Insurer Retention of Stand-Alone Part D Plan Enrollees Switching to Medicare Advantage

Abstract

This cross-sectional study quantifies the extent to which Medicare beneficiaries who switched from stand-alone prescription drug plans to Medicare Advantage plans stayed with the same insurer.

Introduction

The stand-alone prescription drug plan (PDP) market in Part D of Medicare has become increasingly dominated by a few insurers with a significant presence in the Medicare Advantage (MA) market. In 2025, 78.4% of PDP enrollees were in plans offered by 5 insurers that, combined, accounted for 66.3% of MA enrollment nationally.¹ This has raised concerns about potentially distortionary incentives that insurers have to encourage their PDP enrollees to switch into plans in the more profitable MA sector. These incentives depend in part on how well insurers can retain switchers. We quantified the extent to which Medicare beneficiaries who switch from PDPs in traditional Medicare to MA plans that include prescription drug coverage (MA-PD plans) disproportionately enroll in MA-PD plans offered by the same insurer. Disproportionately high retention could be due to either plan or enrollee factors and would not necessarily signal a problem but would motivate deeper study.

Methods

This cross-sectional study was approved by the Harvard University IRB, with informed consent waived given the use of deidentified data. Reporting followed the STROBE reporting guideline.

We used Medicare enrollment data to identify beneficiaries enrolled in a PDP in December 2019 who switched into a non–employer-group MA-PD plan in January 2020. For each of 5 insurers with a significant presence in both the PDP and MA-PD markets nationally, we calculated the insurer’s rate of retention of these switchers in each county (the share of enrollees exiting the insurer’s PDP plans who enrolled in an MA-PD plan offered by the same insurer). We compared this observed rate to the retention rate that might be expected if the PDP insurer had no influence on MA-PD plan choice. We used 3 approaches to set this expectation for each insurer-county combination: (1) the insurer’s January 2020 share of MA enrollment in the county (excluding switchers); (2) the share of switchers from other insurers’ PDPs captured by the insurer; and (3) the share of switchers captured from insurers that had no MA enrollment in the county in January 2020. For each insurer, we limited analyses to counties where the insurer had at least a 5% share of MA enrollment in January 2020. We then calculated the mean of each insurer’s observed and expected retention rates across counties, weighting by the number of enrollees in the county who switched out of a PDP offered by the insurer. We restricted a sensitivity analysis to counties where an insurer had at least a 20% MA share to understand whether insurer heterogeneity in retention was due to differences in market share. We bootstrapped 95% CIs. Stata, version 19.0 (StataCorp LLC) was used for analyses. Data were analyzed between October 2024 and March 2026.

Results

The analysis included 445 603 switchers from PDP to MA-PD plans. Observed retention rates were substantially higher than expected rates for 4 of the 5 insurers and particularly higher for UnitedHealthCare (Table 1). Results were largely similar across alternative definitions of expected retention rates. UnitedHealthCare, for example, had a retention rate that exceeded expected rates by 21.7 (95% CI, 21.5-22.0) percentage points (pp) to 23.2 (95% CI, 23.0-23.5) pp. Insurer variation in the difference between observed and expected retention rates was similar in counties where insurers had more uniformly high MA shares (Table 2).

Table 1. MA Insurer Retention of Switchers From PDPs^a.

Insurer	Insurer’s share of enrollees in study counties, %		Rate of switching from insurer’s PDP plan to an MA plan, %	Observed retention rate, %b	Difference in observed vs expected retention rate, pp (95% CI)
	MA	PDP			Expected rate based on insurer capture of switchers from other insurersc	Expected rate based on insurer capture of switchers from other insurers with no MA presenced	Expected rate based on insurer MA share
UnitedHealthCare	31	21	4	53	23.2 (23.0-23.5)	22.5 (22.3-22.8)	21.7 (21.5-22.0)
Humana	28	19	6	41	15.8 (15.6-16.1)	12.6 (12.3-12.8)	13.3 (13.1-13.6)
CVS	18	25	4	20	4.3 (4.0-4.5)	2.6 (2.4-2.9)	1.3 (1.1-1.5)
Elevance	15	4	2	31	9.8 (8.3-11.3)	6.4 (5.0-7.9)	15.4 (13.9-16.9)
Centene	13	18	5	23	10.0 (9.6-10.4)	8.6 (8.2-9.0)	10.5 (10.1-10.9)

Abbreviations: MA, Medicare Advantage; MA-PD, MA including prescription drug coverage; PDP, stand-alone prescription drug plan; pp, percentage points.

^a For each insurer, statistics are gathered only from counties where the insurer had at least a 5% MA market share and an enrollee who switched out of PDP coverage into an MA plan. Insurers met these criteria in 11% to 75% of counties, depending on the insurer, and the analysis included 445 603 switchers.

^b The retention rate is defined as the share of enrollees switching from an insurer’s PDPs into MA who enrolled in an MA-PD plan offered by the same insurer.

^c The expected retention rate for this column is defined as the rate at which an insurer is able to attract enrollees who switch out of another insurer’s PDP coverage.

^d The expected retention rate for this column is defined as the rate at which an insurer is able to attract enrollees who switch out of another insurer’s PDP coverage, conditional on those enrollees’ original PDP insurer not having any MA presence in the enrollees’ counties.

Table 2. Insurer Retention of Switchers From PDPs, Limited to Counties Where Insurer Has ≥20% MA Market Share^a.

Insurer	Insurer’s share of enrollees in study counties, %		Rate of switching from insurer’s PDP to an MA plan, %	Observed retention rate, %b	Difference in observed vs expected retention rate, pp (95% CI)
	MA	PDP			Expected rate based on insurer capture of switchers from other insurersc	Expected rate based on insurer capture of switchers from other insurers with no MA presenced	Expected rate based on insurer MA share
UnitedHealthCare	38	21	4	60	25.0 (24.6 to 25.2)	24.3 (24.0 to 24.6)	21.5 (21.2 to 21.8)
Humana	39	20	6	48	16.9 (16.5 to 17.2)	12.5 (12.2 to 12.8)	9.5 (9.2 to 9.8)
CVS	34	24	4	29	5.3 (4.9 to 5.7)	2.6 (2.1 to 3.0)	−4.6 (−5.0 to −4.2)
Elevance	29	3	3	45	14.9 (11.4 to 18.0)	9.2 (5.8 to 12.3)	16.9 (13.7 to 20.2)
Centene	34	22	5	42	11.0 (9.7 to 12.2)	8.9 (7.6 to 10.1)	7.9 (6.6 to 9.1)

Abbreviations: MA, Medicare Advantage; MA-PD, MA including prescription drug coverage; PDP, stand-alone prescription drug plan; pp, percentage points.

^a For each insurer, statistics are gathered only from counties where the insurer had at least a 20% MA market share and an enrollee who switched out of PDP coverage into an MA plan. Insurers met these criteria in 3% to 49% of counties, depending on the insurer, and the analysis included 227 291 switchers.

^b The retention rate is defined as the share of enrollees switching from an insurer’s PDPs into MA who enrolled in an MA-PD plan offered by the same insurer.

^c The expected retention rate for this column is defined as the rate at which an insurer is able to attract enrollees who switch out of another insurer’s PDP coverage.

^d The expected retention rate for this column is defined as the rate at which an insurer is able to attract enrollees who switch out of another insurer’s PDP coverage, conditional on those enrollees’ original PDP insurer not having any MA presence in the enrollees’ counties.

Discussion

Among Medicare beneficiaries switching from stand-alone PDPs to MA-PD plans, insurers retained more enrollees than expected from their MA market share or the share of switchers they attracted from other insurers’ PDPs. The implications of this finding for the PDP market’s performance are unclear. The ability to retain switchers may encourage MA insurers to induce switching from PDPs to the more profitable MA market, perhaps by charging higher PDP premiums or lowering PDP quality. Moreover, the enhanced profitability of PDP enrollees for MA insurers (conferred by the prospect of retaining switchers) may motivate MA insurers to undercut other (non-MA) insurers in the PDP market, posing a barrier to entry and degrading competition. However, the same incentives may have upsides. To gain a strategic advantage from maintaining a presence in the PDP market and growing a pipeline of potential MA-PD enrollees, MA insurers must attract new PDP enrollees; undercutting the competition requires offering lower-cost or more generous PDPs. The prospect of retaining switchers may also encourage more MA insurers to participate in the PDP market, helping to stabilize competition in that market. The ability of large MA insurers to negotiate steeper price discounts from drug manufacturers amplifies this upside but also may stifle entry. More research is needed to understand the impact of firms with market power spanning the PDP and MA sectors on competition, plan quality, and beneficiary welfare.

Our study could not address potential confounders or isolate the mechanisms underlying insurers’ retention of switchers. Retention may partly reflect well-informed preferences of switchers (eg, to maintain access to a well-matched formulary). To the extent our findings suggest inertial enrollment decisions mediated by brand loyalty, perceived switching costs, individualized marketing, or captive brokers, they have implications for competition within MA, too, as weaker demand responsiveness to plan value tends to dampen insurer competition to provide value.^2,3,4

Supplement.

Data Sharing Statement