Will CMS Policy Changes Have an Impact on the Healthy Age-in Market?
For many years Deft Research studies have shown that persons who are aging into Medicare coverage are equally likely to gravitate toward Supplemental Medicare (aka, Med supp) products and Medicare Advantage (MA) products. The primary reasons for Medsupp remaining attractive despite its price disadvantage are its unrestricted access to doctors and hospitals, and the simplicity of coverage terms leading consumers to feel more certain about what they are buying. Suspicion and lack of trust in Medicare Advantage’s detailed list of provisions and restrictions drives many away.
But in coming years, Medicare Advantage product designers will have opportunities to restore trust among consumers. And if they do, they will steer more market share toward these plans. For the MA 2019 contract year, the Centers for Medicare and Medicaid Services (CMS) has promulgated new policies allowing MA plans to offer more supplemental benefits and allow more flexibility in how benefits are offered. The new policies create opportunities for MA plans to meet a wider set of consumer needs. However, getting consumers to react to the term “coordinated care” and communicating health care value to consumers is difficult. It remains to be seen whether those new to Medicare – the age-ins – will recognize the value and be more likely to select MA over Medsupp.
From a high altitude, the new policies enable MA plans to include supplemental benefits in their health plan designs. This conjures visions of greater care coordination, more differentiated products, stronger relationships with providers, and increased opportunities to promote wellness and reduce costs.
CMS outlines two sets of criteria for supplemental benefits to be accepted as health-related and appropriate for inclusion in an MA package. A supplemental benefit must be “used to diagnose, prevent or treat an illness or injury, compensate for physical impairments, act to ameliorate the functional/psychological impact of injuries or health conditions, or reduce avoidable emergency and health care utilization.” Secondly, the benefit must be “medically appropriate, focus directly on the enrollee’s health care needs and be recommended by a physician or licensed medical professional as part of a care plan.”
In advance of the June bids, there were several areas of supplemental benefits that CMS stressed (and no doubt these were subsequently emphasized in the health plan bids submitted).
MA companies are excited about the CMS allowance of greater flexibility on offering benefits.
For health plans, this means benefits can be offered to targeted populations, and generate a greater return on investment. This prompts greater sustainability of programs. Health plans will be able to reduce cost sharing for certain covered benefits, offer tailored supplemental packages targeted for specific populations, and reduce deductibles for beneficiaries that meet specific medical criteria.
Other supplemental benefits exist beyond what is outlined here. Many of the supplementals and new flexibility CMS address the needs of consumers who are quite ill. So how could these changes affect the broader Medicare market? There are three ways that new age-ins’ can be made more likely to consider a Medicare Advantage plan.