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 📚 - This week’s deep dive looks at Q3 ‘23 Medicare Carrier financials SIDE-BY-SIDE.

3. Compliance Chatter 📢 - CY2025 proposed rule for MA Supplemental Benefits.

4. Sponsor Snapshot 🚀 - brought to you by Telos Actuarial.

5. Data Visual of the week 📊 - Data Visual highlighting share of 2024 MA plans with Supplemental Benefits.

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

DEEP DIVE 📚

Q3 '23 Medicare Carrier Financials Side-by-Side!

In this week’s deep dive, we are looking at publicly traded Medicare carrier Q3 2023 financials side-by-side.

(to see Q2 2023 results go here)

If you are a numbers nerd 🤓 like me… you’re welcome!

As we’ve previously explored, the Medicare market is a growing market.

The insurance carriers included in this analysis are all trying to capture a piece of that market and do so profitably. Here they are:

• UnitedHealth Group (“UNH”)

• Elevance Health (“ELV”)

• Centene Corp. (“CNC”)

• Humana (“HUM”)

• CVS (“CVS”)

• Cigna (“CI”)

Aside from Centene, these carriers have both health insurance operations and healthcare services operations (providers, PBMs, pharmacies, etc.).

Here is the split of revenues between these two segments for each carrier:

Income Statement & Membership Side-By-Side

To compare and contrast the Q3 2023 results for each carrier, the Income Statement is split between “Insurance Operations” and “Healthcare Service Operations”. The consolidated statement is also displayed.

One Note: Healthcare Service Operations is different for each carrier, but generally includes providers, pharmacies, PBMs, and technology.

YoY % Change

Here is the % change in key metrics from Q3 2022 to Q3 2023.

One Note: CVS went from a loss to a profit. Displaying % change is strange, so it was left out.

Current Valuation Metrics

Here are current valuation metrics for these carriers.

Observations

A few notable observations.

Combined, these carriers generated $338 billion in Revenues and $18.2 billion in operating income during Q3 2023.

Combined, they make up more than 50% of the Medicare Advantage and Medicare Supplement markets.

Membership

• 8% Combined Medicare Advantage member growth 

  • led by Humana (15% growth)

  • Centene lost 14% of Medicare Advantage members

• Medicare Supplement membership down slightly

  • CVS grew 1% while all others declined

Insurance Operations

• Combined 11% revenue increase led by Humana & CVS (17%)

• Combined Medical Loss Ratio increase of 0.5%

  • CVS (4.3%) saw the largest increases

• Combined profit margin flat

  • half the Companies grew profit margin, the other half’s profit margin fell

Healthcare Services Operations

• Combined 12% revenue increase led by UNH (22%)

• Combined profit margin up (1.2%)

Cigna MA block

• Also of note is that Cigna announced interest in selling their block of Medicare Advantage business.

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Sources: Carrier quarterly financial earnings releases and 10-Qs.

DATA VISUAL of the Week 📊

This week’s data visual comes from KFF (link). It shows number of Special Needs Plans over time.

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)