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
Demand for Medicare Medicare Beneficiaries - Examples 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Florida Texas Georgia Tennessee North Carolina Source: CMS s January 2006 MA & PDP: State by State Summary Table 2
MA Penetration by County 2007 3
California 4
Florida 5
Georgia 6
South Carolina 7
New York 8
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. 1,268,541 125,938 1,394,479 Humana Inc. 1,093,070 46,303 1,139,373 Kaiser Permanente 841,266 41,181 882,447 WellPoint, Inc. 253,147 113,052 366,199 Coventry Health Care Inc. 156,423 128,009 284,432 Health Net, Inc. 206,985 28,187 235,172 Highmark Inc. 223,129 9,266 232,395 Aetna Inc. 147,671 41,968 189,639 Blue Cross Blue Shield of Michigan 179,071 7,050 186,121 Independence Blue Cross 118,044 44,779 162,823 WellCare Health Plans, Inc. 107,236 51,350 158,586 HIP, Health Plan of New York 124,984 3,131 128,115 NewQuest Health Solutions LLC 119,988 6,657 126,645 Aveta, LLC. 119,740 578 120,318 SCAN Health Plan, Inc. 100,806 910 101,716 Universal Health Care Inc. 94,564 0 94,564 Total Other 2,299,672 732,871 3,032,543 Grand Total 7,454,337 1,381,230 8,835,567 Source: CMS monthly report by contract_oct2007_10022007.xls. 9
Medicare PDPs by Total Enrollment in Parent Organization Parent Organization Enrollment as of Sept. 2007 Enrollment as of Sept. 2006 Change in Enrollment UnitedHealth Group 4,696,544 4,488,574 207,970 Humana Inc. 3,696,544 3,471,864 224,680 WellPoint, Inc. 1,214,976 538,421 676,555 Member Health, Inc. 1,166,729 976,892 189,837 WellCare Health Plans, Inc. 971,663 910,930 60,733 Coventry Health Care, Inc. 717,721 689,512 28,209 Universal American Financial Corp. 471,443 445,312 26,131 CVS-Caremark, Inc. 361,460 415,415-53,955 Health Net, Inc. 348,637 290,202 58,435 Wellmark, Inc. 342,202 336,924 5,278 Health Care Service Corp. 320,771 309,330 11,441 Medco Health Solutions, Inc. 317,537 415,406-97,869 Aetna, Inc. 307,508 309,818-2,310 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.17,2007. 10
Number of MA Contracts by State - 2007 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
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 408 436,379 5,859,657 6,296,444 PFFS 47 696,898 996,344 1,693,242 Demos 38 1,832 215,065 216,897 1876 Cost 27 146,394 163,466 309,860 1833 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 13 113,050 NA 113,050 Regional PPOs 14 10,255 206,405 216,660 Total PDPs 100 NA NA 17,179,743 Employer/Union Only Direct Contract PDP 10 NA 124,445 124,445 All Other PDP 90 NA 17,055,298 17,055,298 TOTAL 701 NA NA 26,128,886 Source: CMS Monthly Summary Report 12
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 367 451,166 5,524,055 5,975,221 PFFS 25 306,032 519,999 826,031 Demos 31 3,165 202,142 205,307 1876 Cost 28 159,320 158,254 317,574 1833 Cost (HCPP) 15 85,642 NA 85,642 PACE 36 NA 12,406 12,406 Regional PPOs 11 7,325 86597 93,922 Total PDPs 91 NA NA 16,557,864 Employer/Union Only Direct Contract PDP 10 NA 118023 118,023 All Other PDP 81 NA 16,439,841 16,439,841 TOTAL 604 NA NA 24,073,967 Source: CMS Monthly Summary Report 13
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 88 481,727 950,905 1,433,040 Local CCPs 41-14,787 335,602 321,223 PFFS 22 390,866 476,345 867,211 Demos 7-1,333 12,923 11,590 1876 Cost -1-12,926 5,212-7,714 1833 Cost (HCPP) -2-9,071 NA -9,071 PACE 2 NA 1,015 1,015 Regional PPOs 3 2,930 119,808 122,738 Total PDPs 9 NA NA 621,879 Employer/Union Only Direct Contract PDP 0 NA 6,422 6,422 All Other PDP 9 NA 615,457 615,457 TOTAL 97 NA NA 2,054,919 14
Special Needs Plan Report as of October 2007 SNP Type Number of Contracts Number of Plans Sub Total Enrollment Chronic or Disabling Condition 43 73 168,762 Dual-Eligible 204 320 737,125 Institutional 65 84 144,748 Totals 312 477 1,050,635 Source: CMS Monthly Special Need Plan Comprehensive Report. 15
MA Plan Level SNPs (2007 vs. 2006) SNP Type Number of Plans 2007 2006 Difference Chronic or Disabling Condition 73 13 60 Dual-Eligible 320 226 94 Institutional 84 37 47 Totals 477 276 201 Source: CMS Monthly Special Need Plan Comprehensive Report and 2006 SNP Fact Sheet & Data Summary. 16
Some Facts about SNPs in 2007 Number of Plans that Charge $0 Monthly Premium (Part C+D) ------4,248 plans Number of Plans that Offer Basic Benefits ------5,603 plans Number of Plans that Offer Enhanced Benefits ------10,222 plans Source: CMS 2008LandscapeSourceData_SNP_09_25_07.xls. 17
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