As part of new actions to lower health care and prescription drug costs by promoting competition, the Biden administration on Dec. 7 said it aims to further improve Medicare Advantage transparency. Noting that the MA program now serves roughly half of Medicare-eligible beneficiaries, the Biden administration in a fact sheet said it is committed to ensuring that MA plans “best meet the needs of people with Medicare, there is timely access to care, and the market has healthy competition.” Therefore, early next year HHS will solicit from the public “programmatic data” to better understand “the effects of market shifts on consumers and care outcomes.” When asked during a Dec. 6 press call for more details on this effort, a senior administration official responded: “We’ll be seeking additional information that will allow the agency to explore new policies and learn more about this really important program for seniors and people with disabilities.” Additionally, the administration said it will build on recent steps “[c]racking down on anticompetitive and anti-consumer practices” in MA and continue to implement updates to MA payment “that improve payment accuracy, address gaming, and recover overpayments.”
Insurers are more carefully tailoring their preventive supplemental benefit offerings to support Medicare Advantage enrollees aging in place, with benefits such as home and bathroom safety modifications more than doubling between 2023 and 2024, according to a new Faegre Drinker analysis of Plan Benefit Package (PBP) data. But as CMS takes steps to gather more data on supplemental benefits, less impactful benefits could be thinned from the pack while those with greater potential to improve health outcomes are embraced by insurers.
Faegre Drinker has been tracking the growth of expanded supplemental benefits since 2020, when MA insurers were in the early days of experimenting with new offerings under CMS’s reinterpretation of “primarily health related” supplemental benefits and first began offering Special Supplemental Benefits for the Chronically Ill (SSBCI). The consulting firm's latest analysis, published on Dec. 5 and shared in advance with AIS Health, focuses on the preventive supplemental benefit market due to the large variance in uptake, with some benefits offered by fewer than 100 plans and others featured in more than 5,000 PBPs. This year, Faegre Drinker split the categories into two types: popular (i.e., offered by more than 1,000 plans) and less popular (i.e., those offered by fewer than 1,000 plans).
Only 42% of Medicare Advantage Prescription Drug (MA-PD) contracts that will be offered in 2024 achieved an overall rating of 4 stars or higher, compared with approximately 51% of contracts in 2023, according to the latest Medicare Part C and Part D Star Ratings data. Weighted by enrollment, the average MA-PD Star Rating fell from 4.14 for 2023 to 4.04, with approximately 74% of MA-PD enrollees estimated to be enrolled in contracts that achieved 4 or more stars for 2024, compared with 72% for 2023, CMS reported on Oct. 13.
Those changes were largely expected due to the application of the new Tukey outlier deletion methodology, which was used in determining the cut points for measures not directly related to member experience and largely achieved CMS’s stated goal of infusing more “predictability and stability” into the Star Ratings.
UnitedHealth Group on Oct. 13 said overall revenues for the third quarter of 2023 climbed 14% from a year ago to $92.4 billion, reflecting double-digit growth at both its Optum and UnitedHealthcare divisions. The company also recorded a medical loss ratio of 82.3%, which was higher (worse) than the 81.6% reported for the third quarter of 2022. UnitedHealth said that was largely due to the previously disclosed uptick in inpatient care, primarily among seniors, and business mix. Revenues for the UnitedHealthcare insurance segment rose 13% from a year ago to $69.9 billion, reflecting growth in the number of people served. The company estimated it will have added nearly 1 million Medicare Advantage customers by the end of the year. The company raised its 2023 adjusted earnings per share outlook to a range of $24.85 to $25, from a previous range of $23.60 to $23.75 per share.
With the Oct. 1 start of marketing for the 2024 Annual Election Period (AEP), several major publicly traded insurers have unveiled somewhat slower plans for geographic expansion than in previous years, while CMS’s 2024 MA and Part D landscape files suggest that premium increases were a common way to offset potential rate cuts. But according to recent press releases unveiling product enhancements for next year, insurers appear to be extending enhanced supplemental benefits to the broader MA population while offering Dual Eligible Special Needs Plan (D-SNP) beneficiaries greater flexibility to address nonmedical needs.
As the 2024 Annual Election Period approaches, Medicare Advantage insurers that began marketing on Oct. 1 have been touting service area expansions and/or the robust provider networks attached to their plans. But in the months and, in some cases, days leading up to the Oct. 15 start of open enrollment, some high-profile contract negotiations have played out in a very public way, with providers expressing their frustration with administrative delays, care denials and less-than-adequate rates. And the loss of key providers could have serious consequences from a network adequacy standpoint, even leading to an enrollment freeze if MA organizations are not careful, warns one compliance expert.
On top of concerns about overly burdensome prior authorization policies used by MA organizations, “providers are getting squeezed” from both sides, remarks Jane Scott, executive vice president of special projects for Rebellis Group. “Providers are getting squeezed on the fee-for-service, CMS side for their reduction in fee reimbursement. And then the health plans also want to reduce reimbursement for savings on their own part, while trying to stay competitive. And in doing that, they may have to reduce their service area size, their network offering, different things…and so that causes some market change.”
Trends emerging from early analyses of CMS’s 2024 Medicare Advantage and Part D “landscape files” include a lower concentration of $0 premium plans, increases in monthly premiums by some of the biggest insurers, and less aggressive but continued expansions into new service areas. But industry observers caution against reading too much into the data, given the nuances of benefit design that are not detectable from the landscape files. That said, it’s clear the major publicly traded insurers made a few tradeoffs in order to maintain benefit stability and remain competitive amid financial headwinds.
Insurers reporting second-quarter 2023 earnings earlier this year said they factored the emerging trend of increasing utilization into MA bids that were due in June. Also impacting pricing for next year’s offerings is the phasing in of substantial revisions to the CMS-Hierarchical Condition Categories (HCC) risk adjustment model that could reduce payments depending on plan type and coding practices, along with certain Part D changes resulting from the Inflation Reduction Act (IRA) that increase the cost burden for plans in the catastrophic phase of the benefit.
During a Sept. 20 KFF webinar, presenters and panelists seemed to agree on one thing: Regulations aimed at curbing misleading Medicare Advantage TV ads are a welcome fix for a mounting problem. Even an executive from the largest health insurance trade group acknowledged that “bad actors” in the MA marketing space need to be reined in — although he also stressed that most people are satisfied with their private Medicare plans.
Meanwhile, CMS Administrator Chiquita Brooks-LaSure, who kicked off KFF’s hour-long virtual event, made it clear that the Biden administration is ratcheting up scrutiny of MA plans primarily in response to rising consumer complaints.
As Medicare Advantage insurers prepare for the Oct. 1 start of Annual Election Period (AEP) marketing, they face an increased level of scrutiny as CMS implements various provisions aimed at curbing misleading and aggressive marketing practices. But new research suggests that some of the marketing misconduct of years past could rear its ugly head again this fall, prompting industry experts to question whether CMS should take additional steps or if action from Congress is needed.
Released on Sept. 12, the Commonwealth Fund’s survey of seniors’ experiences during the last week of the 2023 AEP tells the familiar tale of Medicare beneficiaries inundated with marketing messages during open enrollment. Nearly all seniors saw or received some form of plan marketing — ranging from phone calls to television advertisements — and more than three-quarters reported seeing television or online ads once daily. Additionally, 73% received phone calls at least once a week, and 30% reported receiving at least seven calls in a week. And despite CMS rules barring marketers from calling beneficiaries unless they’ve agreed to be contacted or requested the call, 74% of all respondents reported receiving an unsolicited call from a plan or plan representative.
Economic instability, food insecurity, limited access to transportation and overall lack of support are seniors’ top barriers to staying healthy, according to new data from Alignment Health. Sponsored by the tech-enabled Medicare Advantage insurer, the second-annual Social Threats to Aging Well in America survey polled 2,601 seniors across Alignment’s six-state service area, asking them about their financial, physical and emotional needs — and how those needs are impacting their health. Their responses illuminate the types of supplemental benefits that could prove most valuable to seniors weighing their coverage options as the 2024 Annual Election Period approaches.
Not having enough money for medical expenses was the most common overall obstacle to health, reported by 41% of survey respondents who anticipate any upcoming challenges. And about 20% of respondents cited financial instability as their top obstacle to health and wellness. One in 5 seniors said they’ve skipped out on needed medical care, and lack of funds was the No. 1 reason for doing so. In addition, 14% of seniors said they have outstanding medical debt, and 11% do not think they will be able to pay all of their medical bills in the coming year. When asked about supplemental benefits, nearly half (46%) of respondents said they would take advantage of assistance with rent, mortgage payments, and/or utility bills. Seniors also responded positively to fuel and grocery allowances.