OMAHA, Nebraska | September 19, 2011

By Doug Feekin, ASA, MAA – Principal and
Consulting Actuary for CSG Actuarial

On Wednesday of last week, the CMS released 2012 Medicare
Advantage (MA) plan data revealing 12,317 new plan/county
combinations and the non-renewal of more than 8,311 plan/county combinations for 2012.

Surprisingly, the number of existing MA members impacted by these 2012 plan/county non-renewals is down 86% from the previous year (see By The Numbers). Some possible reasons for this significant decline include:

1. Large amount of Private Fee-For-Service (PFFS) terminations in 2011 due to PFFS network requirement changes.
2. Stabilization of MA premiums due to:

a. Recession is driving down Medicare utilization. The new S&P Healthcare Economic Medicare Index1 (published 9/15/2011) indicates a slowing medical service growth rate among seniors.
b. Average age of seniors in Medicare is decreasing in 2012. Influx of first wave of baby boomers is lowering the average age for those 65+ in 2012 when compared to 2011. A younger overall group means less claims and lower premiums.

By the Numbers2

Plan Year Total Plans New Plans Non-Renew Plans Insureds Impacted by Non-Renew Plans % Change Insureds
2012 43,458 12,317 8,311 288,742 -86%
2011 39,514 10,575 41,263 2,046,782 51%
2010 71,412 24,971 57,075 1,359,257

Opportunity Knocks
Despite the decline in non-renewals, there is still opportunity. If all 288,742 members with non-renewing plans rolled into Med Supp plans for 2012, it would turn into about $500 million of new annualized premium to be written between now and the end of the year. CSG Actuarial can help.

We just rolled out some new online competitive intelligence tools, which enable producers to identify MA prospect details down to the county level—including premiums, drug deductibles, maximum out-of-pocket expenses, and coverage in the gap. We have 2012 data in its entirety including new, total, and disenrollee counts.

Call us at 855-861-8776 for more details about ad hoc reporting or click HERE to purchase the Premium Plan and have access to all CMS data.

Sources
1 S&P Indices, US Healthcare Cost Trends Are Mixed According to the S&P Healthcare Economic Indices, http://bit.ly/otBxl3
2 Data reflect Medicare Advantage plans (data do not include SNP or PDP standalone)