Despite the acceleration of U.S. COVID-19 cases in March — the third and final month of the Medicare Open Enrollment Period — switching rates among Medicare Advantage beneficiaries during the 2020 OEP were similar to last year’s at 5%, according to new survey results from Deft Research. But with CMS extending certain enrollment flexibilities and the pandemic’s potential impact on in-person interactions, industry experts advise MA plans to have a strong communications strategy in place with existing members while preparing for a more digitally based Annual Election Period (AEP) than the industry has ever seen.
The three-month OEP, reinstated in 2019 after a long hiatus, is available only to MA enrollees who want to make a one-time coverage change from what they selected during the AEP. Its return created enough uncertainty among insurers that “carriers and agencies took it seriously” in their responses both this year and last, observed Deft’s senior vice president of client services, George Dippel, in an executive brief released earlier this month on the firm’s 2020 Medicare Open Enrollment Study.
While some cities and states make moves to safely “reopen” as new COVID-19 cases taper off, New York City remains very much the epicenter of the pandemic in the U.S. And as health plans around the country have pivoted to serve vulnerable members via telehealth and other remote options, some members still require home-based visits and personal interactions to assist with activities of daily living.
VNSNY CHOICE Health Plans is on the front lines of this crisis. Established in the 1990s by the Visiting Nurse Service of New York — the largest home- and community-based care management organization in the New York metropolitan area — VNSNY CHOICE coordinates care for about 26,000 Medicare-Medicaid beneficiaries in the five boroughs of New York City and Nassau, Suffolk and Westchester counties, where the death toll as of mid-May had surpassed 20,000. Its product lines include a Fully Integrated Dual Eligible Special Needs Plan, a statewide managed long-term care plan for dual-eligible enrollees who are chronically ill or disabled and who wish stay in their homes and communities, and a special needs plan for Medicaid recipients living with HIV.
House Democrats’ latest pandemic-relief package, the Heroes Act (H.R. 6800), has been noted in the mainstream media for its $3 trillion price tag, the uphill battle it faces in the Senate, and a string of items it contains that appear to be unrelated to the COVID-19 outbreak. But it also includes some key provisions aimed at strengthening the Medicare and Medicaid programs that could impact insurers.
Introduced by House Democrats on May 12 and passed largely along party lines by a vote of 208-199 on May 15, the Heroes Act seeks another temporary increase to the Federal Medical Assistance Percentages (FMAP) and support for home- and community-based services (HCBS) that are often the target of Medicaid budget cuts. The Families First Coronavirus Response Act enacted in March already raised the FMAP by 6.2% for non-expansion beneficiaries for the duration of the public health emergency, and the Heroes Act seeks to raise that by another 7.8% for a combined 14% increase for each quarter through June 2021.
✦ Molina Healthcare, Inc. on April 30 said it entered into a definitive agreement to purchase Magellan Complete Care (MCC) for approximately $820 million, net of certain tax benefits. MCC is the managed care arm of Magellan Health, Inc. serving approximately 155,000 members in six states, including dual-eligible and managed long-term care individuals, according to a press release from Molina. Jefferies analysts David Styblo and David Windley said the move was unexpected and “dramatically changes” Magellan’s business mix, as the company will shed its Medicaid/duals assets to focus on growing its behavioral health, specialty pharmacy and pharmacy benefits holdings. With the addition of MCC, Molina will serve more than 3.6 million members in government-sponsored health care programs in 18 states and expects to achieve annual revenue of $20 billion. The deal is subject to federal and state approvals, among other closing conditions. Contact Styblo at email@example.com. Go to https://bit.ly/2Wx1RzD.
✦ Although first-quarter 2020 results exceeded the company’s expectations, Molina Healthcare, Inc. saw its net income decline from $198 million, or $2.99 per diluted share, a year ago to $178 million, or $2.92 per share. The company in an April 30 press release attributed those results to medical cost pressure in its Medicaid line of business early in the quarter stemming from a slightly higher-than-normal flu season, compared with “early, but largely undetected COVID-19 costs diagnosed as severe respiratory illness and pneumonia.” Its Medicaid medical loss ratio rose from 88.5% in the year-ago quarter to 88.9%, while its Medicare MLR improved from 84.7% in the first quarter of 2019 to 81.7%. Molina reaffirmed its full year earnings guidance range of $11.20 to $11.79 per share, which does not include membership increases stemming from COVID-19-related unemployment or acquisitions that have not yet closed. Visit https://bit.ly/2z7leqZ
As Medicare Advantage plans seek ways to address isolated members’ social determinants of health during the COVID-19 pandemic (see story, p. 1), new guidance from CMS allowing midyear benefit changes and other flexibilities may be a big help.
“Given the unprecedented nature of the COVID-19 emergency, these flexibilities, in general, make a lot of sense,” Michael Adelberg, a principal with Faegre Drinker Consulting and a former CMS official, says of the 10-page document issued to MA and Part D sponsors on April 21.
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