Radar on Medicare Advantage

As Medicare Advantage insurers face revenue headwinds driven by changes to risk adjustment, Star Ratings and benchmark rates, one overarching question at recent conferences and webinars has been, how will MA plans do more with less? Medicare beneficiaries in recent years have flocked to MA largely because of rich benefit offerings they can’t get in fee-for-service Medicare, and they have grown accustomed to items like comprehensive dental, flex cards and fitness benefits. But as the June 3 bid deadline approaches, insurers are considering what benefits they may have to tweak and how they’ll market those benefits to consumers for 2025.

During an April 3 webinar cohosted by Deft Research and Rebellis Group, Deft Vice President of Client Services Rob Lourenço said the market is already showing signs of revenue changes trickling down to the consumer. In its latest Medicare Shopping and Switching Study, Deft observed a slight “pullback in certain benefits” and at a high level saw more removals of benefits than additions this year. Comparing plans that were offered in both 2023 and 2024, Deft saw that routine eye exam coverage remained stable, while 4% of plans removed eyewear coverage and 1% added the benefit, resulting in a net decline of -3% for eyewear access.

Millions of seniors report needing long-term services and supports that can assist with daily activities and disease management, but many don’t qualify for Medicaid, the primary source of LTSS coverage. Medicare Advantage plans have stepped up to fill in the gap with “LTSS-like” supplemental benefits, which range from select Special Supplemental Benefits for the Chronically Ill such as home modifications and service dog support, to Expanded Primarily Health-Related Benefits, including adult day services, in-home support services and caregiver support.

New research from ATI Advisory explores who has access to and ultimately enrolls in MA plans that offer LTSS-like supplemental benefits. The analysis of CMS data found that 82% of Medicare-only beneficiaries (i.e. those who are not dually eligible for Medicaid) have access to at least one plan that offers at least one LTSS-like benefit. Despite the wide availability of LTSS-like plans — particularly in high-population urban areas — just 9% of beneficiaries are enrolled in them, representing about 2 million people.

Medicare Advantage plan design — particularly the cost of premiums — has a major influence on who chooses to enroll. The variance in that enrollment mix can have a big impact on outcomes and utilization, according to a new white paper from Inovalon and Harvard Medical School. Using Inovalon’s Medical Outcomes Research for Effectiveness and Economics Registry dataset, which tracks demographic and outcomes information for about 30% of the MA population at any given time, researchers found that socioeconomically disadvantaged populations were more attracted to MA, especially zero-premium products.

“Our research challenges the misconception that Medicare Advantage is a monolith, revealing significant differences in plan designs and features and how those variables affect enrollment and outcomes,” Boris Vabson, Ph.D., a health economist at Harvard Medical School and co-lead researcher on the project, said in an April 8 statement released alongside the research.