1 below.

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Similar trends are also evident in the health insurance exchange and employer-sponsored insurance markets.

“In addition to Medicare Advantage, providers are becoming payers to compete on exchanges and serve employers,” said Elizabeth Carpenter, vice president at Avalere. “When combined with new start-ups and other options created by the Affordable Care Act, the insurance market looks increasingly diverse.”

The analysis above is part of a new Avalere brief, “New Market Entrants: Growth and Diversification in U.S. Health Insurance,” available here. The brief explores new entrants across insurance markets, including Medicare Advantage, public exchanges, and employer-sponsored insurance. In addition, it considers how delivery system innovation and technology increase the flow of information and heighten competition in the insurance marketplace.

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

Methods

Avalere analysis of 2015 Medicare Advantage Landscape File and June 2015 Medicare Advantage Enrollment File. New Medicare Advantage entrants are parent organizations who did not contract with Medicare in 2011, but who did contract in either 2012, 2013, 2014, or 2015, and who remain under contract in 2015. Analysis does not count PACE, Cost, or Duals-Demo plans as Medicare Advantage plans.

1. Baylor Health System entered Medicare Advantage by merging with Scott & White Healthcare.

2. Catholic Health Initiatives entered Medicare Advantage by acquiring SoundPath.

3. Catholic Health Partners entered Medicare Advantage by acquiring Kaiser’s business in Ohio.