Medicare Advantage Expanded Supplemental Benefits Over the Years

Question 1

Introduction

Answer 1

1. 2020 MA enrollment = 24 million people (1/3 of all Medicare enrollees)
2. 2019 - Expanded s cope of health related supplemental benefits (CMS announcement in April 2018)
   - More flexibility in designing MA plans, allowing insurers to offer additional benefits
   - Goal - enhance beneficiaries’ quality of life and improve health outcomes
3. Estimated 3 million people would benefit from additional benefits among Plan Benefit Package (PBP) categories
   - Article focuses on PBP category 13 (specifically 13d-13f)
   - No consideration for premiums, plan star ratings, or benefits under other PBP categories in this article

Question 2

Background: Benefit Reinterpretation and Summary of Changes 2019/2020

Answer 2

1. “Primarily health related” supplemental benefits - CMS changed their interpretation of these benefits so that research demostrated that value of an item or service can diminish impact of injuries or health conditions and reduce avoidable emergency and health care utilization
2. MA plan can provide new supplemental benefits if:
   - Medically appropriate health care benefit
   - Recommended by a licensed provider
   - Not for sole purpose of inducing enrollment
3. Insurers quickly added a variety of benefits for 2019 plan year
   - “Other” benefits increased 3x compared to 2018 plan year
   - 20 new (expanded benefits) (e.g. community support & outreach, medical stockings/sleeves, mental health counselors, surgical boots, home infusion, activity trackers, convenience care)
   - 2019 - counties in 44 states offered expanded benefits
   - 2020 - counties in 33 states offered expanded benefits
   - Comparing 2018 to 2020, growth of “other” benefits was only 39%
   - 2019 - plans average 1.1 supplemental benefits added, but in 2020, number of participating insurers decreased
   (1) 50% decline in plans with expanded benefits from 2019-2020
   (2) Number of beneficiaries with access to plans with expanded benefits also decreased
   - Insurer participation - seemed to be main driver of whether expanded benefits also decreased
   (1) Driver was not competition between insurers regarding benefit types
   (2) Areas with higher insurer participation more likely to offer expanded benefits
   (3) Urban areas more likely to have expanded benefits than rural areas
   - Inverse relationship frequently found when comparing average expanded benefit by county to parent organizations offering expanded benefits
   - Insurers operated on different bases state-by-state with their expanded benefit offerings

Question 3

Expansion of All “Other” Benefits and Expanded Benefits in 2021

Answer 3

1. Total number of aggregated insurers increased (to 14) but plans offering expanded benefits decreased slightly
2. 20% of plans offered COVID-19 related benefits (e.g. face masks, personal protective equipment (PPE))
3. Benefits categories with positive growth (apart from COVID benefits)
   - Preventive (wellness programs, activity trackers, etc) - up 40%
   - Compensate/Ameliorate (equipment and services) - up 312% - usually compression garments (socks/sleeves) and prosthetics or medical supplies not covered by Medicare
4. Home Infusion Therapy (HIT) - the only 1 of the 20 new expanded benefits that endured in both 2020 and 2021
   - Beneciaries have option of receiving critical treatments at home instead of hospital (e.g. chemotherapy)
5. Medicare community resource support and outreach - showed significant growth in plan availability in 2021
   - Provides additional help from designated team to inform and educate beneficiaries about community based services and support programs
6. Membership in plans with the highest number of benefits experienced the most significant growth rates through 2020
7. Overall member months in plans with any expanded benefit declined by nearly 60%
8. 2021 - unsure if trend of number of states offering expanded benefits decreasing will continue
   - Period of Trial and Error
9. Expanded benefits less likely driven by competition and more likely driven by presence of insurer participation
10. Most states experienced decline in member growth from 2019-2020 for those offering expanded benefits
    - 10 states made up majority of enrollment
    - Califonia was one of six states with a rebound in enrollment
11. Insurers with plans in 2018 that added expanded benefits in 2019 saw major declines in enrollment (by half or more)
12. Uncertainty about enrollment changes for plans with expanded benefits - could be due to improved benefit mixes, benefit types or other area factors
13. Key drivers in selection of expanded benefits
    - Combination of utilization, economies of scale and net expenditures
    - Driver for beneficiary - maximum variety of benefit availability

Question 4

Financial Considerations for Insurers in 2021

Answer 4

1. Goal of expansion of benefits - enhance beneficiaries’ quality of life and improve health outcomes
   - Goal of insurers - retain strong finances to survive in the industry
2. Net costs - result of variety of sources, including rebates and claims
3. 2020 - average rebate of $122 PMPM for MA plans for cost-sharing reduction or supplemental benefit spending (up 14% from 2019)
   - $22 PMPM of these are for Part A and B supplemental benefits
   - As this trend goes up, it allows for more spending on supplemental benefits
4. 2021 - CMS amended MA Medical Loss Ratio (MLR) regulations
   - Medicare Advantage Organizations (MAOs) - can include all amounts paid for covered services, including supplemental benefits in the MLR calculation (this helps insurers justify spending)
5. Home infusion services benefit
   - 2019-2020 was a transitional benefit, but became permanent in 2021

Question 5

Potential Changes Beyond 2021

Answer 5

1. COVID-19 - influx of plans with “other” related benefits, such as masks and PPE
   - CMS termporarily encouraging MAOs to waive or reduce cost sharing for benefits and services related to COVID-19
   - Caveat - limit on cost sharing for COVID testing, testing services and vaccines only apply during public emergency period
2. Congressional changes could have impact on specific benefits, benefit mixes or cost-effectiveness
   - Medicare Payment Advisory (MedPAC) meeting - Oct 2020 - discussed adjusting rebate percentages, or a new payment model to calculate MA payments. This would affect benchmarks by blending local and national spending and improve lower income beneficiaries’ access and value to supplemental benefits

Question 6

What Should Your Organization Do?

Answer 6

1. Ongoing updates to benefit types being added and removed will occur annually
2. 2022 and beyond - uncertainty on utilization, health outcomes, and cost-effectiveness of expanded benefits
3. Beneficiary demands shows larger benefit mix is preferred, but mroe data needed (overall decrease in plans offering expanded benefits in 2020)
4. Insurers likely wil do their own research as more time passes
   - See how enrollment responds to expanded benefits
5. Remains to be seen if more carriers offer expanded benefits in hopes of increased enrollment (though these should not be offered for sole purposes of inducing enrollment)
6. Must determine if enrollment increases are the cause or the effect of the benefit inclusion and whether other factors are influencing consumer behavior
   - Other factors could be premium changes, benefit changes in other PBP categories, prescription formulary
7. Rebate increases - will help finance expanding mix of supplemental benefits
8. New MLR calculations - will have lasting effects on three-year rolling average costs (benchmarks)
9. Changes in typical industry areas - economies of scale, competition, technology, and diagnoses will all have their own impacts
10. Insurers need to be vigilant in reviewing all data as it becomes available to ensure success for their companies and the beneficiaries