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The Medicare Advantage program allows for eligible beneficiaries to opt out of public Medicare plans offered by the government, and instead choose from a multitude of private insurance plan offerings. My goal is to analyze the competition within Medicare Advantage in counties surrounding New York City. In 2020, a new health insurance company, Oscar, decided to enter the MA market in the NYC area. I use Oscar’s entry as the main focus of my analysis. To understand the competition, I examine key features of plan design and prices of a number of large MA plans. I also analyze the change in plan offerings and enrollment levels after Oscar entered the market. My hypothesis is that Oscar entry led to lower prices and higher benefits. For Oscar to survive in the market, they must understand what factors contribute to growth in enrollment. Oscar must understand how to make themselves more attractive to eligible beneficiaries in order to absorb significant market share from the big players that are already well established. The information displayed is a result of preliminary exploration, as this is still the first term of my thesis. The data and summaries provided will be further analyzed to draw more significant conclusions that answer the questions of how plan designs impact enrollment and how the entry of new company plans into the market impact the design of existing plans.

There are some conclusions to draw from the information provided. MA enrollment grew significantly between 2019-2021. The big players in the market saw the largest increase in enrollment. Healthfirst Healthplan jumped from 45,000 enrollees to 55,000 enrollees and Aetna Life Insurance increased from 20,000 to 25,000. Many of the smaller players saw little increase, or even decrease in enrollment over the time period, making the market somewhat more concentrated. Oscar was able to obtain 2,083 enrollees which is higher than four other plans in the four counties where Oscar exists. There were also some conclusions to take from plan designs. Starting with premium, many plans offer a $0 premium, including Oscar, but some of the biggest players do charge a premium. Many deductibles were increased after Oscar entered the market, and Oscar chose to offer the highest available deductible of $445. Finally, many plans increased their out-of-pocket maximum from $6,700 to $7,500. Oscar chose to offer an OOP max that falls towards the middle of available plans at $6,700.

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Medicare Advantage, competition, enrollment, price, design

Medicare Advantage: Impact of Oscar Entry