PROVIDENCE – Rhode Island has the single most concentrated Medicare Advantage market in the nation, according to a new analysis by the Kaiser Family Foundation.
The state’s top two insurers, Blue Cross & Blue Shield of Rhode Island and UnitedHealthcare, cover 99.3 percent of Advantage enrollees, the study found.
The second-most concentrated market is Wyoming, where the top three insurers cover 95.2 percent of enrollees, including 80.1 percent in the top two, Humana and United.
In Massachusetts, the top three insurers – Tufts Health Plan, Blue Cross and Blue Shield of Massachusetts, and Fallon Community Health Plan – hold a combined 71.2 percent of the market, the analysis showed.
Overall, Kaiser found, the average Medicare beneficiary has a choice of 33 Medicare Advantage plans available, but enrollment is “highly concentrated” among a small number of firms. For 14 states and the District of Columbia, a single insurer covers more than half of all Medicare Advantage enrollees. Only in New York do the top three insurers account for less than half of the state’s Medicare Advantage enrollment.
In Rhode Island, Blue Cross has 54.3 percent of the Advantage market, and United, 45 percent. The state also has one of the highest Advantage penetration rates in the nation, with 34 percent of Medicare enrollees signed up for the privately managed plans.
The national average is 24 percent, the Kaiser analysis shows; the highest-penetration states are Hawaii and Oregon, at 41 percent each. Massachusetts has a 19-percent penetration rate.
The Medicare Advantage program was created to attempt to provide a greater value to beneficiaries, especially those who require more coordinated care or support services, by allowing private insurers to get a flat fee from Medicare to cover those seniors.
Originally, most plans were health maintenance organizations, but now the majority (though not in Rhode Island) are preferred-provider organizations and private fee-for-service plans. Nationally, 46.3 percent of plans charge no extra premiums; for the rest, the average monthly premium is $44, up 22 percent from $36 per month in 2009.
Medicare pays private insurers more per beneficiary than its average costs for regular fee-for-service coverage, so the program has become controversial and is being cut back. Health care reform will phase down Medicare Advantage payments even more, the Kaiser analysis notes, “which is expected to ultimately affect plan participation, enrollment, premiums and extra benefits.” Still, Kaiser concluded, such plans “can be expected to remain an important option for many beneficiaries.”
As of March 2010, a record 11.1 million people – nearly a quarter of Medicare beneficiaries – were enrolled in Advantage plans, up from 10.5 million in March 2009. The dominant insurers in the market are United, Humana, Blue Cross/Blue Shield affiliates and Kaiser Permanente.
The full analysis is available online.
