Here is what you’ll find in this week’s newsletter!

1. Important links 🔗 - the best articles we found this week about the Medicare Market along with links to Jared’s recent LinkedIn posts.

2. Deep Dive 📚 - BCBS Kansas City’s Exit: Medicare Advantage Market Impact 🖐

3. Compliance Chatter 📢 - The Tri-Agency Rule includes notice requirements and limitations!

4. Sponsor Snapshot 🚀 - brought to you by Modivcare.

It’s only a 5 minute read, but it will make you 10x smarter.

DEEP DIVE 📚

BCBS Kansas City’s Exit: Medicare Advantage Market Impact 🖐

BCBS of Kansas City is exiting the Medicare Advantage market at the end of 2024.

They point to “heighted regulatory demands and financial pressures.”

If you’ve been following the MA market recently, you know that these are legitimate concerns, especially for a small Health Plan.

While this presents some unfortunate decisions for seniors this coming AEP, it also presents opportunities for agents and plans to help!

Let’s drill down into BCBS of KC to better understand where the opportunities lie along with some evidence as to why they are exiting.

___

As suggested by the name, BCBS of KC is only in the Kansas City area. 20 counties in MO and 4 counties in KS. We will look at each state separately.

Missouri Enrollment

When including only the 20 counties in MO, BCBS of KC has the 4th largest Market Share.

20,679 of 164,946 enrollees (12.5% of the MA market) as of May 2024, with United, CVS, and Humana leading the way.

Here is enrollment by county. As you can see, the top 5 counties make up 90% of the enrollment in MO.

Nearly all of their members in MO are Individual/Non SNP.

Within the past year (May ‘23 to May ‘24), MA enrollment in these 20 counties grew by ~9,800 (combined) with most of the growth going to CVS (BCBS of KC was second).

It’s notable that much of the market growth from May ‘23 to May ‘24 in these counties was in Special Needs Plans. BCBS of KC notably has no Special Needs Plans.

Kansas Enrollment

When including only the 4 counties in KS, BCBS of KC has the 3rd largest Market Share.

11,901 of 70,723 enrollees (16.8% of the MA market), with United and CVS leading the way.

Here is enrollment by county as of May 2024.

Nearly all of their members in KS are Individual/Non SNP.

Within the past year (May ‘23 to May ‘24), MA enrollment in these counties grew by ~4,400 (combined) with most of the growth going to CVS (with BCBS of KC second).

Similar to MO, a portion of the overall growth in the 4 county market was Special Needs Plans. And again, BCBS of KS has no Special Needs Plans.

Overall, BCBS of KC has had success in growing a decent size book of business in their footprint.

One area that stands out is the lack of Special Needs Plans. It’s likely the case that some of their members would be eligible for a Special Needs Plans which could be an opportunity for plans/agents this AEP.

Loss Ratio Analysis

Looking at recent Loss Ratio experience (as reported in NAIC A&H Experience Exhibits), it becomes more clear why the company has decided to exit the market.

After adding in acquisition and other administrative expenses, the company lost a lot of money on their MA block over the last few years.

One thing that stands out about their loss ratio experience is the annual premium per member. It’s significantly lower than the other large carriers in these markets.

Here is the Per Member Annual Premium in Missouri.

It’s unclear why their revenue is lower than competitors. Could be related to risk adjustment, Stars and possibly lack of Special Needs Plans (DSNPs or CSNPs).

Special Needs Plans generate significantly higher premium revenue per member.

One thing is clear. Whoever picks up these members will need to generate revenue more in line with the rest of the market in order to lower loss ratios.

Bottom Line

The bottom line is this. There are 32,000 Medicare Advantage members who will be looking for a new plan at the end of 2024.

From a financial perspective:

→ For insurance carriers, this represents $350 million (at $11,000 PMPY) - $480 million (at $15,000 PMPY) in premium revenues.

→ For insurance agents, this represents at least $9.8 million in annual commission revenue (using $306).

But even more importantly, there are 32,000 individuals who will be making important choices for what Medicare coverage best meets their health insurance and health care needs.

We as leaders in the Medicare space need to make every effort to help them navigate this coming AEP with compassion, integrity and skill!

____

Note: MA Enrollment Data visuals above come from our soon to be released (and currently unnamed 😁) Medicare Advantage enrollment tool. Click here if you want to get early access:

Sources: CMS.gov Medicare Advantage enrollment statistics and NAIC A&H Experience Exhibits.

____

Can you do me a favor? Forward this to another leader in the Medicare space who could benefit from this info. Thanks!

If you’re ready, here are some ways we can help you:

• Newsletter Sponsorship opportunities: Promote your product or services to leaders in the Medicare space. Let’s discuss. (link)

• Market Research: Reports that help you wrap your arms around the Senior focused insurance markets. (link)

• Consulting: We can help you develop new insurance products for the Medicare market, appraise your books of business, and keep you compliant. Let’s discuss. (link)