Medicare Advantage

Medicare Advantage insurers and their distribution partners are bracing for a busy Annual Election Period, thanks in part to multiple Part D benefit changes resulting from the Inflation Reduction Act. Adding to their concerns about likely market disruption and enrollee confusion is a new drug manufacturer letter that raises operational and financial questions about the interplay between Patient Assistance Programs (PAPs) and the Medicare Payment Prescription Plan (M3P).

In a letter dated Aug. 19, Pfizer Inc. informed Part D beneficiaries using its Pfizer Oncology Together program that they must enroll in the M3P before they can be reconsidered for the PAP. According to the company’s website, Pfizer Oncology Together provides financial assistance with out-of-pocket (OOP) deductible, co-pay, or coinsurance costs for eligible patients who have been prescribed certain Pfizer Oncology oral and injectable medicines.

Aging in place, lack of transportation and economic insecurity are the top social threats to seniors’ health, according to new data from Alignment Health. Sponsored by the tech-enabled Medicare Advantage insurer, the third-annual Social Threats to Aging Well in America survey polled more than 2,000 seniors across the U.S., asking them about their financial, physical and emotional needs — and how those needs are impacting their health. Their responses also highlight the types of supplemental benefits that could prove most valuable to seniors as they consider their coverage options while the 2025 Annual Election Period looms.

After failing to meet minimum medical loss ratio (MLR) requirements for three years in a row, Centene Corp. is prohibited from enrolling new beneficiaries into its Medicare Advantage Prescription Drug (MA-PD) plan in Missouri, while a UnitedHealthcare (UHC) subsidiary regained enrollment abilities after a similar suspension. According to a Sept. 6 letter posted to CMS’s Parts C and D enforcement actions webpage, Centene’s Wellcare of Missouri Health Insurance Company, Inc. reported MLRs of 78.9%, 77.7% and 84.0% for contract years 2021, 2022 and 2023, respectively. When an MA organization has an MLR for a contract that is below 85.0% for three or more consecutive years, CMS must suspend the MAO’s ability to accept new enrollments in the second succeeding contract year after the third consecutive year of noncompliance, explained CMS. The enrollment freeze will take effect for any coverage beginning Jan. 1, 2025, through Dec. 31, 2025, and the contract will be removed from the Medicare Plan Finder list of available MA-PD plans during the 2025 Annual Election Period that begins on Oct. 15. According to CMS enrollment data for September, Wellcare of Missouri serves 4,254 MA enrollees, including 2,872 with Part D coverage. Meanwhile, UHC’s Care Improvement Plus South Central Insurance Co. was released from an enrollment suspension after reporting an MLR exceeding 85.0% for contract year 2023, according to a separate notice issued on Sept. 6. The UHC plan, which currently serves about 8,600 MA-PD enrollees, will be allowed to enroll beneficiaries during the upcoming AEP.

Senior-focused primary care organizations can enhance access to care for Medicare Advantage members, particularly among historically underserved groups, according to a new study of Humana plans that was conducted by the insurer’s research arm. The research, which was published in Health Affairs and co-authored with Harvard researcher J. Michael McWilliams, M.D., Ph.D., highlights the potential of population-based payment models to drive equity in health care delivery. Additionally, this research comes as Humana and other large insurers plan strategic exits from the MA market after experiencing sustained medical cost pressure in public sector insurance.

As insurers await the October release of the 2025 Star Ratings, Chicago-based insurer Zing Health is pursuing a lawsuit stemming from CMS’s calculation of the 2024 Star Ratings, which prompted an unprecedented redo and resubmission of 2025 bids. Based on the third year of poor performance from that initial calculation, CMS in December 2023 informed Zing that it intended to terminate its Medicare Advantage Prescription Drug (MA-PD) contract serving approximately 3,000 enrollees at the end of this year. Although termination was avoided when CMS recalculated the 2024 Star Ratings, the insurer has a few demands of CMS for the “irreparable harm” caused by its initial calculation.

During the Wells Fargo Healthcare Conference on Sept. 4, executives from Centene Corp. and Humana Inc. shared new details about how the headwinds facing their Medicaid and Medicare businesses are expected to play out. And within those updates, there was both good and bad news.

Centene Chief Financial Officer Drew Asher said during his presentation that the firm is “continuing to get Medicaid pressure,” largely due to the resumption of routine eligibility checks that restarted last spring after a multiyear pause during the COVID-19 pandemic. Centene discussed the issue at length during its second-quarter earnings call in July, “and so you might ask, all right, what’s changed in the last month and a half?” Asher said. 

A Humana Inc. executive speaking at the Wells Fargo Healthcare Conference on Sept. 4 said the Medicare Advantage-focused insurer will exit 13 counties where membership was “insignificant” and reduce its plan offerings in other counties, impacting an estimated 560,000 MA members next year. The selected counties will leave Humana’s footprint largely intact, while impacted members in other counties will have Humana plans to choose from, Chief Financial Officer Susan Diamond told Wells Fargo analyst Stephen Baxter. “The exit itself is positive in the sense that those plans were not contributing,” said Diamond. And in the other counties, if Humana can “ultimately retain more of those members, that’s incrementally positive because the plan choices left behind are priced in such a way that they will be positively contributing.” Despite seeing elevated utilization and medical cost pressure in the first half of the year, the insurer on Sept. 3 reaffirmed its full-year guidance of approximately $16.00 adjusted earnings per share. Diamond during the conference added that Humana is seeing more prior authorization decision appeals than it has seen historically. She also disclosed that Humana anticipates greater utilization of supplemental benefits such as over-the-counter cards and dental services in the fourth quarter, "just recognizing the benefit changes we've made for 2025."

As part of CMS and the Biden administration’s overall framework for health equity, Medicare Advantage organizations’ ability to assess social risk factors (SRFs) and address care disparities has taken on new importance this year, thanks to the introduction of the Health Equity Index (HEI) to the Star Ratings. Starting in 2027, insurers won’t be penalized for failing to close gaps in care on certain quality measures, but qualifying Parts C and D sponsors will be rewarded if they perform well on the HEI, which CMS has described as a “methodological enhancement” to a subset of existing measures. Quality experts say readiness varies across the industry, and plans need to better understand where to target interventions and where they stack up against other plans that may qualify for the HEI.

And not all plans will qualify: Contracts that enroll a minimum threshold percentage of enrollees with social risk factors (SRFs) will be assessed and divided into three tiers of performance. Plans that perform in the top tier will receive 1 point, the middle tier will receive 0 points, and the bottom tier is assigned -1 point for each measure. After a series of calculations, the points translate to an HEI score that ultimately determines whether plans receive a reward that is applied to quality bonus payments for the 2027 Star Ratings.

The countdown is on until the 2025 Medicare Annual Election Period (AEP), which runs annually from Oct. 15 through Dec. 7, and Medicare Advantage plans are anxiously awaiting intel on how their competitors responded to upcoming Medicare Part D changes stemming from the Inflation Reduction Act (IRA). And while marketing rules remain largely unchanged this AEP — thanks to a district court putting CMS’s plans to restructure broker compensation on hold — the 2025 AEP is likely to throw plans more than a few curveballs.

Those were just some of the takeaways shared by industry veterans during an Aug. 22 webinar, “2025 AEP Sales Strategy in the New Regulated Environment,” which was co-hosted by EvolveNXT and Rebellis Group.

After major insurers reported second-quarter financial results that reflected continued medical cost pressure in the government business, analysts revisited their takes on expectations for CVS Health Corp.’s Aetna, Centene Corp. and industry peers. Two notable factors driving some of the headwinds in the back half of the year are the 2025 Medicare Annual Election Period (AEP), which kicks off on Oct. 15, and the impact of Medicaid redeterminations. The latter was of particular concern to analysts after Sept. 4, when Centene provided an update at the Wells Fargo Healthcare Conference signaling lower-than-expected Medicaid enrollment.

For managed care organizations with a large Medicaid footprint, the consistent takeaway for Barclays after second-quarter earnings reports was “incremental trend pressure relative to current expectations,” stemming from redeterminations picking up in the first half of the year “that put increased acuity pressure on state rates,” wrote equity research analysts on Aug. 22. “From here, membership should start to stabilize, which is the first step toward recovery.”