Reprinted with AIS Health permission from the 2/1/24 issue of Radar on Medicare Advantage

2024 Medicare Advantage Trends

For our annual series of outlook stories on the year ahead in Medicare Advantage, AIS Health, a division of MMIT, asked multiple experts what they view as MA organizations’ “keys to success” in 2024 and what critical investments will help them unlock their goals. Responses ranged from using artificial intelligence and other digital tools to improve the member experience to strategically striking value-based agreements with providers. 

“If health plans don’t do a good job of educating or empowering the members with information, then the member effort increases, which frequently leads to member churn,” observes Srikanth Lakshminarayanan, senior vice president of the Center of Excellence for Healthcare Engagement Services at Sagility, a tech-enabled business process firm that supports payers and providers. “With MA membership increasing literally day by day, it’s important for health plans to make a conscious effort at doing a good job on member onboarding and retention. People who come out of their commercial plan into a Medicare plan need handholding of a different kind. They often need to know how Medicare works, what’s the supplemental spend, etc.”

By one estimate, a plan with 75,000 members and 14% churn will lose nearly half a billion dollars in revenue and $71 million in projected gross profit, he adds. And research indicates that close to 20% of MA members leave during the first year of enrollment with a plan and 50% change plans within five years.

Meanwhile, the use of online tools to support their Medicare decision making during the AEP is on the rise. According to a McKinsey and Co. survey, 29% of respondents reported visiting health insurers’ websites during the 2022 AEP and 26% said they used CMS’s Medicare Plan Finder, compared with 14% and 19% in the 2020 AEP. 

“Digital onboarding is an area where most investments are happening — new member packets using self-serve options, which ensures seamless onboarding — has really taken off, which helps with member experience and thereby member churn. All omnichannel services from text to invisible apps have seen a 15-to-20%-point increase in adoption rates,” observes Lakshminarayanan.

“Another significant advancement is the use of generative AI to provide an opportunity to better explain coverage and benefits. To an earlier point, if 29% of members don’t understand the benefits, sometimes they don’t know what to ask. This is where generative AI can help make it easy for members to understand their coverage. While this capability is new and very few health plans have been able to fully adopt this functionality, this will be a game changer in technology that will improve member experience by reducing their effort and improving their knowledge of their plan.”


Darren Ghanayem, a managing director at global management and technology consulting firm AArete, agrees that plans should invest in the digital experience they’re providing members. “Medicare Advantage members are increasingly tech savvy and want an easy, positive, engaging experience — both online and via mobile,” he tells AIS Health. “Other critical technology investments will include improving administrative functions — to automate manual processes and enhance data governance to flag or auto-correct corrupted data.”

Beyond digital investments, “[t]ightening up administrative costs will be a key to success,” says Ghanayem. “Now is the time for Medicare Advantage plans to optimize their processing and administration because lowering administrative costs will allow more revenue to be invested in member benefits. This can compound into a better member experience and a higher Stars score for future revenue.”

Additionally, MA plans “should focus on data quality and accuracy because data fuels quality programs and allows plans to make more informed decisions on where to focus. Without quality data, the plans may not focus on the right actions,” he says. “Plans should also scrutinize their prior authorization model of care to ensure it’s really creating the effective outcome for which it was designed.”

“With some evidence that enrollment in $0 premium plans has plateaued, perhaps some plans in some markets will pivot to focus more on enrollees that are more discerning than on affordability metrics alone,” weighs in Tricia Beckmann, a principal with Faegre Drinker Consulting. Additionally, “[k]nowing membership clinically and what is needed to succeed in the revamped Star Ratings program, from provider partnerships, product design, to care management programs” will be critical. “At the same time, it seems diabetes care is an important area to invest for any plan given the correlation among several diabetes care-related Star measures that has been studied.”

“Given the competitive trend of health plan consolidation, nationals’ market position and performance and over-arching pressure on payment rates (e.g., rate deceleration, impacts of the Inflation Reduction Act (IRA), Star measure complexity/rule changes, risk adjustment model changes), HealthScape Advisors Principal Cary Badger Managing Director Alexis Seedy Levy suggest the following winning strategies for regional plans:

  • Leverage their local presence through more strategic provider partnerships and community-based relationships.
  • Focus on “flanking strategies” (i.e., growth strategies through markets that are adjacent to the traditional, “core” Medicare Advantage Prescription Drug segment and may represent alternative paths for growth that are potentially less competitive than the current MA-PD market). These strategies could drive growth in less competitive MA submarkets and provide other growth advantages (e.g., age-in population). Examples could include plans for military retirees or Special Needs Plans (e.g., chronic condition SNP, institutional SNP).
  • Focus on sustainable financial performance levers in revenue (e.g., Stars and risk adjustment) and cost of care management.
  • Manage operational and member acquisition costs at competitive levels.
  • Identify other administrative/operational efficiencies to help narrow the gap between smaller plans and larger insurers that can operate at scale.

As plans pursue the D-SNP space, they must consider integration of Medicare and Medicaid provider contracting strategies that ensure continuity of care, add Badger and Seeder Levy. “Health plans are now looking to leverage value-based contracting with strategic providers that look at the member’s whole care continuum and total cost of care, which leverage coverage across Medicare and Medicaid to optimize the benefit dollar,” they tell AIS Health. “This is a major shift from managing patients within a specific contract for coverage independently, creating potential gaps in care and cost management. This is also a result of regulatory trends to move D-SNP to an integrated contract with state and federal agencies, combined with the unique opportunity for D-SNP growth within the individual marketplace.”

“D-SNP continues to be a focus for plans looking to grow. The nationals have largely signaled this is their intent,” weighs in John Selby, senior vice president for strategy, sales and marketing with Rebellis Group. The impact of the IRA, which will require plans to manage an increasing share of responsibility for catastrophic drug costs, “may limit how much plans can continue to invest in supplemental benefits, however. A ‘good’ 2025 bid may mean not having to reduce supp benefits.”


When asked what other trends may continue to gain traction in MA, Selby points to plan/provider integration through partnerships or acquisitions. “Often these are more involved than value-based arrangements and may include co-branding, marketing [and] the use of data to maximize their potential,” he says.

“I think the advent of value-based contracting and risk sharing models in a larger way with providers is only going to increase in ’24 and ’25,” concurs Steve Arbaugh, managing principal and CEO with ATTAC Consulting Group. “One of the things that you’re seeing through some of the majors, is you’ll see them begin to focus on vertical integration — they’re buying up primary care practices, other delivery parts of the delivery system, so on and so forth. So they’re becoming more like provider-sponsored plans, but they are working to control their underlying cost structures in critical markets in a very different way, other than…just paying somebody trying to put in utilization management tools. I think that’s a trend that will continue as we move forward in the next couple of years.”

“Value-based care will continue to be a challenge, but it’s essential to keep working this relationship to ensure mutual benefit for providers, payers and members,” adds Ghanayem.