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FACT SHEET: Insurance Companies are Making Billions in Profits on Medicare Advantage

By February 28, 2023No Comments

While They Air Television Ads Falsely Scaring Seniors They Are Bragging to Wall Street About Their Profits

The insurance industry and their Republican supporters in Congress are trying to scare seniors into believing the Biden administration is cutting Medicare. Insurance companies claims that they will have to cut benefits or increase premiums for seniors are just plain false. In fact, the Biden administration is proposing to increase spending on Medicare Advantage by $4 billion. And despite their dire advertising, the insurance companies have been busy telling Wall Street they expect Medicare Advantage to drive serious growth for their businesses.

Following Medicare’s Advance Notice payment update and during the industry’s multi-million dollar false advertising campaign, Humana announced they are doubling down on the Medicare Advantage business and only offering government-backed coverage. Humana announced in February 2023 that it will stop providing employer-sponsored commercial coverage as it focuses on bigger parts of its business, like Medicare Advantage. CEO Bruce Broussard said that the exit from employer-sponsored coverage lets Humana focus on its “greatest opportunities for growth.” After the announcement, shares of Humana Inc. climbed more than $4 to $507.91 Thursday.

Earlier in February, Humana shared with investors that they expect Medicare Advantage to drive their expected growth. In a Q4 2022 earnings call, Humana CFO Susan Diamond announced, “Our 2023 outlook reflects top-line growth above 11%, with consolidated revenues projected to be north of $103 billion…driven by growth in…Medicare Advantage.” 

UnitedHealthcare cites growth that is also driven by Medicare Advantage. In a Q4 2022 earnings call, UnitedHealthcare CFO John Rex announced, “Our strong 2023 Medicare Advantage member outlook is consistent with…serv[ing] up to 900,000 more people in ’23 across our individual, group, and dual special needs offerings, our 8th consecutive year of above-market growth.” 

In 2022, UnitedHealthcare showed double-digit revenue increases driven by Medicare Advantage. Their first quarter filing cited revenue growth of 14% in UnitedHealthcare and 19% in Optum. “The increases in revenues were primarily driven by growth in the number of people served through Medicare Advantage…”

We’ve heard these unfounded complaints from the industry before, and experts debunk them.
Mark Miller, who directed MedPAC for over 15 years, states: “This notion and threat thrown about from plans — ‘Touch one of my dollars, and all benefits will disappear’ — based on history and experience, that’s nonsense.” David Meyers, Assistant Professor of Health Services, Policy, and Practice at the Brown University School of Public Health, states: “I’m not really convinced we will see much movement in benefits or premiums with these proposed rules. Supp benefits are a huge marketing tool for plans and they won’t want to get rid of benefits benes like.”