Radar on Medicare Advantage

From strengthening the Affordable Care Act to addressing the COVID-19 pandemic, President-elect Joe Biden will have plenty of health care-related items on his plate when he moves into the White House in January. Part of Biden’s campaign pledge to improve health care coverage included lowering the Medicare eligibility age to 60, but his ability to enact any kind of sweeping health care reform will be severely limited by a likely divided Congress. When it comes to Medicare, industry observers suggest regulatory changes to strengthen the program and better protect beneficiaries are more likely under a Biden administration.

If Biden were to succeed with his Medicare-at-60 plan, “it would probably be a very big boon for Medicare Advantage,” given that a younger aging population might not use as many services as an older population and since MA is now a popular alternative to traditional Medicare, observes Stephanie Kennan, a member of McGuireWoods Consulting’s federal public affairs group and former senior health policy adviser to Sen. Ron Wyden (D-Ore.). Passing such a change, however, depends on several key factors, says Kennan.

✦ Oklahoma last month released a request-for-proposals from qualified insurers interested in participating in the state’s first managed Medicaid program. Beginning on Oct. 1, 2021, managed care organizations would coordinate medical, behavioral and pharmacy benefits for low-income adults (including the expansion population) and children in the new SoonerSelect program, while aged, blind or disabled enrollees and dual-eligible beneficiaries would remain in fee-for-service Medicaid for the time being. The Oklahoma Health Care Authority is seeking to contract with at least three MCOs to provide statewide coverage, and it expects to unveil awards in January or February. Visit www.okhca.org/soonerselect.

✦ CMS late last month released a series of Health Plan Management System (HPMS) memos aimed at clarifying various uncertainties related to the COVID-19 pandemic going into next year. In an Oct. 28 memo to Medicare Advantage organizations, Medicare-Medicaid Plans (MMPs) and Medicare Cost plans, CMS announced that fee-for-service Medicare will foot the bill for COVID-19 vaccinations administered in 2021. In a separate frequently-asked-questions document posted Oct. 15, CMS said MAOs, Part D plan sponsors and MMPs may not waive the Part B premium for an enrollee during the public health emergency, even though some MA plans during the current open enrollment period are offering “premium rebates” to cover Part B premium payments. And in a third memo dated Oct. 29, CMS notified plans that it will continue to use the 2020 audit protocols when conducting 2021 program audits. CMS had intended to use the updated protocols, which contained numerous changes, for the 2021 audits, but they are still awaiting OMB approval. View the HPMS memos archive at https://go.cms.gov/3oWvQya.

As Medicare Advantage and Part D sponsors started promoting their offerings during the 2021 Annual Election Period that began on Oct. 15, several major insurers notably mentioned their participation in the first year of the CMS Part D Senior Savings Model (SSM). Perhaps the Trump administration’s most tangible action on insulin costs, the model is intended to reduce Medicare expenditures and improve care quality, but the expense to seniors will vary by plan type and region, according to two consulting firms.

Introduced through the CMS Center for Medicare & Medicaid Innovation (CMMI) in March, the five-year model is intended to lower out-of-pocket costs for diabetic seniors by featuring “predictable” copayments of no more than $35 for a broad set of insulins beginning in 2021 (RMA 3/19/20, p. 1). Specifically, the model will test a change to the Manufacturer Coverage Gap Discount Program by waiving current rules for supplemental benefits used to reduce cost sharing in the coverage gap and enabling Part D sponsors to offer enhanced alternative plan benefit packages (PBPs) that feature standard copays through all phases of the Part D benefit up to catastrophic coverage — instead of cost sharing that changes based on the benefit phase.

As the COVID-19 pandemic continues to ravage the U.S., recent research from the Kaiser Family Foundation demonstrates that people of color are more likely to test positive, require hospitalization and higher levels of care, and die from the novel coronavirus than white patients. This stark reality was top of mind during two industry conferences last month, as panelists from Medicare Advantage and Medicaid managed care organizations discussed the urgency of addressing racial disparities in health care and ways insurers can address them, from granular data collection and diverse hiring practices to working more collaboratively to effect change among providers.

As part of its “Bold Goal” initiative, Humana Inc. for several years been collecting data about various factors that impact the health of members in select communities around the country, and is now “digging into that next layer to really understand those determinants,” explained Vice President of Bold Goal and Population Health Caraline Coats during a panel at the Better Medicare Alliance (BMA) 2020 Medicare Advantage Summit, held virtually from Oct. 14-16.

With ballots still being counted in battleground states at press time, the outcome of the Nov. 3 presidential election was still too close to call. Meanwhile, it looked like Republicans will barely hold onto their majority in the Senate, while Democrats will continue to control the House. Nevertheless, analysts and investors seemed relatively confident in the positioning of managed care organizations, especially those with a stake in Medicare Advantage.

“We have seen enough to say that the election is shaping up well for Managed Care stocks,” wrote SVB Leerink analyst Stephen Tanal on Nov. 4. The firm reiterated its “bullish outlook” on publicly traded firms with minimal Affordable Care Act exposure, namely those with a diversified portfolio (e.g., Anthem, Inc. and UnitedHealth Group) and MA-focused Humana Inc. He added that the “final outcome in the Senate will be important for investor sentiment on Medicaid-focused MCOs that derive more of their earnings from ACA-related programs,” notably Centene Corp. and Molina Healthcare, Inc.