Once a year, Medicare beneficiaries have the opportunity to renew their coverage or make changes to their Medicare enrollment. That can mean choosing to enroll in Medicare Advantage (MA), selecting a new MA plan, or opting for a different benefit package. This Annual Election Period is now in full swing—running from October 15th through December 7th. This year, in many locations, beneficiaries may have several new options to choose from, as existing MA plans are expanding their footprints to serve more states and counties. Plan choice will increase nearly 20% in 2019 according to the Centers for Medicare and Medicaid Services (CMS). Now, more than 91% of Medicare beneficiaries will have access to 10 or more MA plans compared to 86% in 2018.
All the major players—UnitedHealth Group, Humana, Anthem, and Aetna—are reporting significant expansions for 2019. Small startup plans like Bright Health and Devoted Health are also entering the MA market in regions across the country. These startups are backed by millions in venture capital funding and are planning to compete with established payers by promoting new health plan solutions.
When considering these new developments, there are a few frequently asked questions that healthcare and social services stakeholders may have. We’ve sought to answer some of those questions here.
What brought about all of the expansion?
Medicare analysts point to changing demographics, as more than 10,000 baby boomers are aging into the Medicare population every day. With this growth in eligible beneficiaries, the MA market penetration rate is surging as well. Today, MA plan enrollment represents 35% of the total Medicare population: about 20 million beneficiaries. Experts predict that MA enrollment will skyrocket over the next few years and represent 50% of enrollees (38 million beneficiaries) by 2025. As such, many established payers are experiencing billion-dollar profits and looking to grab as much of the new market as possible.
How do MA plans set themselves apart?
Health plans contract with CMS and receive a fixed rate per enrollee to manage the required benefits and services that must be offered to all beneficiaries. To entice beneficiaries, MA plans can offer extra benefits. These benefits have been limited to services and supports that are “primarily health-related”—in other words, a service or item that is intended to prevent, cure, or diminish an illness or injury. To date, MA plans have included extra benefits such as disease management programs, nurse help hotlines, and vision, dental, and wellness coverage.
CMS’ April 2018 Medicare 2019 Rate Announcement and Call Letter establishes a new definition that expands these offerings to include items or services that also “compensate for physical impairments; act to ameliorate the functional/psychosocial impact of injuries or health conditions; or reduce avoidable emergency and healthcare utilization.” The intent being to enable MA plans to provide beneficiaries with supplemental benefits that “increase health and improve quality of life.” Services that compensate for physical impairments might include transportation, cooking, or cleaning. Services that reduce healthcare utilization might include more intensive home-based support to keep Medicare Advantage enrollees in their homes and out of nursing facilities.
In 2020, as a result of the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act of 2018, the list of possible benefits could expand even further. Incorporated into the 2018 budget by Congress, the CHRONIC Act is intended to help people manage conditions like heart failure and diabetes through targeted supplemental benefits, in part by authorizing telehealth programs. It, too, will work through MA.
Why would for-profit health plans choose to expand coverage when paying a fixed enrollee fee?
These health plans are choosing to expand coverage because research indicates that health behaviors such as smoking, diet, and exercise are the most important determinants of premature death. There is a growing recognition that the social determinants of health (SDOH)—social and economic factors or the conditions in which people live, work, and play—shape individuals’ ability to engage in healthy behaviors. These SDOH have been shown to affect 80% of health care outcomes. A recent study of a health plan SDOH program demonstrated that addressing these factors not only improves health outcomes, but also has the ability to reduce the cost of medical care. With greater flexibility to expand existing coverage to address SDOH, MA plans will be better positioned to pursue value-based care and population health strategies as required by contracts.
Why is this important to my business?
There is growing recognition by payers of all types (commercial, Medicare, and Medicaid) of the important role that social determinants play in health. And as more payers work to integrate SDOH data and initiatives into their population health programs, community-based providers have a unique opportunity to participate in and promote these efforts. Their experience and local knowledge are critical for payers who are attempting to understand the unique attributes of the community and the needs of the population being served. The staff and resources of community-based providers will be critical to payers as they are working to ensure an effective and coordinated delivery of these services and supports.
Due to the short runway to assess their memberships and identify appropriate service expansions, MA plan 2019 supplemental benefit offerings will be limited. However, by 2020 plans will be prepared to adopt more expansive supplemental benefits to compete in the expanding marketplace. Given MA plan bids are due to CMS in less than a year, it is critical that providers quickly assess their ability to partner with MA plans and prepare proposals for plans in their region.
With our extensive experience in healthcare and social services, Atròmitos is prepared to assist providers and MA plans in conducting market assessments and developing targeted evidence-based proposals for initiatives that are compliant with federal guidance and will meet the collective goals of all stakeholders. Get in contact with us today to see how we can partner to create bold solutions for the future.