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BackgroundIn 2018 and 2019, the Centers for Medicare & Medicaid Services (CMS) expanded the types and flexibility of supplemental benefits that Medicare Advantage (MA) organizations can offer to their enrollees. The changes are dramatic because they demonstrate a shift in the underlying principles of health insurance regulation. The new CMS approach emphasizes flexibility over equality.Historically, health insurance regulators approached consumer protection through the principle of equality. Under Equality all MA's had to offer substantially the same benefits to all of the enrollees of a particular plan. This was to ensure all enrollees have access to the same care and that nobody was treated inequitably. Under the new approach, the principle of flexibility depending on need is emphasized. Not all benefits have to be offered to all enrollees of a plan -- for instance, the cost sharing for diabetics can be reduced without similar reductions being offered to other consumers. Under Flexibility supplemental benefits can be organized for the specific needs of individuals, rather than defined as one-size fits all. For example, in-home services can be delivered by medical or non-medical personnel depending on the need. According to an analysis by Milliman, for the 2021 plan year, expanded supplemental benefits are included in 575 MA plan benefits. This is a significant increase from 351 plans offering expanded benefits in 2020. We view the increase as evidence that MA plans are a responsive vehicle for designing the delivery and financing of expanded benefits. How This Shows Up When Seniors Switch Health PlansWhether 2020 MA plans offered or did not offer supplemental benefits is related to whether seniors switched from plans during last fall's Annual Election Period (AEP). The chart below provides evidence from Deft Research's 2021 Medicare Shopping and Switching Study.
The chart compares percentages of seniors who switched health plans for 2021 with those who did not. We note that the most flexible benefit, a benefit allowance, sits at the top of the chart as most often noted by switchers as missing. This supports the idea that a flexible allowance which provides some assurance of extra coverage for needs that cannot be foreseen, is highly valued by consumers. Flexibility is linked to trust and both are fundamental to the value perception.  |
More than 3 million Medicare Advantage beneficiaries chose plans for the 2021 coverage year that provide additional supplemental benefits for chronic illnesses, a major increase over the more than 1 million that signed up in 2020, a new analysis found.
The analysis, released Friday by consulting firm Avalere Health, also found the number of enrollees in MA plans that offer such benefits increased this year compared to 2020. The analysis comes as the Biden administration is likely to make social determinants of health a major priority, with supplemental benefits in MA plans an area in which to address those issues.
“Stakeholders should consider engaging with the Biden administration around their early experiences with [supplemental benefits for the chronically ill] and any policy change that could facilitate their wider adoption,” the analysis said.
The analysis found that this year, 787 MA plans are offering special supplemental benefits that range from meal delivery to pest control and virtual visits. The plans represent 16% of all plans that Avalere analyzed.
“Overall, in 2021, 15% of enrollees in non-employer MA plans are enrolled in plans offering [supplemental benefits], as compared to 6% in 2020,” Avalere said.
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The analysis also found that 86% of the total Medicare beneficiary population live in a county with at least one MA plan that offers one of the benefits.
Plans could start to offer the supplemental benefits that were not specifically health-related starting in 2020. This year, plans started offering new benefits like prescription deliveries for those who must stay home due to the COVID-19 pandemic.
“However, the number of plans offering these benefits—and associated enrollment—are relatively small compared to the most prevalent benefits,” the firm said.
The most popular supplemental benefit was meals, with 356 plans employing the benefit. The second-most popular was food and produce with 336 plans, and pest control was a benefit offered by 200 plans.
Avalere looked at the plan benefit package data from the Centers for Medicare & Medicaid Services in 2020 and 2021.
