Medicare Advantage Plans Expanding Supplemental Benefits in 2020

November 06, 2019 - Recent guidance released by CMS is enabling the expansion of supplemental benefits in Medicare Advantage plans for contract year 2020, including adult day care services, according to a new study.

The independent study conducted by actuarial consulting firm Milliman for Better Medicare Alliance (BMA), examined supplemental benefits offered by Medicare Advantage plans for the first time in 2020 or reoccurring from previous years. The benefits included day care services, home-based palliative care, in-home support services, support for caregivers of enrollees, and therapeutic massage. 

Of these benefits, the study found that 116 plans will offer more than one of these services in 2020, while none did in 2019.

In addition, benefits including non-opioid pain management increased more than eight fold and will be offered by 192 plans in 2020 compared to 22 plans in 2019.

“The growth in supplemental benefits across Medicare Advantage plans as compared to 2019 tells a remarkable story of how plans are finding new ways to care for the whole person and address social determinants of health,” Allyson Y. Schwartz, president and CEO of the BMA, stated in a press release. 

Medicare Advantage plans must cover all the benefits in fee-for-service Medicare, but the plans may also offer supplemental benefits not covered by traditional Medicare, such as reduced cost-sharing, dental, vision, and hearing. 

Prior to 2018, these supplemental benefits had to be “primarily health-related” according to CMS regulations. However, guidance released by the federal agency in 2019 and the year before provided a reinterpretation of “primarily health-related,” which enables Medicare Advantage plans to expand the scope of their supplemental benefits to include any benefit “as long as they are healthcare benefits,” researchers explained.

“These benefits not available in Traditional Medicare help enrolls to safely remain in their own homes, avoid social isolation and lead longer, healthier lives,” Schwartz explained. 

The Medicare Advantage benefits will provide critical services and supports that may make it easier for older adults with chronic conditions to stay in their homes, according to a CMS press release.

Five hundred plans will offer about 2.6 million enrollees health-related supplemental benefits such as adult day programs or caregiver supports, the press release stated. And 250 plans will offer non-medical supplemental benefits to about 1.2 million enrollees, which include transportation to the grocery store and pest control. 

Expanding opportunities for seniors to choose Medicare Advantage plans that are providing new supplemental benefits that are tailored to their specific needs will help them better maintain their health.

“Chronically ill beneficiaries enrolled in a Medicare Advantage plan that offers can now receive meal delivery in more circumstances, transportation for non-medical needs like grocery shopping, and home environment services in order to improve their health or overall function as it relates to their chronic illness,” the CMS press release stated.

CMS intended for the expansion of supplemental benefits in Medicare Advantage plans to spur competition among insurers and drive down premiums. And so far, the plan seems to be working.

The reported agency reported in September that, on average, Medicare Advantage premiums in 2020 are expected to fall by 23 percent compared to 2018 levels while plan choices, benefits, and enrollment are all slated to increase.

The significantly lower costs in Medicare Advantage premiums in 2020 ensures that seniors are able to put a little more money back into their pockets, which is an attractive aspect in the new policy, CMS explained.

“We are committed to ensuring that the 24 million Americans expected to enroll in an MA plan next year-and those who will come behind them- have access to the low cost, quality care and enhanced benefits that MA provides, Schwartz stressed.