2024 Payer Strategies: Population-Based Plans, MA Differentiation

By Kelsey Waddill

January 02, 2024 - The new year may look remarkably like 2023 from the payer perspective with a similar set of headwinds, but payer strategies may change. Health insurers will build on last year’s progress in health equity, care delivery, and other industrywide objectives with a few key strategies.

“Increasing healthcare costs, difficulty accessing and navigating care, and a growing need for convenience drive people to demand more value, and employers to demand more value too, and people needing and wanting care that meets their needs for preferences,” Heather Dlugolenski, senior vice president of commercial strategy and solutions at Cigna Healthcare, explained to HealthPayerIntelligence.

“And at the same time, data and technology are creating a lot of bright spots for even more potential power for healthcare system transformation in order to drive access, engagement, and innovation.”

As payers navigate these challenges and opportunities, eight major themes surfaced. Leaders from five health plans, including two Medicare Advantage plans, offered their expectations for the prevailing health insurance industry strategies and trends in 2024.

Health equity efforts will revolve around partnerships, personalization

In 2024, health plans will continue to fortify relationships with providers that produce equitable outcomes. They will also implement greater personalization to ensure that underserved communities receive appropriate, high quality care.

Payers will continue to use direct investments to fuel health equity efforts in 2024, Laura Carr, director of provider performance at Blue Cross Blue Shield of Massachusetts (Blue Cross MA), predicted. Specifically, Carr named two areas in which payers will invest in the new year.

Health plans will continue to put funds into data collection related to equity. Accurate member data is key for understanding the potential needs of a member population and for targeting health equity efforts effectively. However, data collection can be challenging, particularly in the case of racial and ethnic disparities. Payers will invest in strong data collection methods to boost their overarching equity strategy.

Additionally, payer funds will go toward care delivery systems that demonstrate equitable outcomes. Carr explained that this approach requires both collaborating with providers and establishing reimbursement structures to incentivize health equity, even amid the challenges the healthcare industry currently faces.

To that end, Blue Cross MA added health equity measures to the payer’s value-based payment contracts. Carr encouraged other payers to do the same.

Care navigation tools, strategies key to overcoming complexity

Healthcare’s complexity—both in the provider and the insurance world—continues to pose problems for healthcare consumers.

In 2024, payers will adopt advocacy solutions to reinforce their care navigation strategies, Samantha Baker, chief consumer officer for commercial business at UnitedHealthcare, predicted.

“Advocacy solutions are designed to help people make more informed health care decisions and more efficiently navigate the health system, including to stay in network, assist with hospital discharge planning and support, and review potential treatment and medication options based on coverage considerations,” she explained.

Additionally, payers may leverage comparison shopping to simplify care navigation, sharing cost and coverage information with consumers. For example, Surest, one of UnitedHealthcare’s commercial plans, features a digital experience and upfront pricing which resulted in higher preventive care utilization, fewer hospital and emergency room visits, and higher virtual care utilization.

By simplifying the process for comparing plans and accessing cost information, consumers can select higher-quality care and accommodate their financial circumstances.

Dlugolenski noted that it is not enough to have various forms of care delivery—such as virtual care—accessible to improve care navigation. Payers must take advantage of member touchpoints that allow them to direct members to the appropriate sites of care. Employers and health plans can work together to place nudges at optimal places along the patient journey.

Cigna accomplishes this through a hospital specialty program. The model connects patients who need infusions with convenient infusion centers and other care sites that do not cost as much as a hospital. By guiding the patients to these centers or to home healthcare services, the program seeks to reduce the complexity of finding an infusion site while also driving lower costs.

Employer partnerships, waiving costs may improve affordability

The rising healthcare prices have been a constant concern in the healthcare community and among consumers. Unfortunately, in 2024, the weight of higher spending will remain. Health insurers will have to take steps alongside their employer partners to shield patients from these increases.

In the commercial space, payers will need to incentivize chronic disease management and preventive care among employees.

In particular, Baker noted that payers can waive cost-sharing for specific medications or certain types of care visits, such as virtual care appointments, in order to incentivize healthy behaviors and reduce costs over time.

Many employers and payers use reward programs to incentivize employees to use lower-cost care or pursue preventive care strategies, such as UnitedHealthcare’s reformed rewards program. The program’s design rewarded short-term goals, leveraged a broader definition of “wellness,” and emphasized employee choice.

Sandhya Rao, MD, chief medical officer at Blue Cross MA, explained that health plans will need to prioritize convenience and affordability for high-demand services. These include lower cost, accessible mental health and primary care options.

Prescription drug prices are a key inflator for healthcare costs, with national prescription drug spending increasing 8.4 percent in 2022. Payers will need to leverage partnerships and collaborations to make medications affordable for consumers.

“With medical and pharmacy services and economic factors (inflation, labor shortages, etc.) driving cost increases, new partnerships and collaborations designed to lower prices will go a long way to support families and businesses,” Rao underscored.

Care delivery will require a care ecosystem

In the wake of the coronavirus pandemic which rapidly pivoted care to remote and virtual channels, care delivery will shift to a hybrid and integrated approach in 2024.

Dlugolenski expected payers to leverage retail health clinics, freestanding emergency rooms and infusion centers, virtual care, diagnostic and testing centers, and other digital health tools to improve access to care and the quality of care delivery.

For example, Cigna will continue to provide a wide scope of healthcare services virtually through MDLIVE. The payer incentivizes employers to utilize hybrid care, mixing MDLIVE’s capabilities with in-person care delivery, through its plan designs.

By taking a hybrid approach, Cigna saved $118 per urgent care episode. MDLIVE urgent care use often results in lower dependency on lab work and similar services.

Similarly, Aetna is developing a connected care delivery ecosystem that will ensure better chronic disease management and access to care, Terri Swanson, president of Medicare for Aetna, shared.

“Today, a majority of the more than 31 million older adults and people living with disabilities enrolled in a Medicare Advantage plan have one or more chronic conditions. Health plans need to offer their Medicare Advantage members access to care where they want to receive care,” she said.

Population-based plans, benefits will propel value-based care

Value-based care alignment remains a primary objective among health plans. Employers and payers may accelerate value-based care adoption and implementation through creating health plans that target specific populations.

For example, UnitedHealthcare established its Level2 health plan for self-insured employers around benefits specially designed to serve employees with type 2 diabetes, Baker shared. Wearable technologies, like continuous glucose monitors, help members and their providers track symptoms. Members also have access to Level2 Specialty Care.

The plan aims to improve affordability for employers and employees alike. Members experience a lower cost barrier for their type 2 diabetes care with zero-dollar cost-sharing on diabetes care. Meanwhile, employers shoulder less financial risk because UnitedHealthcare takes on that responsibility.

“This solution reduces the employer’s overall cost of care by improving health outcomes and avoiding costly complications of unmanaged type 2 diabetes, as well as by reducing the reliance on medications,” Baker explained.

Population-based plans could be particularly effective and profitable for Medicare Advantage plans as they try to stand out. These tailored plans provide ample opportunity for payers to differentiate their Medicare Advantage offerings, shared Sachin Jain, MD, chief executive officer of SCAN Group and SCAN Health Plan (SCAN).

SCAN is well-acquainted with the population-based health plan approach.

In 2022, the payer launched “Affirm”, a Medicare Advantage plan for LGBTQ+ seniors, in partnership with Included Health, a provider group led by LGBTQ+ providers. Together, they offer benefits like peer groups, lower copays for gender-affirming treatments and HIV medications, companion care services, and legal services reimbursement.

In 2023, the payer partnered with ApolloMD to build “Compass,” focused on the provider's largely Asian and Hispanic American patient population. Later that year, SCAN launched "Inspired", a plan to accommodate women in Medicare Advantage. The benefits include access to a women’s health coach, providers in a center of excellence for women's health, and estrogen therapy at no cost.

“What we're really trying to do is partner specifically with providers around specific populations that they are eager and excited to serve and then build product benefit and network designs that really align with that,” Jain explained.

Medicare Advantage plans will focus on differentiation

As the Medicare Advantage market reaches peak levels of saturation, plans will have to work harder to set themselves apart from one another.

Consequently, the market may be heading toward quality-related differentiation. Often healthy members choose their plans based on edge benefits but are disappointed in the quality of care when they get sick, Jain indicated. Benefits are important but quality of care is what will retain consumers.

Differentiation based on quality will be more challenging in 2024 with the changing Medicare Advantage star rating methodology. The number of 5-star rated Medicare Advantage contracts dropped from 87 plans in 2022 to 36 plans in 2023, falling for the second consecutive year.

Greater scrutiny of Medicare Advantage plans’ practices and more stringent star ratings methodologies means not only that fewer plans get high scores but also that plans will receive lower reimbursement in the coming year. As a result, Jain said that plans will have to learn to do more with less.

To create quality-centered differentiation, payers will need to reinforce their provider relationships. They will have to acknowledge providers’ challenges—including rampant workforce shortages—and partner with them to find solutions.

Moreover, Medicare Advantage plans must recenter themselves on the mission of Medicare Advantage. That means establishing practices that focus on keeping members healthy, preventing adverse events and hospital visits, and driving care to physicians’ offices.

Medicare Advantage plans will encourage maximizing benefits

In 2024, Jain expected that Medicare Advantage plans may reckon with the shallow promises of supplemental benefits.

“We've seen a boom in supplemental benefits, but one of the dirty little secrets of this industry is that the reason that many plans are able to offer so-called high degrees of benefits is because there are low utilization rates of those benefits,” Jain explained.

“All of these things sound great and we say that they're available to everyone, but the pricing of them is really based on the fact that we know that a small number of people are going to use them.”

The responsibility for ensuring that members maximize their benefits rests on health plans. Creating highly tailored benefits that promote the welfare of target populations and removing any barriers to those benefits—including but not limited to eradicating unnecessary prior authorizations—will help facilitate better benefit utilization, shared Jain.

Swanson agreed that health insurers can do more to help Medicare Advantage members maximize their benefits. She recommended that Medicare Advantage plans connect members with their primary care physicians as a first step toward increasing benefit utilization.

With primary care physicians at the center of a member’s care, patients are more likely to be engaged in their own health and lower utilization of low-value care. For instance, a study of 504,471 Medicare beneficiaries showed that primary care visits reduced spending on and utilization of acute care.

Medicare Advantage will continue offering SDOH benefits

Although members’ awareness of these benefits might be low, plans will continue offering social determinants of health benefits in 2024.

Swanson indicated that addressing food insecurity will remain a priority for health plans in the new year.

Extending healthy food allowances that give members extra cash to purchase produce and other healthy options is one way Aetna and other payers break down affordability barriers. Over eight out of ten Aetna Medicare Advantage plans deliver free, healthy meals after inpatient or skilled nursing facility stays.

Some payers’ allowances can also be used to cover gas, over-the-counter products, or other costs that may prevent members from accessing care.

Keeping out-of-pocket healthcare spending maximums low is another strategy that allows low-income beneficiaries—who make up around 40 percent of the Medicare Advantage population—to overcome social determinants of health barriers. Jain noted that the SCAN Classic plan adopted this approach to offer members more income security and better predictability of healthcare costs.

With 2023 in the rearview mirror, payers will continue pursuing value-based care and health equity as well as optimizing their Medicare Advantage plans with these key strategies.

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