Many of the large insurers are responding by expanding into new markets.
Enrollment in Medicare Advantage (MA) plans has doubled over the past decade, and today the insurer-run plans cover more than 24 million Americans. Almost one-third of Medicare beneficiaries are now enrolled in MA plans, and that number is expected to grow as the baby boomers age into Medicare coverage.
Insurers see a large and growing line of business in MA. For beneficiaries, the simplicity of having coverage provided by a single plan is appealing. The premiums are low — and more than half of the MA plans in the United States have no monthly premium at all. Often additional coverage (dental, hearing) and other benefits (gym memberships) are also thrown in. The trade-off for the enrollees is a narrower network of providers and sometimes some copays and coinsurance.
The growth of MA is not without its critics. They see MA’s growing share of the Medicare population as a drift toward the privatization of Medicare — or at least the management of the program. Insurers are raking in large profits because of overly generous federal government payment, they say. The rebuttal from the MA plans and their backers: MA brings the value, care coordination and focus on the social determinants of health (SDOH) that is sorely lacking elsewhere in American healthcare.
“This steady growth is likely due to the value and financial stability of these plans,” says Britta Orr, J.D., M.P.H., chief Medicare officer at Allina Health Aetna in suburban Minneapolis.
Over the years, MA plans have moved to address the physical, emotional and social needs of seniors and those eligible for Medicare because of disability, notes Susan Smith, senior vice president of the retail segment of Humana Medicare in Louisville, Kentucky. Smith mentions the gym membership, the MA perk that may be more common than important, and efforts to manage chronic health conditions. Additionally, a focus on SDOH has led to a greater emphasis on ensuring that members have enough healthy food to eat and access to programs that help them deal with loneliness and social isolation, Smith says.
MA plans may be especially attractive to people aging into Medicare who have had coverage through their employer and want to continue with the same insurer. Because Cigna has many members in its employer-sponsored plans, when these customers transition to Medicare, the insurer has the opportunity to offer continuity of care — and serve individuals throughout their lifetimes, says Aparna Abburi, president of Medicare Advantage at Cigna.
Tami Hibbitts, MBA, vice president of Medicare at Priority Health in Grand Rapids, Michigan, points to the appeal of MA coverage of preventive care, including annual health exams and a variety of screenings. Christopher Ciano, who oversees Aetna’s Medicare Advantage plans, mentions customization. “By offering access to added benefits that can be tailored to support individual members’ unique lifestyles and total health needs, these (MA) plans are often referred to as a one-stop shop,” he says.
Financial incentives — and responsibilities
The MA plans say their preventive and SDOH efforts aren’t just selling points. “MA plan offerings and robust supplemental benefits lead to better health outcomes for members,” Hibbitts says.
“It’s a win-win for everyone — the government, insurers and members,” says Andrew Toy, president and chief technology officer at Clover Health in San Francisco. “Our goal is to keep our members happier, healthier and out of the hospital.” Clover partnered with Walmart this year to market MA plans in eight counties in Georgia that give members access to services at Walmart Health clinics with no copays.
Orr says taking on the financial risk of its MA members incentivizes Allina Health Aetna to keep coverage simple, personal and affordable. “The MA model challenges private insurers to provide high-quality networks, to promote population health and prevention, and to effectively coordinate patients’ care,” she says.
Still, the MA plans are dependent on government funds and Medicare, more specifically. “We take our stewardship of taxpayer dollars very seriously,” says Cigna’s Abburi says. “MA has traditionally been a pretty low-margin business.”
As with any government program, Orr says it’s important to strike the right balance between compensating Medicare plans sufficiently for the value they deliver and driving continuous improvement to quality and efficiency metrics.
Meanwhile, insurers continue to add new services to their MA plans to make them more attractive as the competition among MA plans heats up. According to the Kaiser Family Foundation, the average Medicare beneficiary had 33 MA plans to choose from during the enrollment period for 2021 coverage, which ended on Dec. 7.
Hibbitts says Priority Health believes that being healthy goes beyond visiting a doctor when you don’t feel well — it’s about practicing healthy habits every day. Next year the company’s MA plans are giving members free access to BrainHQ and its online brain exercises designed to improve memory and overall cognitive function.
Ciano describes several innovations in Aetna’s 2021 MA plans. For example, some are removing the requirement that beneficiaries designate a primary care physician. Instead, they can visit a nationally contracted walk-in clinic or CVS MinuteClinic location — CVS owns Aetna — and pay the same copay as a regular visit to a primary care provider.
All of Aetna’s 2021 MA plans will offer an annual in-home assessment at no cost that includes a comprehensive health risk assessment and noninvasive physical exam. The clinician will also assess the home environment for potential fall risks.
Aetna is also expanding its companionship benefit to address social isolation in select plans in six states. Aetna has hired a company called Papa Inc. to connect college-age young adults with older adults who need companionship and help with light housework and technology problems. Aetna also has a number of initiatives targeting the SDOH of food insecurity, including one that gives the members of some of its plans a “healthy food” debit card that gives the member a monthly allowance to purchase approved healthy food.
Insurers in expansion mode
Insurers don’t want to miss out on MA’s enrollment growth, so they are expanding into new markets. Cigna, for example, branched out and marketed 2021 MA plans in markets in five states — Ohio, Virginia, Oklahoma, Utah and New Mexico — for the first time while also expanding into new markets in states where it already has a presence.
When mapping out its expansion plans, Humana identifies areas where people with Medicare may be underserved with current offerings. “We’re already one of the largest MA organizations in the country based on membership, so there aren’t as many places for us to expand,” notes Smith. UnitedHealthcare has also gone into expansion mode, marketing 2021 MA plans in 291 additional counties. This is the company’s largest MA expansion in five years, according to Steve Warner, senior vice president of Medicare Advantage at UnitedHealthcare Medicare & Retirement.
Karen Appold is a medical writer in the Lehigh Valley region of Pennsylvania.