Radar on Medicare Advantage

Approximately 2.4 million people enrolled in a Medicare Advantage plan from February 2020 to February 2021, bringing the total MA population to 26.3 million medical lives. That’s a 9.9% year-over-year increase, according to AIS Health’s analysis of data from the 2021 Medicare Annual Election Period (AEP). While the AEP was strong overall, the top 10 MA insurers continue to dominate the market, with 62.7% of all new enrollees selecting a plan from UnitedHealthcare, Humana Inc. or CVS Health Corp.’s Aetna. Meanwhile, Centene Corp.’s completed acquisition of WellCare Health Plans, Inc. allowed it to jump from No. 10 to No. 6, more than doubling its 2020 headcount. See a complete breakdown of the top 10 payers’ results below. No state saw any MA losses from 2020 to 2021, with 10 seeing increases of more than 20%, including several states with historically low penetration rates, such as Delaware, Maryland and Vermont (see map below).

While every Medicare Annual Election Period (AEP) is different, experts agree that the most recent open enrollment was a wild one, due in large part to the ongoing COVID-19 pandemic and the general election. But these factors didn’t have quite the impact in Medicare Advantage as some had expected, and looking deeper into regional differences, enrollment by MA product type and growing interest in certain supplemental benefits may help drive 2022 benefit design, observed Carrot Health and Deft Research in a recent webinar co-hosted by the firms.

Carrot Health, which provides consumer and health analytics through its MarketView platform, witnessed a remarkably slow start to the AEP followed by a crunch of activity at the end, according to Senior Product Manager Nicole Norder, who spoke during the Feb. 18 webinar, “Myth Busters: 2021 AEP Edition.” Across Carrot’s book of business, 48% of customers’ sales occurred in the last two weeks of the AEP, and 36% of those happened in the final week. And plans on average had a 95.5% retention rate. The AEP ran from Oct. 15 to Dec. 7.

With reports of low Medicare Advantage switching during the recent Annual Election Period (AEP) and major national carriers capturing two-thirds of new enrollment (see infographic, p. 4), smaller regional players are looking at the current Open Enrollment Period (OEP) as an opportunity to foster satisfaction and retention and to promote their brand through multiple marketing channels. These efforts include advertising direct plan comparisons, maximizing digital/online engagement, working closely with providers and communicating with members about the COVID-19 vaccine, marketing experts tell AIS Health.

“Even before the end of AEP, we were planning with our regional clients to ensure they had a strong presence in the marketplace during the OEP,” says Renee Mezzanotte, executive vice president of client engagement with Chesterbrook, Pa.-based DMW Direct. “A combination of media channels — digital, direct response TV and direct mail — are proving to keep our clients top of mind. As in years past, to make the most of limited budgets, DRTV schedules are flighted around direct mail drops to boost awareness and response. We can’t outspend national players, but we can outsmart them.”

As Congress is likely to look for offsets through future budget reconciliation measures and new reports spotlight the soaring cost of prescription drugs in Medicare Part D, industry experts agree that a legislative overhaul to the Part D program is inevitable. And while there’s been bipartisan support for restructuring the Part D benefit and increasing manufacturer and plan liability, the details of any legislative proposal that advances will be critical for Part D sponsors’ bid planning and coverage decisions.

Three proposals introduced in 2019 sought major changes to Part D and had varying levels of bipartisan support. They are: The Lower Costs, More Cures Act (H.R. 19/S. 3129), introduced by Republican senators including Medicare Advantage champion Mike Crapo (R-Idaho); The Prescription Drug Pricing Reduction Act (PDPRA), introduced by Sens. Chuck Grassley (R-Iowa) and Ron Wyden (D-Ore.); and The Elijah E. Cummings Lower Drug Costs Now Act (H.R. 3), which passed the House in December 2019. But for reasons that included a divided Congress, heavy pharmaceutical industry lobbying and a priority shift to the COVID-19 pandemic, they did not become a reality.

✦ President Joe Biden at press time was expected to name Chiquita Brooks-LaSure as the new CMS administrator, according to multiple news reports. Currently a managing director with Manatt Health, Brooks-LaSure is a former director with HHS and CMS who played a key role in passing and implementing the Affordable Care Act.

✦ Two weeks after President Joe Biden issued an executive order instructing federal agencies to review waivers and policies that may “reduce coverage or otherwise undermine Medicaid,” including Medicaid work requirements, Acting CMS Administrator Elizabeth Richter notified states that the agency is retracting the additional procedures for potential waiver withdrawals presented in letters of agreement with former Administrator Seema Verma. CMS said it will instead “adhere to the regulations and STCs [special terms and conditions], which generally provide that States will receive notice and an opportunity to request a hearing before a determination to suspend, modify, or withdraw a demonstration project becomes effective,” according to an excerpt of one of the letters posted by JD Supra. Notably, the letter issued to Tennessee did not retract approval of the TennCare III waiver, which establishes a fixed funding approach. Visit https://bit.ly/2M0wlJc.