Medicare Advantage Update. Southeastern Actuaries Conference November 15, 2007

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1 Stuart Rachlin, Consulting Actuary Tampa, FL F.S.A., M.A.A.A. Medicare Advantage Update Southeastern Actuaries Conference November 15, 2007 Grand Floridian Resort Orlando, FL

2 Demand for Medicare Medicare Beneficiaries - Examples 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 0 Florida Texas Georgia Tennessee North Carolina Source: CMS s January 2006 MA & PDP: State by State Summary Table 2

3 MA Penetration by County

4 California 4

5 Florida 5

6 Georgia 6

7 South Carolina 7

8 New York 8

9 MAPDs by Total Enrollment in Parent Organization As of October 1, 2007 Parent Organization MAPD Enrollment MA Only Enrollment Total Enrollment United HealthCare Group, Inc. 1,268, ,938 1,394,479 Humana Inc. 1,093,070 46,303 1,139,373 Kaiser Permanente 841,266 41, ,447 WellPoint, Inc. 253, , ,199 Coventry Health Care Inc. 156, , ,432 Health Net, Inc. 206,985 28, ,172 Highmark Inc. 223,129 9, ,395 Aetna Inc. 147,671 41, ,639 Blue Cross Blue Shield of Michigan 179,071 7, ,121 Independence Blue Cross 118,044 44, ,823 WellCare Health Plans, Inc. 107,236 51, ,586 HIP, Health Plan of New York 124,984 3, ,115 NewQuest Health Solutions LLC 119,988 6, ,645 Aveta, LLC. 119, ,318 SCAN Health Plan, Inc. 100, ,716 Universal Health Care Inc. 94, ,564 Total Other 2,299, ,871 3,032,543 Grand Total 7,454,337 1,381,230 8,835,567 Source: CMS monthly report by contract_oct2007_ xls. 9

10 Medicare PDPs by Total Enrollment in Parent Organization Parent Organization Enrollment as of Sept Enrollment as of Sept Change in Enrollment UnitedHealth Group 4,696,544 4,488, ,970 Humana Inc. 3,696,544 3,471, ,680 WellPoint, Inc. 1,214, , ,555 Member Health, Inc. 1,166, , ,837 WellCare Health Plans, Inc. 971, ,930 60,733 Coventry Health Care, Inc. 717, ,512 28,209 Universal American Financial Corp. 471, ,312 26,131 CVS-Caremark, Inc. 361, ,415-53,955 Health Net, Inc. 348, ,202 58,435 Wellmark, Inc. 342, ,924 5,278 Health Care Service Corp. 320, ,330 11,441 Medco Health Solutions, Inc. 317, ,406-97,869 Aetna, Inc. 307, ,818-2,310 CIGNA Corp. 304,148 NA NA Longs Drug Stores Corp. 238,305 NA NA Sierra Health Services, Inc. 196,482 NA NA Torchmark Corp. 169,557 NA NA Total Other 1,530,951 NA NA Grand Total 17,137,900 NA NA Source: Medicare Advantage, Cost, PACE, Demo and Prescription Drug Plans Coverage Enrollment - Monthly Enrollment Report by Contract, from CMS, released Sept.17,

11 Number of MA Contracts by State State Number of MA Contracts State Number of MA Contracts State Number of MA Contracts State Number of MA Contracts Alabama 43 Illinois 57 Montana 39 Rhode Island 38 Alaska 33 Indiana 46 Nebraska 38 South Carolina 44 Arizona 52 Iowa 43 Nevada 42 South Dakota 37 Arkansas 41 Kansas 42 New Hampshire 34 Tennessee 48 California 58 Kentucky 41 New Jersey 43 Texas 58 Colorado 41 Louisiana 43 New Mexico 42 Utah 41 Connecticut 41 Maine 37 New York 65 Vermont 35 Delaware 38 Maryland 42 North Carolina 41 Virginia 44 District of Columbia 42 Massachusetts 43 North Dakota 38 Washington 48 Florida 73 Michigan 43 Ohio 55 West Virginia 41 Georgia 48 Minnesota 42 Oklahoma 43 Wisconsin 45 Hawaii 40 Mississippi 39 Oregon 52 Wyoming 36 Idaho 42 Missouri 46 Pennsylvania 58 Puerto Rico 34 United States Total: 424 Source : Kaiser Family Foundation 11

12 Medicare Advantage, Cost, PACE, Demo, and Prescription Drug Plan Contract Report - Monthly Summary Report (Data as of October 2007) Current Contract Summary: Number of Contracts MA Only Enrollees Drug Plan Enrollees Total Enrollees Total MAPD Contract 601 1,494,377 7,454,358 8,949,143 Local CCPs ,379 5,859,657 6,296,444 PFFS , ,344 1,693,242 Demos 38 1, , , Cost , , , Cost (HCPP) 13 76,571 NA 76,571 PACE 38 NA 13,421 13,421 MSA 2 2,260 NA 2,260 Employer Direct PFFS 1 10,738 NA 10,738 Pilot ,050 NA 113,050 Regional PPOs 14 10, , ,660 Total PDPs 100 NA NA 17,179,743 Employer/Union Only Direct Contract PDP 10 NA 124, ,445 All Other PDP 90 NA 17,055,298 17,055,298 TOTAL 701 NA NA 26,128,886 Source: CMS Monthly Summary Report 12

13 Medicare Advantage, Cost, PACE, Demo, and Prescription Drug Plan Contract Report - Monthly Summary Report (Data as of October 2006) Contract Summary as of October 2006: Number of Contracts MA Only Enrollees Drug Plan Enrollees Total Enrollees Total MAPD Contract 513 1,012,650 6,503,453 7,516,103 Local CCPs ,166 5,524,055 5,975,221 PFFS , , ,031 Demos 31 3, , , Cost , , , Cost (HCPP) 15 85,642 NA 85,642 PACE 36 NA 12,406 12,406 Regional PPOs 11 7, ,922 Total PDPs 91 NA NA 16,557,864 Employer/Union Only Direct Contract PDP 10 NA ,023 All Other PDP 81 NA 16,439,841 16,439,841 TOTAL 604 NA NA 24,073,967 Source: CMS Monthly Summary Report 13

14 Comparison (2007 vs. 2006) Change in Number of Contracts Change in MA Only Enrollment Change in Drug Plan Enrollment Change in Total Enrollment Total MAPD Contract , ,905 1,433,040 Local CCPs 41-14, , ,223 PFFS , , ,211 Demos 7-1,333 12,923 11, Cost -1-12,926 5,212-7, Cost (HCPP) -2-9,071 NA -9,071 PACE 2 NA 1,015 1,015 Regional PPOs 3 2, , ,738 Total PDPs 9 NA NA 621,879 Employer/Union Only Direct Contract PDP 0 NA 6,422 6,422 All Other PDP 9 NA 615, ,457 TOTAL 97 NA NA 2,054,919 14

15 Special Needs Plan Report as of October 2007 SNP Type Number of Contracts Number of Plans Sub Total Enrollment Chronic or Disabling Condition ,762 Dual-Eligible ,125 Institutional ,748 Totals ,050,635 Source: CMS Monthly Special Need Plan Comprehensive Report. 15

16 MA Plan Level SNPs (2007 vs. 2006) SNP Type Number of Plans Difference Chronic or Disabling Condition Dual-Eligible Institutional Totals Source: CMS Monthly Special Need Plan Comprehensive Report and 2006 SNP Fact Sheet & Data Summary. 16

17 Some Facts about SNPs in 2007 Number of Plans that Charge $0 Monthly Premium (Part C+D) ,248 plans Number of Plans that Offer Basic Benefits ,603 plans Number of Plans that Offer Enhanced Benefits ,222 plans Source: CMS 2008LandscapeSourceData_SNP_09_25_07.xls. 17

18 What Does the Future Hold? Future Product Designs More PFFS? More employer plans? Plan consolidation What is critical mass? Political fall out Congressional actions Regulatory fall out WellCare implications? Industry wide? 18

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