Medicare Advantage Outlook: Industry Positioned For Growth; $1T+ by 2031

On November 18th, Josh Raskin and team rolled out their annual Medicare Advantage outlook piece and followed up with a conference call for clients.  For the first time in many years, there appears to be some trepidation around the future of Medicare Advantage. These worries seem centered on the short-term impacts from the new Administration, especially around rate updates and risk coding. The report goes through the mitigating factors and specifically the record level of “benefit cushion” that MA plans hold over the traditional FFS program.

Nephron sees MA is the most important and most dynamic segment of health insurance, with MA importance resonating well beyond just the simple insurance offering.  In the note Josh and team address:

  • Impact on overall payor growth rates
  • Opportunities for ancillary service implementations
  • The significant opportunity for the physician enablement sector
  • Overall sector thoughts

Despite tempering our estimates since last year, we estimate that the MA industry will add $269 billion in annual revenues from 2018-2023 (a 5-year CAGR of 16.6%). By 2031, we estimate the MA industry will be a $1.0 trillion opportunity.

Also in the note, Josh and team explain how they get to their MA industry revenue growth estimate of 17.5% in 2021 and 18.7% in 2022.  Its worth noting that this the highest level of revenue growth since 2006 when the drug benefit was added. All in, Nephron is projecting a 10 year CAGR in MA revenues of 10.6%.

For more information on Nephron Research and Josh’s Medicare Advantage work, email