Summary: This final rule will revise the Medicare Advantage (MA) (Part C) program and Medicare Prescription Drug Benefit (Part D) program regulations to implement changes related to marketing and communications, past performance, Star Ratings, network adequacy, medical loss ratio reporting, special requirements during disasters or public emergencies, and pharmacy price concessions.
This final rule will also revise regulations related to dual eligible special needs plans (D-SNPs), other special needs plans, and cost contract plans. This final rule finalizes certain 2021 and 2022 Star Ratings provisions that were included in two interim final rules with comment period (IFC) that CMS issued on April 6, 2020, and September 2, 2020; other policies from those interim final rules will be addressed in other rulemakings.
Dates: Effective dates: These regulations are effective on June 28, 2022, except for amendatory instructions 27 and 36 (regarding the definition of “negotiated price” at §§ 423.100 and 423.2305), which are effective January 1, 2024.
Applicability dates: The applicability date of the provisions in this rule is January 1, 2023, except as explained in SUPPLEMENTARY INFORMATION.
There is lots of information for us to review and determine how it may impact the agent community we serve. We will dig in and share highlights on future blog posts. In the meantime, you are more than welcome to review the official documents at the links below.
Some policymakers have proposed redesigning Part D — Medicare’s voluntary prescription drug benefit — to protect beneficiaries from high out-of-pocket costs, realign financial incentives for the organizations that sponsor Part D plans, and reduce overall program spending.
Several changes have been proposed to the standard Part D benefit, including:
Creating a maximum out-of-pocket cap for beneficiaries when they reach the catastrophic spending phase of the program, something that currently doesn’t exist.
Ensuring that Part D plans are incentivized to promote drugs that offer the most value at the lowest cost — for example, by reducing government subsidies for reinsurance and shifting responsibility for large claims to plans themselves.
Requiring drug manufacturers to provide cost discounts.
In 2020, three bills were introduced in Congress that featured changes to the Part D benefit: H.R. 3, S. 2543, and H.R. 19 (see table). The two House bills were reintroduced in 2021.
Why do some policymakers argue for Part D redesign?
Since its start in 2006, Part D has undergone little change, even as Medicare spending on the prescription drug benefit has grown substantially, from $44.3 billion in 2006 to $102.3 billion in 2019. Most of this growth has been in the catastrophic phase of coverage — which begins when beneficiaries have spent $6,550 out of pocket. Medicare spending on Part D catastrophic coverage more than doubled between 2013 and 2017 to more than $59 billion, driven largely by the high prices of specialty drugs. Meanwhile, beneficiaries contend with a cost-sharing requirement in the catastrophic phase — 5 percent coinsurance — that can sometimes severely limit their access to these expensive medications.
Concerns about the sustainability of spending at this level spurred recommendations in 2016 for realigning Part D plans’ financial incentives. Currently, plans place high-cost drugs on preferred formulary tiers so that beneficiaries enter the catastrophic coverage phase as early in the year as possible — knowing that Medicare will subsidize claims at 80 percent for those beneficiaries.
By shifting financial responsibility for these claims from Medicare to the plans themselves, some analysts believe that Part D plan sponsors — the organizations that contract with Medicare to offer plans — would be likely to negotiate more aggressively with drug manufacturers for better prices and formulary placement. Others argue that redesign isn’t necessary, pointing to the popularity of the Part D program and the fact that premiums have been stable for years. Opponents of the proposed changes also say they could lead to significant increases in the size of discounts manufacturers owe for certain classes of drugs.
Anthem is a leading health benefits company dedicated to improving lives and communities, and making healthcare simpler. Through its affiliated companies, Anthem serves more than 106 million people, including more than 42 million within its family of health plans.
Make sure to have Anthem in your portfolio for the 2022 AEP.Request details todayor call us at 800-998-7715 for more information.
Anthem Medicare Plans Extras
Anthem Medicare plans have benefits that support daily needs too, like money for over-the-counter health products. There are also plans that include dental, vision and hearing coverage, and a SilverSneakers membership, so you can take fitness classes at home or at a gym.
Essential Extras makes your life a little easier
With an Anthem Medicare Advantage plan, you can choose one service from a list of 10 Essential Extras. These are resources like rides and meals that make everyday life a little easier. Here are a few examples:
receive up to 30 rides to health appointments each year.
Personal Home Helper
have a health aide help with house work or other daily needs.
Health and Fitness Tracker
receive a fitness tracking device and access to a brain exercise program online that helps with memory, attention and more.
Make sure to have Anthem in your portfolio for the 2022 AEP.Request details todayor call us at 800-998-7715 for more information.
National trends are useful, but Medicare competition is ultimately local. In line with that, we split the US into nine regions to see how each region compared to national trends. (MyMedicareBot can drill into the specific counties where each plan operates, not shown in this report.)
Local PPOs and D-SNPs are Growing
Local PPOs are outpacing HMOs
Compared to a national average of 25% growth of local PPOs, New England saw significantly higher growth at 29%. If Employer Group Health Plans were excluded, the numbers would be even more dramatic: 46% growth in New England vs 26% national average.
PPOs grew the least in the Southeast, including South Atlantic, at about 10%. Conversely, these areas had the greatest HMO growth: 14% in the Southeast and 12% in South Atlantic. D-SNPs are another source of growth
The Midwest Lakes region had a growth rate of 46% for Special Needs Plans for Dual Eligibles. This region also led the nation for Medicare-Medicaid Plans.
The Southwest and West/Pacific had the lowest growth in D-SNPs at about 10%.
The membership level of Employer Group Health Plans remained flat. Only in New England did the growth rate keep pace with other plans.
Medigap+PDPs are Down and MAPDs are Up
MAPDs were up 10.5% nationally
The Midwest Plains lead at 13%.
The Mid-Atlantic and West/Pacific regions lagged the most, at around 7% MAPD growth.
PDPs were down 3.1% nationally
The Southeast region were down the most at a 5.7% decline.
The West/Rockies region had the least PDP decline at 0.7%.
IndividualMedicare Advantageenrollment increased by 11% (to nearly 22 million beneficiaries). The largest plans are getting bigger by increasing their product line and marketing spend. In particular, their wider offering of PPO, D-SNP and C-SNP plans allows them to better target and acquire specific beneficiary segments (i.e., LIS, chronic, dual, PDP-to-MAPD and Medigap-to-MAPD converters) across all enrollment periods.
Medicare Advantage Growth
Individual Medicare Advantage enrollment increased by 11% to 22 Million Beneficiaries.
The Big Plans are Getting Bigger
The big plans are getting bigger by increasing their product line and marketing spend. In particular, their wider offering of PPO, D-SNP and C-SNP plans allows them to better target and acquire specific beneficiary segments (i.e., LIS, chronic, dual, PDP-to-MAPD and Medigap-to-MAPD converters) across all enrollment periods. Their challenge in AEP 2022 is how to improve lead targeting and quality to increase member persistency.
Startups are Gaining Ground
Although still relatively small, new entrants like Alignment, Clover and Devoted are rapidly growing membership with simplified and highly competitive plan designs, such as $0 to low premium PPO, low copay and market matching extra benefits. Their challenge in AEP 2022 is to smartly target expansion markets and quickly adapt to local distribution norms to continue their growth.
Local Plans are Struggling
Local plans are being squeezed by national plans gaining share by introducing higher benefit and lower premium plans and startups testing and implementing simplified plans with market matching benefits and innovative member engagement programs to keep them loyal and less likely to shop. Their challenge in AEP 2022 is to develop more effective retention and growth strategies that take advantage of their local market expertise and large commercial group business.
MA Enrollment Growth Continues with PPO and C/D-SNP Plans Leading
The Individual Medicare Advantage market grew by 10.5% to 21.5MM. PPO and Special Needs Plans enrolled more members than other Medicare Advantage plan types. Increasing availability of and enrollments into PPO and SNP plans by national/regional plans continues. The national and startup plans are taking even more share from local plans (especially the Blue Cross Blue Shield affiliates), who struggle to compete on price, plan design and supplemental benefits.
Medigap+PDP-to-MAPD Conversion is Increasing
Significant increase in PPO enrollments (+25% or 1MM members) combined with decreasing PDP membership (-3.1% or 624k members) indicates Medigap+PDP to MAPD PPO conversion is accelerating in select states.
This trend represents significant risk to Medicare Supplement carriers (especially the Blues) whose members are increasingly switching to $0 to low premium PPO plans to save money and access extra benefits.
This trend also represents significant opportunity for PPO carriers who now have access to some 22% of Medicare beneficiaries who are still on supplement plans.
PPO plans with $0 to low premium gained more enrollments in states (In order – FL, GA, NY, TX, MI, SC, IL, VA) that also experienced the most PDP disenrollments (In order - TX, MI, NY, GA, IL, VA, SC, NY).
A key driver of Medigap to MAPD PPO conversion may be due to increasing PDP premiums and higher drug copays, especially for tiers 4 and 5 which can be significantly higher in a standalone PDP plan.
The Rx and premium savings combined with extra benefits like dental, vision and hearing bound by MOOP makes for a compelling value proposition for the $0 to low premium PPO plan.
Medicare Advantage (MA), or Part C, plans are offered by private companies that contract with Medicare to provide Part A and Part B benefits to enrollees. Most plans also provide Part D prescription drug coverage. The most common types of MA plans are health maintenance organizations (HMOs) and preferred provider organizations (PPOs).
In 2020, approximately 37 percent of Medicare beneficiaries were enrolled in a MA plan.
Enrollment in MA plans has grown steadily since 2010. Over the past decade, the number of beneficiaries in an MA plan rose from about 11 million to nearly 25 million, a 115 percent increase.
The Commonwealth Fund’s Medicare Data Hub provides up-to-date facts, research, and analyses about Medicare, a program that provides health coverage to more than 60 million Americans — about one in six people — including older adults, people with serious disabilities, and other vulnerable individuals.
A resource for policymakers, researchers, health care providers, consumer advocates, and journalists, the data hub is intended to spark and inform discussion about issues that affect health care for Medicare beneficiaries and other Americans.
2021 Medicare Parts A & B Premiums and Deductibles
On November 6, 2020, the Centers for Medicare & Medicaid Services (CMS) released the 2021 premiums, deductibles, and coinsurance amounts for the Medicare Part A and Part B programs.
Medicare Part B Premiums/Deductibles
Medicare Part B covers physician services, outpatient hospital services, certain home health services, durable medical equipment, and certain other medical and health services not covered by Medicare Part A.
Each year the Medicare premiums, deductibles, and coinsurance rates are adjusted according to the Social Security Act. For 2021, the Medicare Part B monthly premiums and the annual deductible are higher than the 2020 amounts. The standard monthly premium for Medicare Part B enrollees will be $148.50 for 2021, an increase of $3.90 from $144.60 in 2020. The annual deductible for all Medicare Part B beneficiaries is $203 in 2021, an increase of $5 from the annual deductible of $198 in 2020.
The Part B premiums and deductible reflect the provisions of the Continuing Appropriations Act, 2021 and Other Extensions Act (H.R. 8337).
CMS is committed to empowering beneficiaries with the information they need to make informed decisions about their Medicare coverage options, including providing new tools to help them make those decisions through the eMedicare initiative. In addition to the recently released premiums and cost sharing information for 2021 Medicare Advantage and Part D plans, we are releasing the premiums and cost sharing information for Fee-for-Service Medicare, so beneficiaries understand their options for receiving Medicare benefits. As previously announced, average 2021 premiums for Medicare Advantage plans are expected to decline 34.2 percent from 2017 while plan choices, benefits, and enrollment continue to increase. The Medicare Advantage average monthly premium will be the lowest in fourteen years (since 2007). Premiums and deductibles for Medicare Advantage and Medicare Part D Prescription Drug plans are already finalized and are unaffected by this announcement.
Medicare Part B Income-Related Monthly Adjustment Amounts
Since 2007, a beneficiary’s Part B monthly premium is based on his or her income. These income-related monthly adjustment amounts affect roughly 7 percent of people with Medicare Part B. The 2021 Part B total premiums for high-income beneficiaries are shown in the following table:
Premiums for high-income beneficiaries who are married and lived with their spouse at any time during the taxable year, but file a separate return, are as follows:
Medicare Part A Premiums/Deductibles
Medicare Part A covers inpatient hospital, skilled nursing facility, and some home health care services. About 99 percent of Medicare beneficiaries do not have a Part A premium since they have at least 40 quarters of Medicare-covered employment.
The Medicare Part A inpatient hospital deductible that beneficiaries will pay when admitted to the hospital will be $1,484 in 2021, an increase of $76 from $1,408 in 2020. The Part A inpatient hospital deductible covers beneficiaries’ share of costs for the first 60 days of Medicare-covered inpatient hospital care in a benefit period. In 2021, beneficiaries must pay a coinsurance amount of $371 per day for the 61st through 90th day of a hospitalization ($352 in 2020) in a benefit period and $742 per day for lifetime reserve days ($704 in 2020). For beneficiaries in skilled nursing facilities, the daily coinsurance for days 21 through 100 of extended care services in a benefit period will be $185.50 in 2021 ($176.00 in 2020).
Enrollees age 65 and over who have fewer than 40 quarters of coverage and certain persons with disabilities pay a monthly premium in order to voluntarily enroll in Medicare Part A. Individuals who had at least 30 quarters of coverage or were married to someone with at least 30 quarters of coverage may buy into Part A at a reduced monthly premium rate, which will be $259 in 2021, a $7 increase from 2020. Certain uninsured aged individuals who have less than 30 quarters of coverage and certain individuals with disabilities who have exhausted other entitlement will pay the full premium, which will be $471 a month in 2021, a $13 increase from 2020.
For more information on the 2021 Medicare Parts A and B premiums and deductibles (CMS-8074-N, CMS-8075-N, CMS-8076-N), please visit:
Most people don't pay a monthly premium for Part A (sometimes called "premium-free Part A"). If you buy Part A, you'll pay up to $458 each month in 2020 ($471 in 2021). If you paid Medicare taxes for less than 30 quarters, the standard Part A premium is $458 ($471 in 2021). If you paid Medicare taxes for 30-39 quarters, the standard Part A premium is $252 ($259 in 2021).Part A hospital inpatient deductible and coinsurance
$1,408($1,484 in 2021) deductible for each benefit period
Days 1-60: $0 coinsurance for each benefit period
Days 61-90: $352 ($371 in 2021) coinsurance per day of each benefit period
Days 91 and beyond: $704 ($742 in 2021) coinsurance per each "lifetime reserve day" after day 90 for each benefit period (up to 60 days over your lifetime)
Beyond lifetime reserve days: all costs
Part B premium The standard Part B premium amount is $144.60 ($148.50 in 2021) (or higher depending on your income).
Part B deductible and coinsurance $198 ($203 in 2021). After your deductible is met, you typically pay 20% of the Medicare-approved amount for most doctor services (including most doctor services while you're a hospital inpatient), outpatient therapy, and durable medical equipment (dme)
Part C premium The Part C monthly premium varies by plan.
Part D premium The Part D monthly premium varies by plan (higher-income consumers may pay more).
Marketing for 2021 Annual Enrollment Period - Reminder
The 2021 Annual Enrollment Period (AEP) is just around the corner, starting on October 15th and ending on December 7th 2020. It is important to remember that The Centers for Medicare & Medicaid Services (CMS) do not allow any marketing for AEP to take place before October 1st. "Marketing" includes the following examples:
Contacting consumers to solicit an appointment.
Completing an enrollment application.
Hosting or advertising an event where 2021 plans will be discussed.
Talking about 2021 plan rates, options or benefits over the phone or during an appointment.
Obtaining a 2021 Scope of Appointment.
Sharing content regarding AEP on social media or via email.
Rule of thumb: If the purpose of the marketing activity is to eventually solicit an appointment for AEP, per CMS, it is NOT acceptable before October 1st 2020. If an agent is found to be marketing for AEP before October 1st, the agent could be penalized from the insurance carrier being marketed, or from CMS.
It is a good idea for agents to take this time before October 1st to work on certifications and becoming Ready to Sell for the 2021 AEP season. Save all marketing efforts for after October 1st.
The cost-sharing chart below covers what beneficiaries with Medicare Part D will pay for prescription coverage in each phase in 2021. This includes:
A deductible of up to $445 (this deductible varies by plan).
25% of the costs of their prescription drugs in the Initial Coverage Period (or up to $1,032.50 if they are in a plan with no deductible).
Up to $6,550 out-of-pocket expenses before the beneficiary reaches the Catastrophic Benefits Period. Once they hit this threshold, the Medicare beneficiary will pay either 5% coinsurance or $3.70 copay for generic medications, and $9.20 for brand-name drugs.
*Most Part D plans are not standard plans. This means calculating TrOOP costs during the initial deductible and ICP varies by plan. Source: 2021 Call Letter (p. 71) at: 2021 Call Letter.