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 📚 - 2024 Medicare Advantage Loss Ratio Analysis: By Carrier and State 🌠

3. Sponsor Snapshot 🚀 - brought to you by Modivcare

4. Compliance Chatter 📢 - Several new regulations to review!

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

DEEP DIVE 📚

2024 Medicare Advantage Loss Ratio Analysis: By Carrier and State 🌠

For Medicare focused insurance carriers, one of the most important metrics is the Medical Loss Ratio (“MLR” or “Loss Ratio”).

If the MLR gets too high, the insurance company is likely in financial stress and possibly losing money. If the MLR gets too low, the insurance company may be required to pay a refund. Additionally, a small change in the MLR results in a large change in profit/loss.

Medicare MLRs are analyzed by actuaries, product developers, CFOs, and regulators. They are reported by publicly traded companies each quarter and are submitted to regulatory bodies each year.

The importance of MLRs has been discussed a lot by public and private carriers recently as Medicare utilization has increased, and the level of rate adjustments received by MA carriers was lower in 2024, and 2025. Importantly, the level of rate adjustments in 2026 will be up significantly (see analysis here). The Effective Growth Rate of 9.04% reported in the rate announcement reflects the high medical trends experienced by Medicare Advantage Carriers.

As carriers developed their 2025 products, we saw elevated levels of market exits, service area reductions, and plan terminations (see analysis here) - likely in response to mounting margin pressure.

If you are a leader in the Medicare space, understanding what a loss ratio is, and wrapping your arms around recent market and carrier results will put you one step ahead.

Okay, here we go.

What is a Medical Loss Ratio (MLR)?

In short, the MLR is the percentage ratio of Medical Claims Expense divided by Premium Revenues.

Medical Loss Ratio = Medical Claims Expense / Premium Revenues

Why is it important?

MLRs for Medicare Advantage insurance products are usually between 85 - 90%.

This means there is only 10-15% of the Premium Revenues left to pay other expenses associated with acquiring customers and managing the products.

Once an insurance company pays commissions, administrative and claims expenses, and other overhead expenses, there is typically only 3 - 6% left for profits.

Because of this, a small change in MLR results in a large change in profit.

For Example, if a carrier achieves a 3% profit margin with an 85% MLR, and their MLR drops to 84%, their profit margin increases to 4%. That’s a 33% increase in profit margin based on a 1% drop in MLR!

2024 Loss Ratio Results

With that background in mind let’s take a look at recent full year Medicare Advantage Loss Ratio results.

One note→ The analysis below is based on data reported in the NAIC A&H Experience Exhibits, and excludes data that is reported exclusively to the California Department of Managed Health Care. A rough estimate is that the analysis is missing ~10% of the total MA market.

Overall Loss Ratios in the MA market increased to 89.2% in 2024, up from 85.9% in 2023.

A 3.3% increase in MLR is substantial - and helps explain the volatility we saw during the 2025 AEP, including tighter plan designs and market exits.

Early 2025 Loss Ratio results for publicly traded companies were down 0.7% combined in Q1 2025 when compared to Q1 2024 (go here for full break-down). Indicating 2025 MLRs may be stabilizing a bit.

With that backdrop, let’s look at how loss ratios varied across the largest Medicare Advantage carriers in 2024.

Results By Carrier

Medicare Advantage MLRs vary by carrier. The chart below displays the top 8 carriers (based on Premium Revenue according to NAIC A&H Experience Exhibits).

There are few outliers here.

The first is Kaiser (100%+ MLRs). There is analysis here that suggests this is due to the fact that Kaiser is vertically integrated. While the MLR is reported as ~100%, that medical expense is going to provider groups who they own as revenues.

The second is CVS. Their MLR increased 10% from 2023 - 2024. The higher than market increase in MRL is likely largely due to their significant enrollment growth in 2024 (link).

Geography matters too. Here’s how MLRs played out across states in 2024.

Results By State

The map below shows 2024 MLRs by State.

Delaware (115%), Vermont (105%), Wyoming (103%), Idaho (101%) and Maryland (101%) all experienced loss ratios >100%.

Oklahoma (84%), Virginia (84%) and Tennessee (84%) all experienced loss ratios <85%.

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The rise in 2024 Medicare Advantage loss ratios - from 85.9% to 89.2% - represents a material shift in underlying profitability. For a product line that typically operates within narrow margin bands, a 3.3% increase in MLR can translate into a 50–100% reduction in operating margin, depending on carrier efficiency.

The AEP 2025 disruption in plan participation and benefit design reflects this margin pressure. While early 2025 data suggests some stabilization, sustainable improvement will likely require a combination of higher effective rates in 2026, improved risk adjustment accuracy, and tighter medical management.

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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)