- Payers striving to compete in the Medicare Advantage (MA) market can add more value to their health plans by taking advantage of regulatory changes established under a new final rule.
Starting in plan year 2019, payers can offer a greater variety of Medicare Advantage plans with more variation of health benefits, specialized cost-sharing designs, and additional opportunities for member engagement.
CMS believes that these changes will help payers create a better Medicare Advantage experience for their members and address beneficiary healthcare challenges related to affordability and patient outcomes.
Health plans that combine chronic disease management benefits with effective member engagement strategies could stand out from competitors in the Medicare Advantage market. Healthcare payers that currently offer Medicare Advantage products, or plan to enter the market for 2019, should explore potential ways to expand MA value.
Customizing preventive care and chronic disease management benefits
The new rule allows payers to add supplemental benefits such as increased frequency and variation of preventive screenings and exams based on a beneficiary’s health conditions.
CMS explained in the final rule that payers could adjust preventive benefits such as expanding the number of foot or eye exams for diabetic members. Chronic diseases are common in Medicare populations, and adding expanded preventive care options may help members manage their conditions more effectively.
The latest national statistics on chronic disease prevalence in the Medicare program found that 54 percent of beneficiaries experience hypertension. Nearly 26 percent of Medicare beneficiaries have diabetes and 30 percent have arthritis.
In addition, Medicare beneficiaries with at least one chronic condition are likely to have additional chronic diseases.
Thirty-five percent of diabetic Medicare beneficiaries had five or more chronic diseases and 50 percent of beneficiaries with Alzheimer’s disease also had five or more conditions.
The final rule also encourages payers to adjust benefits to address social determinants of health.
Addressing social determinants of health have allowed payers like Humana to improve Medicare chronic disease outcomes by targeting community and environmental factors that may contribute to poor health.
Payers can use zip code data to identify issues such as food insecurity, transportation, and housing that are linked to health outcomes. The rule allows payers to create benefits that provide groceries, transportation, and other services to improve community health factors.
Adjusting cost-sharing and deductible for Medicare Advantage plans
Payers should also take advantage of provisions that allow customization of cost-sharing and member deductibles for Medicare Advantage members.
The new rule permits payers to adjust cost-sharing for preventive care and healthcare services related to a member’s health conditions.
Beneficiaries in the Medicare program are likely to experience financial strain when it comes to healthcare spending. Kaiser Family Foundation research found that members with traditional Medicare spend an average of 20 percent of their annual income on healthcare. That number could increase if members are retired, not able to work, or live off a predetermined budget.
Payers could add value to Medicare Advantage plans by removing financial barriers for a beneficiary’s most pressing healthcare needs.
Commercial payers with large Medicare Advantage populations capitalize on valuable cost-sharing benefits for members and could provide lessons for other payers.
Harvard Pilgrim provides Medicare Advantage plans with $0 co-pays for prescription drugs and imaging tests as well as reduced co-pays for provider visits. Humana offers multiple Medicare Advantage plans that are designed with $0 premiums, $0-$10 co-pays, and no annual deductible to encourage higher enrollment.
Increasing health plan variety and member engagement
The rule also encourages payers to provide several types of Medicare Advantage plans by removing meaningful difference requirements.
Without meaningful difference requirements, payers will be able to promote new member engagement strategies and help beneficiaries choose an appropriate Medicare Advantage plan.
“CMS noted that more sophisticated approaches to consumer engagement and decision making should help beneficiaries, caregivers, and family members make informed plan choices,” the agency said.
Medicare Advantage payers could capitalize on this opportunity by utilizing effective member engagement strategies.
Payers could use technology and digital communication platforms to effectively relay benefit and plan options for beneficiaries. Leveraging health plan data is also a powerful tool to tailor benefit communications/marketing materials to members.
The Medicare Advantage market has gained significant momentum at the start of 2018 and could experience even more growth under the final rule. Payers need to determine which Medicare Advantage flexibles will provide the best possible value within a profitable, but competitive, market.