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Mutual of Omaha announced a new partnership with Lumeris to create a new Medicare Advantage plan.
Under the agreement, Mutual of Omaha will own and carry the name of the new Medicare Advantage plans and provide brand, marketing and distribution expertise, as well as capital. Lumeris will work as a partner to evaluate markets, establish networks, align with providers and administer plans. An executive steering committee comprised of Mutual and Lumeris representatives will provide oversight and governance of the plans.
Enrollment in Medicare Advantage plans is skyrocketing, and Mutual of Omaha's senior vice president Amber Rinehart attributed much of this trend to the aging Baby Boomer population.
"They're more comfortable in general with Managed Care plans," Rinehart said. "There's also the ability with a Medicare Advantage plan to get additional benefits you don't get in regular Medicare. So there are some tailwinds."
According to the Kaiser Family Foundation, one in three people with Medicare is enrolled in a Medicare Advantage plan, and enrollment has grown 71 percent since 2010, now covering about 19 million beneficiaries. Current projections are that Medicare Advantage plans will grow to cover 41 percent of Medicare-eligible seniors by 2027.
"There are a lot of warm and fuzzy feelings around this target demographic," said Rinehart. "We see an opportunity to build a plan here that looks different than most other Medicare Advantage plans on the market."
Lumeris senior vice president Jeff Carroll said Medicare Advantage is growing faster than other models, and will continue to do so, because it's a proven model at its core.
"It's been tweaked by the government, but it's in a great place to deliver value," Carroll said. "So when we look at the national healthcare spend trajectory, Medicare Advantage is one of the only places in our healthcare universe where we see sustainably better outcomes for patients while driving down healthcare spend."
Mutual and Lumeris will offer a Medicare Advantage plan with prescription drug coverage in select markets beginning in 2019, with plans to expand nationally thereafter.