Radar on Medicare Advantage

✦ In its first earnings report released as a publicly traded company, Clover Health on March 1 said it ended 2020 with more than 58,000 Medicare members, generated more than $670 million in revenue for the full year and reported a net loss of $91.6 million. The latter was an improvement over a net loss of $363.7 million in 2019, resulting from “year-over-year improvement of derivative valuation, offset by an unfavorable change in the fair value of warrant expenses,” the company explained in a March 1 press release. Its medical loss ratio for the year was 88.7%, compared with 98.6% for 2019; excluding the estimated net effect of COVID-19, its full-year normalized MLR was 90.5%, an improvement that was “driven by operational efficiency and the increase in the number of members managed by PCPs that use the Clover Assistant,” said the company. The Medicare-focused technology and health care company said it anticipates Medicare Advantage membership to be between 68,000 and 70,000 by Dec. 31, 2021. Visit https://bit.ly/2NSEArD.

✦ The American Rescue Plan Act of 2021 (H.R. 1319), passed by the House on Feb. 27, includes additional federal funding for states that newly adopt Medicaid expansion and creates a new option for states to extend pregnancy-related Medicaid and CHIP coverage to new mothers for 12 months, according to a summary from the Georgetown University Center for Children & Families. The bill would also require drug manufacturers to pay higher rebates to Medicaid on drugs that have had excessive price increases by eliminating a cap on total drug rebates that manufacturers must pay state Medicaid programs. However, Senate Democrats at press time reportedly agreed to delay that change, which is estimated to generate about $23.5 billion in savings to the federal government and states over 10 years, until 2024. Senate Democrats are likely to push the bill through via budget reconciliation (see story, p. 1), aiming for the March 14 deadline when emergency unemployment benefits expire. Visit https://bit.ly/3uOkyiw.

As policymakers consider proposals to revamp Medicare Part D, HHS secretary nominee and California Attorney General Xavier Becerra (D) during his Senate confirmation hearings last week vowed to make reducing the cost of prescription drugs a priority — although details on such a plan were scant. Meanwhile, his comments around ensuring a “level playing field” between Original Medicare and Medicare Advantage could have implications for MA plan reimbursement.

During a Feb. 23 Senate Health Committee hearing, Bernie Sanders (I-Vt.) was one of several senators who queried Becerra about drug pricing and asked him for “more specificity as to how we take on the drug companies and lower drug costs.” Becerra’s response, which did not appear to satisfy a skeptical Sanders, was that he would “deal with it swiftly” and that the government must take on drugmakers “by trying to go behind the curtain” to determine how they reach their prices.

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.”