Medicare Advantage plans are flourishing and the Silver Tsunami is among the reasons
By Susan Mores – HealthCareFinance – March 26, 2019
Today's Medicare Advantage plans are flourishing and the Silver Tsunami is among the reasons.
"Over the last four years, Medicare Advantage enrollment increased by more than 30 percent, while the number of people eligible for Medicare grew by about 18 percent," said Steve Warner, vice president of Medicare Advantage Product for UnitedHealthcare Medicare and Retirement.
Other reasons for the growth: Innovative models from big insurers and upstarts alike that improve care for health plan members and drive revenue for payers as they look beyond fee-for-service.
IT STARTS WITH THE CONSUMER
Consumers are finding unique value in MA, both in terms of the quality of care and in the financial value.
Medicare Advantage, in fact, makes it easier for consumers to navigate the healthcare system and choose providers, in a way that traditional Medicare does not, said those interviewed.
"Actually it's pretty hard to navigate the healthcare system on your own," said Tip Kim, chief market development officer at Stanford Health Care. "Most Medicare Advantage plans have some sort of care navigation."
Warner of UnitedHealth's Warner added that Medicare Advantage also offers value and simplicity.
"It provides the convenience of combining all your coverage into one plan so you have just one card to carry in your wallet and one company to work with," Warner said. "Most plans also offer prescription drug coverage and additional benefits and services not available through original Medicare, including dental, vision and fitness."
REBRANDING FOR THE NEW ERA
MA plans did not emerge out of thin air. By another name, Medicare Advantage is managed care, a term that was the bane of healthcare during the height of HMOs in the 1980s.
"Medicare Advantage has rebranded 'managed care' to 'care coordination,'" said consultant Paul Keckley of The Keckley Report. "Humana and a lot of these folks have done a pretty good job. Coordinating care is a core competence. Managed care seems to be working in this population."
MA came along at the right time for CMS's push to value-based care.
"I would suggest on the providers' side, embracing Medicare Advantage is an opportunity to get off the fee-for-service mill," said Jeff Carroll, senior vice president of Health Plans for Lumeris, which recently paired with Stanford Health Care on the Medicare Advantage plan, Stanford Health Care Advantage.
"Provider-sponsored Medicare Advantage plans are a way to put teeth into an accountable care organization," Keckley added. "Medicare Advantage success is a silver tsunami among major tsunamis. Obviously it's a profitable plan for seniors and profitable for underwriters. The winners in the process will get this to scale."
MA is an innovative model that is not a government-run system, but a privately-run system essentially funded by the government.
PAYERS IN THE MA GAME
UnitedHealthcare has the largest MA market share of any one insurer. Twenty-five percent of Medicare Advantage enrollees are in a UnitedHealthcare MA plan, followed by 17 percent in Humana, 13 percent in a Blue Cross Blue Shield and 8 percent in Aetna, according to the Kaiser Family Foundation.
Numerous insurers, in fact, have gotten into the MA market, including Clover Health in San Francisco, a five-year-old startup which has Medicare Advantage as its only business.
Clover is a tech-oriented company that boasts machine learning models that can accurately predict and identify members at risk of hospitalization.
Because Clover focuses only on MA, it can do a better job at problem solving the needs of an older population, said Andrew Toy, president and CTO of Clover Health.
"The problems we face in Medicare Advantage are very different from a younger generation," Toy said.
Forty percent of the older population is diabetic. Most seniors will be dealing with a chronic disease as they get older.
In other insurance, whether its individual or commercial, the lower cost of the healthier population offsets the cost of the sicker population. MA has no way to offset these costs. Plans can't cherry-pick consumers or raise premiums for a percentage of the population.
What MA plans can do is design plans that fit the varying needs of the population. A plan can be designed for diabetics. For younger seniors or those not dealing with a chronic disease, a plan can be designed that includes a gym membership.
"All these plans are regulated," Toy said. "We have the flexibility to move dollars around. We can offer a higher deductible plan, or a nutrition plan. The incentives for us in Medicare Advantage are different than the incentives in Medicare. CMS has explored giving us more leeway for benefits. Consumers have a choice while still having the guarantees of Medicare."
Toy believes regular Medicare is more expensive because MA offers a more affordable plan based on what an individual needs.
"When you need it, we get more involved in that care," Toy said, such as "weight control issues for diabetics."
The drawbacks are narrower networks, though Toy said Clover offers an out-of-network cost sharing that is pretty much in line with being in-network.
UnitedHealthcare's Medicare Advantage LPPO plans offer out-of-network access to any provider who accepts Medicare, Warner said.
UnitedHealthcare also offers a wide variety of low and even zero-dollar premium Medicare Advantage plans and annual out-of-pocket maximums, Warner said. By contrast, original Medicare generally covers about 80 percent of beneficiaries' healthcare costs, leaving them to cover the remaining 20 percent out-of-pocket with no annual limit.
"From a consumer value proposition, it makes Medicare Advantage a better deal," Kim said. "One is Part B, 20 percent of an unknown number. Knowing what the cost will be in a predictable manner is a preferable manner."
Stanford Health Care launched a Medicare Advantage plan in 2013. Lumeris owned and operated its own plan, Essence Healthcare, for more than eight years. Stanford and Lumeris partnered on Stanford Health Care Advantage in northern California, using Lumeris technology to help manage value-based reimbursement and new approaches to care delivery through artificial intelligence-enabled diagnostic tools and other methods.
"We are not a traditional insurance company," Kim said. "We're thinking about benefits from a provider perspective. It's a different outlook than an insurance company. By definition we're local."
MA MARKET STILL HAS ROOM TO GROW
While the Medicare Advantage market is competitive, it is also under-penetrated, Brian Thompson, CEO for UnitedHealthcare Medicare & Retirement, said during a 2018 earnings report.
Currently, about 33 percent of all Medicare beneficiaries are in an MA plan, he added, but UnitedHealth sees a path to over 50 percent market concentration in the next 5-10 years.
It's a path not so subtly promoted by the Centers for Medicare and Medicaid Services.
As a way to encourage insurers to take risk and get in the market, around 2009, CMS gave MA insurers 114 percent of what it paid for fee-for-service Medicare. The agency began decreasing those payments so that by 2017, traditional Medicare and MA became about even.
MA insurers instead thrive on their ability to tailor benefits toward wellness, coordinate care and contain costs within the confines of capitated payments, the essence of value-based care.
They have received CMS support in recent rate notices that gives them the ability to offer supplemental benefits, such as being able to target care that addresses the social determinants of health. Starting in 2020, telehealth is being added to new flexibility for these plans.
WHAT THE FUTURE MAY HOLD FOR MA
Medicare Advantage plans have expanded and, in so doing, opened innovative new options for plans and their customers alike at the same time that the ranks of people eligible for Medicare continues to swell.
So where is it all going?
Medicare Advantage is changing the way healthcare is paid and delivered to the point that Keckley and Toy agreed the future may not lie in Medicare for All, but in Medicare Advantage for all.
"I think a reasonable place to end, is in some combination where the government is involved in price control, combined with the flexibility of Medicare Advantage," Toy said. "That's really powerful."
Medicare Blog | Medicare News | Medicare Information
Tags: Medicare Advantage
Aetna Supplemental: Your opportunity to go beyond the Golden Gateway
Beyond the Golden Gateway
We’re excited to take our next broker incentive trip to San Francisco, where top producers will experience magical moments beyond the Golden Gateway.
You can view complete trip qualification details here.
Tags: aetna, Aetna Supplemental
Lack of Dental Coverage has Real Costs and Consequences for People with Medicare
This week, the nonpartisan Kaiser Family Foundation (KFF) released an issue brief examining the issue of oral health for people on Medicare. It describes the consequences of foregoing dental care, current sources of dental coverage, use of dental services, and related out-of-pocket spending.
Check out the dental plans PSM makes available to our independent agents.
Tags: dental plans
Looking to boost sales?
Don't forget to promote Plan N to your customers! Plan N is a great value with low and predictable cost sharing, access to any doctor that accepts Medicare, and guaranteed to renew as long as the premium is paid.
Cigna is able to keep premiums low for Plan N through a cost-sharing platform. Policyholders will pay the Medicare Part B deductible and potential excess charges in addition to a copayment for office and emergency room visits.
For individuals who are financially conscious and overall in good health, Plan N may be the right option for them.
Check out all the things Plan N includes:
Not appointed with Cigna? Request details here
Tags: Medicare Supplement, Plan N
How Large is Medicare Part D?
In less than two decades, Part D has become an industry behemoth
Medicare is second only to private insurance as a major payer for retail prescription drugs. The program’s share of the nation’s retail prescription drug spending increased from 18% in 2006 to 30% in 2018.
Percent of Retail Drug Spending, By Payer
Drugs Covered by Part D and Part B Accounted for 19% of all Medicare Spending in 2016
Part D Spending is Poised to Escalate
Read More: https://www.kff.org/infographic/10-essential-facts-about-medicare-and-prescription-drug-spending/
Tags: Medicare Advantage, Part D
How To Do One Thing At A Time
In his 2013 book, The ONE Thing: The Surprisingly Simple Truth Behind Extraordinary Results, writer Gary Keller reminds us that everyone has 24 hours in a day. So why do some people earn more, achieve more and get more done? They “go small,” he says:
“When you want the absolute best chance to succeed at anything you want, your approach should always be the same. Go small. ‘Going small’ is ignoring all the things you could do and doing what you should do. It’s recognizing that not all things matter equally and finding the things that matter most. It’s a tighter way to connect what you do with what you want. It’s realizing that extraordinary results are directly determined by how narrow you can make your focus.”
Going small to follow one path sounds easy, but there are fresh opportunities and shiny objects around every corner. Distraction is everywhere. There are times when you want to test the waters, and creativity often requires sampling. But if you truly want to move the needle, it demands a narrow field of vision.
For example, our company always chooses an annual focus area. Last year was about data. Across all our teams and functions, everyone worked to boost user productivity by leveraging data. That task looks different for each employee, but we’re aligned with a single, shared goal. When you focus on what’s important, the results can be incredible.
Lay out all the options and pick what really, truly matters. Set your focus area and stick to it.
Start as small as possible
The advice to “go small” works on multiple levels. Choosing your goal or main project is the first step. Then, once you know what you’re trying to achieve, zoom in closer.
When we’re working on a major project, I always try to step back and ask: “What’s the smallest version we could create that would still produce results?” Once you have that mini version, gather feedback. Refine and work your way up to a bigger, better model. Keep going, and you’ll achieve more than you thought was possible.
Create automated systems
Technology is far from foolproof, and until recently, our admins were constantly tackling server issues at 3 a.m. Every time it happened, I reiterated the need to find a real solution – one that didn’t require midnight wake-ups.
Eventually, we installed automated tools that tell us, for example, when our servers are 80% full. They notify us again when the servers reach 85% capacity. Now we never hit that 95% panic zone. We’ve automated an issue that drained our focus.
Systems aren’t exciting, but they are essential. Create efficient processes and automate as many steps as possible. You’ll free up valuable time and energy to stay focused on your “one thing.”
Designate a leader
Sports teams need coaches and captains. Orchestras need conductors. Group activities almost always function better when someone’s leading the way, even if the work is highly collaborative. At JotForm, all of our cross-functional product teams have leaders – and good ones dramatically increase both focus and productivity.
So what makes a strong leader? In my experience, it’s someone who can make quick, smart decisions. They listen closely, gather information and make choices that move the group closer to its goals.
If you’re working solo, it’s equally important to step back from your daily tasks and measure what matters. Be your own leader. You can always reach out for help, too. Whether it’s a friend, colleague, mentor or advisor, a different perspective is often highly valuable – but remember that the final decisions are always yours.
Explore – within your boundaries
All this talk of single-minded focus can sound really dull, especially if you’re a creative person. I get it. But doing one thing at a time isn’t about boring yourself into efficiency. There can still be room for exploration if you create clear boundaries. Build your sandbox, and then you can play in it.
Because we spend a full year chasing one big goal, our teams are welcome to follow some tangents along the way. There’s no rush to the finish line. I also realize that off-the-wall ideas can spark innovation, so we encourage experimentation.
If your team is eager to explore, set some markers so you don’t get lost. For example, our Friday ‘demo days’ are the time when everyone checks in and shows what they’ve done. If a team has gone off the rails, we can gently bring them back on track. Usually, though, we’re excited about what they’ve accomplished.
You can set up markers as a solopreneur as well. Think of your project as a large circle that contains lots of smaller circles or checkpoints. Once you have those boundaries in place, you’re free to wander.
Set tech limits
In a 2010 study published in the journal Science, Harvard University psychologists Matthew A. Killingsworth and Daniel T. Gilbert discovered that people spend almost 47% of their waking hours thinking about something other than what they’re currently doing.
Even more striking? Distractions make us unhappy. As Killingworth explains, “Mind-wandering is an excellent predictor of people’s happiness. In fact, how often our minds leave the present and where they tend to go is a better predictor of our happiness than the activities in which we are engaged.”
That’s a stunning thought: being focused can actually make you feel better, regardless of what you’re doing. From starting a business to finishing a spreadsheet (without checking Instagram), single-tasking will not only help you achieve great results, but you’ll enjoy the process a lot more.
Startup gurus and productivity experts have endless suggestions to help you stay focused, but here’s what consistently works for me:
Box your time. Creating time limits is oddly motivating (and effective). Whatever you want to do, try ‘boxing’ it into a set time period and ignore distractions, including email, calls, texts, making coffee, alphabetizing your bookshelf or grooming the cat. Get laser-focused for that set period of time and then take a break. Repeat as needed. You can apply this same principle to projects, teams, products or just about anything else that requires true focus.
Box your energy. We all have energy limits. Even the so-called “sleepless elite” (high performers like Pepsi CEO Indra Nooyi and fashion designer Tom Ford) will eventually run out of fuel. Doing one thing at a time will preserve your precious energy. And just like time-boxing, you can get even more intentional about shifting your energy toward what matters.
For example, if I have a big interview or presentation on my calendar, I’m careful about what I schedule around it. I try to avoid meetings. I get more sleep. I eat more leafy greens and I do what I can to stay relaxed. I’m ‘boxing’ my energy toward an important goal.
Make a clean break
In June 2018, the makers of a message board app surveyed more than 11,000 employees at 30 of the biggest technology companies. They asked: Are you currently suffering from job burnout? More than 57% of participants said yes.
Many people are struggling to stay on what can feel like a treadmill without a ‘stop’ button. The tech-fueled blur between work and personal time can be difficult – and confusing. And if you’re an entrepreneur or business owner, it’s all in your hands.
The solution? Create as many boundaries as you can, within your sphere of influence. As much as possible, separate work from your personal life. I know this might sound overly simple, but even if you work from home, it’s up to you to create real limits.
Set office hours, for example, and don’t clock in outside those periods. When I leave the office, I do everything I can to leave work there, too. I want to be present for my family. I want to enjoy my time with them – and I need to rest and recover. I don’t work on the weekends, either. If I do have a new idea on Sunday afternoon, for example, I’ll send a quick note to myself (but I won’t dig into it).
If I want to share something with a team member, I will send them an email, but I’ll write ‘FOR MONDAY’ in the subject line. If I see emails at night, I remind people that they should wait until the next morning (and then I try to take my own advice).
Take real time off
I can’t say it enough. Even if you’re working hard to build a business or accomplish great things, downtime is not optional. You need to rest. Your body needs to recover, your brain needs to consolidate all those inputs, and you’ll be infinitely happier and more productive if you give yourself a break.
The data confirms it: After a vacation, 64% of people say they’re “refreshed and excited to get back to [their] job.” Hiking in nature and staying disconnected from all devices for four days can lead to a 50% spike in creativity. If employees took just one extra day of paid leave each year, the result would add $73 billion in output to the US economy.
So, whether you’re crafting a business plan, writing a novel, lifting weights or perfecting your Bolognese sauce, give it everything you have. Do that one most important thing and then move on. It’s that simple – and that powerful.
Tags: Sales Tips, Sales Strategies
Enhancing Medicare Advantage
By the Manhattan Institute – March 2019
Medicare funds health-care services for 60 million elderly and disabled Americans. Increasing numbers — 21 million in 2019 — enroll in Medicare Advantage (MA), choosing Medicare coverage from competing plans managed by private insurers. Medicare’s Fee-for-Service payment system has hampered appropriate coordination of care and inflated costs by paying separately for each medical procedure or service delivered to beneficiaries, regardless of their value.
Nevertheless, thanks to a few poorly designed rules, MA plans are currently operating below their full potential. This paper suggests potentially bipartisan reforms that could enhance the quality of MA plans for beneficiaries, while getting better value for taxpayers. Key Findings MA covers the same health-care services as traditional Medicare, but at lower cost. By paying health-care plans in advance, MA provides an incentive for them to develop innovative care arrangements that keep beneficiaries healthy. The rules under which MA plans operate can be restructured so that more of the efficiency gains can be passed on to beneficiaries.
Medicare Advantage has demonstrated that it can provide better quality care at lower cost than Medicare’s traditional fee-for-service reimbursement model. It reduces hospitalizations, shields patients from catastrophic medical bills, and makes possible innovative integrated-care services. MA plans also provide access to prescription drug coverage at substantially less cost on average than stand-alone Part D individual plans, and help pay for dental, vision, and hearing services that are not part of the standard Medicare benefit. Upward of a third of all senior citizens have chosen MA—and with some modest budget-neutral reforms, many more could similarly benefit.
Tags: Medicare Advantage
Medicare Advantage Plans Allowed To Expand Access To Telehealth In 2020 Plan Year
On January 18, 2019, the Centers for Medicare & Medicaid Services (CMS) announced a change to the Medicare Advantage Value-Based Insurance Design (VBID) model, allowing participating Medicare Advantage plans to offer telehealth services if an in-person option remains. Telehealth services can be offered under two models—offered to all plan members or offered to those members with specific health conditions. Currently Medicare allows telehealth only when the beneficiary lives in a rural area. The participating plans can test how telehealth can augment and complement current Medicare Advantage networks.
Read More: https://www.openminds.com/market-intelligence/news/medicare-advantage-value-based-insurance-model-to-increase-access-to-telehealth-in-2020-plan-year/
Tags: Medicare Advantage
Have you heard? MACRA is a hot topic this year for the Medicare Supplement industry. Legislation and regulations can often be hard to understand, so we’re going to break it down into small pieces to help you get ready for the changes that will happen January 1, 2020.
What is the definition of “newly eligible” Medicare beneficiaries?
Individuals who have attained age 65 or first become eligible for Medicare due to age, disability or end-stage renal disease on or after January 1, 2020.
ALERT: Potential Genetic Testing Scam
Agents: Please be wary of any offers of payment in exchange for referrals of Medicare members for genetic testing or other medical services covered by Medicare. This may be part of a scam.
About the scam
The scam is occurring in multiple states at a variety of locations, including places like local health fairs, broker offices, convenience stores, grocery stores and shopping malls.
Based on the limited information we know at this time, it appears that some individuals are offering Medicare beneficiaries a cheek swab for genetic testing as part of a free health screening. Beneficiaries are told they just need to provide a cheek swab, and their ID and Medicare information, to receive their test results.
Medicare does not pay for these types of genetic predisposition (screening) tests , nor does Aetna. Additionally, requesting Medicare member information and/or providing it to a lab unnecessarily may potentially result in fraudulent activity.
Agent recruitment tactics
It’s been reported that some entities are recruiting agents and agencies to participate in getting their clients signed up for genetic testing. Agents are given the impression that the program is approved by Medicare and by carriers, which is not true. They charge agents upfront to participate and then pay agents for each client referred for genetic testing.
What you need to know – Your responsibilities as an agent
As an agent representing Aetna and Aetna Coventry Medicare plans, you must follow Aetna and CMS requirements. You’re responsible for knowing the rules and complying with them.
Aetna absolutely does not condone or approve of any activities that violate CMS regulations. Any agents found conducting activities that are prohibited by CMS would face corrective action up to termination of their contract (“for cause”).
Remember, you play an important role in preventing fraud and abuse
As one of our contracted agents, you’re required to report all suspected or actual occurrences of non-compliance, fraud, waste or abuse. There are four ways to report potential issues. You can:
Resources to help you stay compliant
Thank you for your dedication and commitment to Aetna Medicare members. If you have any questions, we’re here to help. Just reach out to your local Aetna Medicare broker manager, or contact the Aetna Medicare Broker Services Department at 1-866-714-9301 or firstname.lastname@example.org.
Aetna is the brand name used for products and services provided by one or more of the Aetna group of subsidiary companies, including Aetna Life Insurance and its affiliates (Aetna).
Prior to engaging in the sale of Aetna or Coventry Medicare products, producers must be ready to sell, which means certified, contracted, licensed in the applicable states, and appointed by Aetna in accordance with state law.
Medicare's New "What's Covered" App for Smartphones
Are you or your client unsure if Medicare will cover a medical test or procedure? The Center for Medicare and Medicaid Services ("CMS") has a new app available to help answer those questions.
The app is called "What's Covered" and is available for free on both the App Store and Google Play.
The app delivers accurate cost and coverage information right on your smartphone. Search for "What's Covered" or "Medicare" and download the app to your phone.
The app delivers general cost, coverage and eligibility details for items and services covered by Medicare Part A and Part B. Search or browse to learn what's covered and not covered, how and when to get covered benefits; and basic cost information. You can also get a list of covered preventative services.
Click on the link below to read more about the What's Covered app.
Tags: Medicare, Medicare News
Aetna Supplemental: Hot Medicare Supplement Rates in Texas
Not appointed with Aetna Supplemental? Request details here
You can use Aetna Quote & Enroll to submit electronic applications or order state-specific sales materials.
Tags: aetna, Aetna Supplemental
CMS levies fewer fines on Medicare Advantage plans
By ModernHealthCare – March 4, 2019
Five Medicare Advantage insurers were hit with fines based on 2018 audits—the lowest number of fines imposed by the CMS in four years.
In total, the agency fined the five plans $204,900 for violating Medicare Part C and Part D requirements, it said. The CMS audited 39 insurers.
The fines levied for 2018 audits pale in comparison to those imposed in prior years. In 2018, the CMS fined 18 insurers roughly $2.5 million resulting from audits the previous year. Before that, 2016 audits resulted in $6.9 million in so-called civil monetary penalties, and 2015 audits led to $8.4 million in fines. An insurer can receive a penalty for delaying or denying access to covered prescription drugs or services, leading beneficiaries to incur unnecessary out-of-pocket costs.
"The small number and low cost of these fines will be cited by those who believe that the Trump Administration is going easy on (Medicare Advantage) plans," said Michael Adelberg, principal at Faegre Baker Daniels Consulting.
The Trump administration has been supportive of the Medicare Advantage program, making it easier for seniors to compare and pick Advantage options. But CMS Administrator Seema Verma denied concerns from advocates that the agency is trying to steer patients to Medicare Advantage over traditional Medicare.
Enrollment in Advantage plans has grown rapidly. The latest federal data shows that 22.4 million people are enrolled in a Medicare Advantage plan this year, an increase of 6.8% compared to January 2018.
The CMS said that a possible difference for the change in fines is due to the size in enrollment of the audited organizations.
"One noticeable difference between 2018 and past audit years is that the average enrollment size of the audited organizations was much smaller than in recent past years," a spokesperson said. "CMPs are imposed when the conditions of non-compliance adversely affected or had a substantial likelihood of adversely affecting enrollees."
So a plan with a large number of enrollees may get a bigger fine if a violation impacted a large number of people.
"The amount of a CMP may not correlate with a sponsor's overall level of compliance or performance on an audit," the agency said. "The majority of CMPs are assessed based on the number of impacted enrollees."
Tags: Medicare Advantage
Report: Enhancing Medicare Advantage
Chris Pope February 28, 2019
Medicare funds health-care services for 60 million elderly and disabled Americans. Of these, 39 million receive coverage through a plan known as “Traditional Medicare” or “Medicare Fee-for-Service” (MFFS) that the federal government administers directly. Increasing numbers—21 million in 2019—enroll in Medicare Advantage (MA), choosing Medicare coverage from competing plans managed by private insurers.
Medicare’s Fee-for-Service payment system has hampered appropriate coordination of care and inflated costs by paying separately for each medical procedure or service delivered to beneficiaries, regardless of their value. As every detail of its operation is highly politicized and hard to reform, MFFS has an outdated benefit structure that leaves elderly and disabled enrollees exposed to potentially catastrophic out-of-pocket costs.
By contrast, MA plans have broad flexibility to upgrade operations. They are able to reduce costs and improve medical outcomes by making better use of primary care, negotiating discounts with preferred networks of providers, and managing chronic conditions to avoid expensive hospitalizations. This allows them to attract enrollees by reducing out-of-pocket costs and enhancing benefits.
Nevertheless, thanks to a few poorly designed rules, MA plans are currently operating below their full potential. This paper suggests potentially bipartisan reforms that could enhance the quality of MA plans for beneficiaries, while getting better value for taxpayers.
Tags: Medicare Advantage
Likely return of the health insurance tax to impact MA profits
By Susannah Luthi – ModernHealthCare – March 1, 2019
Congress appears unlikely to delay the health insurance tax next year. If that happens, Medicare Advantage plans would see the biggest impact, analysts and insurers say.
On Wednesday, a bipartisan group of House lawmakers introduced a suspension of the tax, known as the HIT, through 2021. The tax was in place for 2018, suspended in 2019 and is due to take effect again in 2020.
But as House lawmakers unrolled their proposal for another delay, senior congressional staff from both chambers and parties said they don't think it's likely to move before insurers start setting their ACA exchange rates next year.
One senior GOP aide said it's unclear how any of the smaller tax delays will get done, "let alone the big spending health care extenders."
Some insurance executives have been bracing for the possibility they won't get their delay. But they also haven't given up on urging Congress to step in and eliminate the tax or continue the moratorium from 2019.
In a quarterly earnings call in January, UnitedHealth Group CEO David Wichmann warned that the return of the HIT would increase healthcare costs by a total $20 billion for 142 million people.
"That causes the average senior couple to see their premiums raised by $500 per year and for families with small business coverage by about the same amount, around $480 or so per year," Wichmann said. "Our view is that outcome is unacceptable because healthcare already costs too much."
S&P analyst Deep Banerjee said a return of the HIT wouldn't necessarily affect insurers' profit margins for Affordable Care Act individual market exchange plans, where companies can pass the fee on to their customers through higher premiums.
However, he said, insurers are less likely to take this approach in the more lucrative Medicare Advantage market where competition between plans is so tight they don't want to risk losing enrollees.
The push for the HIT delay comes after the eight largest publicly traded insurance companies reported more than $21 billion in net income for 2018 on top of revenue of $718 billion, according to analysis by Modern Healthcare. Despite the HIT being in effect in 2018, insurers' earnings benefited from low medical cost trends, lower utilization of healthcare services, declining pharmacy costs and a lower tax rate, according to a report released Thursday by A.M. Best.
In a sign that Medicare Advantage insurers are worried about the HIT's potential impact on their markets, Humana CEO Bruce Broussard told investors earlier this month the HIT moratorium allowed Humana and the rest of the industry to make significant investments in benefits and drive better health outcomes, but its return will reverse that. "The return of the HIF in 2020 will negatively impact seniors across the nation in the form of reduced benefits and/or higher premiums," he said.
Broussard, during the company's first earnings call for 2019, said this is driving their lobbying push.
"We are working with partners to urge Congress to take legislative action to repeal the HIF for 2020 and beyond, recognizing that there is a sense of urgency given the rapidly approaching deadline for submitting bids for 2020 Medicare Advantage offerings," Broussard said.
On the flip side, UnitedHealth CFO John Rex in January indicated that the company is so diversified it's unlikely to feel a financial squeeze, warning that instead the tax would add to the cost burden of the insured.
"I'd be remiss to diminish $2.6 billion of our customers' funds just having been paid for the health insurance tax," Rex said. "That's still a very significant number for any company, I would say, and a burden for our customers."
In terms of the HIT's impact on premiums, Oliver Wyman Actuarial Consulting last year projected a likely increase of just over 2% annually. The firm predicted the biggest increase for Medicare Advantage — $241 per MA enrollee versus a $196 increase per person in the ACA individual market.
A senior Democratic aide said while there's been preliminary discussions on the staff level, the legislation doesn't seem to have a good chance of a House floor vote anytime soon.
And Rep. Earl Blumenauer (D-Ore.), who sits on the House Ways and Means Committee's tax policy and health panels, said this is partially because all the insurance taxes are figuring into the committee's broader discussion over where they want to go with taxes.
"For me, I don't think it's a good idea to be spun out on individual details until we've heard the big picture," the congressman told Modern Healthcare.
"There's a big agenda in terms of trying to deal with tax issues, and I think you don't want to deal with these things piecemeal until we find out where we're at, because they all interrelate," he added.
Reps. Ami Bera (D-Calif.), Josh Gottheimer (D-N.J.), Jackie Walorski (R-Ind.) and Kenny Marchant (R-Tex.) led the House proposal to delay HIT through 2021. Sens. Cory Gardner (R-Colo.), Jeanne Shaheen (D-N.H.), John Barrasso (R-Wyo.), Doug Jones (D-Ala.), Tim Scott (R-S.C.), and Kyrsten Sinema (D-Ariz.) led the Senate version in January.
Tags: Humana, Medicare Advantage
New Study: Nine out of Ten Seniors Value their Medicare Supplemental Plan
Enrollees agree that these plans offer improved financial security and access to high quality care
WASHINGTON, D.C. – Seniors continue to be overwhelmingly satisfied with their Medicare supplemental insurance coverage. According to a study by Global Strategy Group on behalf of America’s Health Insurance Plans (AHIP), more than nine out of ten of enrollees value their plan because it protects them against unanticipated costs. Further, 95 percent say these plans allow them to see the doctors and specialists they know and trust.
Medicare Supplement plans offer coverage for out-of-pocket costs that are not covered by traditional Medicare, such as deductibles, coinsurance, and copayments. The study asked seniors about the value, benefits, customer service, and overall quality of care received through these plans.
Additional key findings include:
Around 13 million seniors rely on Medicare supplemental insurance, and more than one third of those with a traditional Medicare plan choose to enroll in a Medicare supplemental plan because they offer enhanced protection, consistent coverage, and access to high quality care.
“Seniors should be able to get affordable coverage and care that protects their both their health and financial security,” said Tom Meyers, AHIP Vice President of Product Policy. “We continue to see this overwhelming satisfaction with Medicare supplement plans because they offer peace of mind.”
The complete findings from the Global Strategy Group study including feedback from enrollees, can be found here.
Tags: Medicare Supplement, Medigap
2019 Choosing a Medigap Policy