Most Medicare Advantage Markets are Dominated by One or Two Insurers

Enrollment in Medicare Advantage, the private plan alternative to traditional Medicare, has increased steadily since 2010. The average beneficiary has access to 34 Medicare Advantage plans with prescription drug coverage in 2025, double the number available in 2018. On average, Medicare beneficiaries have access to plans offered by 8 firms, a slight increase from 2018.

One goal of offering Medicare coverage through private plans is to leverage competition with the idea that insurers will compete to provide better benefits and lower costs to attract and retain enrollees. However, recent analysis finds that Medicare Advantage markets are highly concentrated, suggesting that the growth in enrollment and plan availability has not occurred in the context of a competitive market.

Higher market concentration in Medicare Advantage insurance markets may lower the incentive for insurers to compete for potential enrollees by making plans more appealing through more comprehensive benefits or lower costs. However, the competitiveness, or lack thereof, of Medicare Advantage markets has not been a priority of policymakers or regulators, especially in recent years. The most recent activity at the federal level occurred in 2017 when the Department of Justice blocked a merger between insurers Aetna and Humana, arguing if it went through it would significantly raise market concentration in the Medicare Advantage market. More recently, the conversation regarding competition in health care has revolved around increased consolidation in provider markets, especially hospitals and health systems.

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Zhu, N., et al. (2025, August 9). Most Medicare Advantage Markets are Dominated by One or Two Insurers. KFF. https://www.kff.org/medicare/most-medicare-advantage-markets-are-dominated-by-one-or-two-insurers/