Radar on Medicare Advantage

  • Strong ’19 AEP Spells Earnings Growth for MAOs This Year

    The majority of publicly traded insurers reporting fourth-quarter and full-year 2019 earnings over the last month identified government business as a significant earnings contributor, with momentum from the recent Medicare Advantage open enrollment period carrying that growth into 2020.

    Reporting its first full year of earnings with Aetna Inc., CVS Health Corp. on Feb. 12 said that acquisition was the main driver of consolidated growth of 32% to nearly $256.8 billion. Total revenues in the company’s Health Care Benefits segment continued to benefit from strong membership in government products, said Eva Boratto, CVS Health chief financial officer, during a conference call to discuss recent earnings.

  • Medicaid MCOs Get Creative With Local SDOH Partnerships

    From commercial insurers addressing lonely millennials to CMS allowing supplemental benefits that address non-medical needs for the Medicare Advantage population, social determinants of health (SDOH) are ubiquitous in health care these days. But Medicaid managed care organizations for years have been working within a fragmented delivery system and getting creative to address social determinants, which research has suggested drive up to 80% of health outcomes. Speaking at the 11th Annual Medicaid Innovations Forum, hosted by Strategic Solutions Network in Orlando from Feb. 5 to 7, several Medicaid insurers detailed how they are forging unique partnerships with local organizations to tackle a range of issues that often intertwine.

    As the only not-for-profit insurer in its market that is owned by a network of 20 federally qualified health centers (FQHCs), it’s in the DNA of Community Health Plan of Washington (CHPW) to partner with its health centers “to work in the communities to address those social determinants of health that really impact our member population,” said Melissa Stevens, vice president of community engagement and growth. CHPW is also the only locally based plan in its market and competes with four national, for-profit insurers, she said.

  • MA, Part D Plans Face Uncertainty as Audit Season Begins

    Medicare Advantage, Medicare-Medicaid Plan and Part D sponsors selected for 2020 program audits will start receiving engagement letters this month, but they face some uncertainty as CMS has yet to finalize a set of proposed changes unveiled last August. While the bulk of those changes were aimed at reducing plan sponsors’ burden, plans are advised to closely monitor the data CMS may no longer collect through the audit process but may obtain from other sources, while continuing to conduct mock audits.

    “Audit season is here, and March Madness means something different in the MA-PD world,” remarks Tina Bailey, vice president of compliance solutions with Gorman Health Group, LLC (GHG). “But this year the timing is odd as we’re waiting on new protocols…and we’re not sure what pieces of the proposed changes are going to be finalized and implemented this audit cycle.”

  • News Briefs

     Medicare Advantage enrollment reached nearly 24.7 million members as of the Jan. 1, 2020, payment date, according to the February enrollment report from CMS, which includes final figures from the Annual Election Period. The February data represents year-over-year MA membership growth of 9.2% (vs. an increase of 4.5% in fee-for-service Medicare) and MA penetration of 36.2%, up from 35.2% a year ago, estimated securities analyst A.J. Rice in a Feb. 17 research note from Credit Suisse. Rice added that the five major managed care organizations account for roughly 61.5% of total MA enrollments, with UnitedHealth Group and Humana Inc. leading the pack in MA membership growth. View the report at https://go.cms.gov/2P979OV. Contact Rice at aj.rice@credit-suisse.com.

     A federal appeals court on Feb. 14 unanimously struck down the Trump administration’s decision to allow Arkansas to implement Medicaid work requirements and ruled that HHS’s approval of the “Arkansas Works” program was “arbitrary and capricious.” According to the opinion from the U.S. Court of Appeals for the District of Columbia Court (Gresham v. Azar, No. 1:18-cv-01900), a “critical issue” in the case was the HHS secretary’s “failure to account for loss of coverage.” Arkansas Works was implemented in June 2018 and resulted in more than 18,000 Medicaid recipients losing coverage in a six-month period. U.S. District Judge James Boasberg in March 2019 vacated the agency’s approvals of work requirements in Kentucky and Arkansas (RMA 4/4/19, p. 1). HHS appealed the decision, and Kentucky ultimately abandoned its challenged demonstration project. View the ruling at https://bit.ly/38JzGCr.

  • Proliferation of $0 Premium PPOs, Supplemental Benefits Drive Continued MA Switching

    A new report from Deft Research finds that switching among Medicare Advantage members during the recent Annual Election Period (AEP) was steady at 13%, compared with last year’s rate of 14% after switching among MA members hit a low of 11% in 2018. Meanwhile, the Medicare Supplemental market saw an increase in switching from 7% in 2019 to 9% during the 2020 AEP. In an Executive Research Brief highlighting data from the 2020 Medicare Shopping and Switching Study, Deft observed that the rise of $0 premium PPO plans and expanding supplemental benefits are two likely drivers of MA switching. Although the MA market is still dominated by $0 HMO plans, more than 300,000 seniors moved into $0 PPO options that were newly available for 2020, observed Deft.
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