Radar on Medicare Advantage
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Rumored ‘Cigmana’ Combo Presents MA Overlap, PBM Concerns
Just a few weeks after reports surfaced that The Cigna Group was looking to offload its Medicare Advantage business, reports emerged of a possible transaction with Humana Inc. that would create a diversified health insurance giant in the same weight class as CVS Health Corp. and UnitedHealth Group. Wall Street analysts agreed such a deal would invite scrutiny from regulators, partly because of Cigna’s substantial MA overlap with Humana, although multistate Blues insurer Health Care Service Corp. (HCSC) is reportedly interested in picking up Cigna’s MA book. To complete the square dance, rumors have also resurfaced of Walmart’s interest in purchasing Humana.
Reuters on Nov. 6 first reported that Cigna was exploring a sale of its MA business, which represents about 3% of its overall medical membership. Sources told the news outlet that the insurer was working with an investment bank to evaluate its options and that the potential sale could bring in several billions of dollars. Analysts at the time suspected that the move was an effort to preempt the intense antitrust scrutiny Cigna might face if it sought to merge with a government-focused firm such as Humana or Centene Corp.
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As CMS Pushes More Duals Integration, D-SNP Market Keeps Growing
Leading up to the 2024 Annual Election Period (AEP) that started on Oct. 15 and concluded on Dec. 7, major Medicare Advantage insurers unveiling geographic expansions signaled their continued pursuit of dually eligible Medicare-Medicaid beneficiaries. A new analysis of the 2024 Special Needs Plan landscape confirms that more SNPs designed specifically for dual eligibles will be available next year, while interest in Institutional SNPs (I-SNPs) appears to be waning after experiencing a short burst of growth. The Chronic Condition SNP (C-SNP) market, meanwhile, will remain relatively stable.
There will be 1,368 SNPs on the market in 2024, compared with 1,320 in 2023 — a modest increase compared with the 10% jump between 2022 and 2023, according to the analysis from Clear View Solutions, LLC. Within the total, however, Clear View observed a notable increase in the number of D-SNPs. In 2024, there will be 874 D-SNPs available — including 698 plans that were available in 2023 and 176 new plans — compared with 809 in 2023 and 401 in 2018, before the Bipartisan Budget Act (BBA) of that same year granted permanent authorization to all SNP types. There are also more D-SNPs being added than dropped next year, which could be due to some plan consolidation, observes Clear View.
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Top Payers Still Dominate as SNP Market Expands at Rapid Pace
From 2017 to 2023, the number of people enrolled in Special Needs Plans (SNPs) grew by more than 150% to about 6.3 million lives, according to the latest update to AIS’s Directory of Health Plans. Dual Eligible SNPs (D-SNPs) saw the most growth, a mammoth 170% increase to 5.6 million lives, followed by Institutional SNPS (I-SNPs) at 86% growth, then Chronic Condition SNPs (C-SNPs) at 58% growth.
Payers have grown to meet that surge, with the total number of SNP offerings expanding from 498 to 1,082 plans between 2017 and 2023, per an analysis of CMS’s Landscape files from Clear View Solutions, LLC. Clear View’s data shows that in a typical year, the number of new SNP offerings has exceeded the number of plans dropped.
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Fast-Growing MA Supplemental Benefits Support Aging in Place
Insurers are more carefully tailoring their preventive supplemental benefit offerings to support Medicare Advantage enrollees aging in place, with benefits such as home and bathroom safety modifications more than doubling between 2023 and 2024, according to a new Faegre Drinker analysis of Plan Benefit Package (PBP) data. But as CMS takes steps to gather more data on supplemental benefits, less impactful benefits could be thinned from the pack while those with greater potential to improve health outcomes are embraced by insurers.
Faegre Drinker has been tracking the growth of supplemental benefits since 2021, when MA insurers were in the early days of experimenting with new offerings under CMS’s reinterpretation of “primarily health related” supplemental benefits. The latest analysis, published on Dec. 5 and shared in advance with AIS Health, focuses on the preventive supplemental benefit market due to the large variance in uptake, with some benefits offered by fewer than 100 plans and others featured in more than 5,000 PBPs. This year, Faegre Drinker split the categories into two types: popular (i.e., offered by more than 1,000 plans) and less popular (i.e., those offered by fewer than 1,000 plans).
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News Briefs: HHS Looks to Improve MA Transparency by Gathering Consumer Data
As part of new actions to lower health care and prescription drug costs by promoting competition, the Biden administration on Dec. 7 said it aims to further improve Medicare Advantage transparency. Noting that the MA program now serves roughly half of Medicare-eligible beneficiaries, the Biden administration in a fact sheet said it is committed to ensuring that MA plans “best meet the needs of people with Medicare, there is timely access to care, and the market has healthy competition.” Therefore, early next year HHS will solicit from the public “programmatic data” to better understand “the effects of market shifts on consumers and care outcomes.” When asked during a Dec. 6 press call for more details on this effort, a senior administration official responded: “We’ll be seeking additional information that will allow the agency to explore new policies and learn more about this really important program for seniors and people with disabilities.” Additionally, the administration said it will build on recent steps “[c]racking down on anticompetitive and anti-consumer practices” in MA and continue to implement updates to MA payment “that improve payment accuracy, address gaming, and recover overpayments.”
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