Radar on Medicare Advantage

✦ Molina Healthcare, Inc. on Sept. 29 said it entered into a definitive agreement to acquire substantially all of the assets of New York Medicaid managed care organization Affinity Health Plan for approximately $380 million. Affinity serves roughly 284,000 Medicaid members in New York City, Westchester, Orange, Nassau, Suffolk and Rockland counties and has annual premium revenue of approximately $1.3 billion. Subject to regulatory approvals and closing conditions, the transaction is expected to close in the second quarter of 2021 and to be immediately accretive to adjusted earnings per share, stated Molina. Visit https://bit.ly/3jfdxBi.

✦ Senate Republicans this month are rushing to replace the late Justice Ruth Bader Ginsburg with President Donald Trump’s nominee Amy Coney Barrett, which could result in the Supreme Court striking down the Affordable Care Act (ACA). After the Fifth Circuit Court of Appeals agreed last year that the law’s individual mandate is unconstitutional, the Supreme Court on Nov. 10 is scheduled to hear oral arguments in California v. Texas and consider whether the entire law should be invalidated, which would effectively end Medicaid expansion. “With the passing of…Ginsburg, we now see increased risk around the sustainability of the ACA in its current form,” wrote Barclays analyst Steve Valiquette on Sept. 21. Analysts agreed that Centene Corp. has the most exposure to a fully invalidated ACA, given the firm’s strong concentration in Medicaid and the individual market.

CMS’s latest overview of program audits showed continued improvement among Medicare Advantage and Part D organizations, with the average overall audit score dropping from 1.03 in 2018 to 0.77 in 2019. Scores improved across all program audit areas except for two — Part D Formulary and Benefit Administration (FA) and Special Needs Plan Model of Care (SNP-MOC) — results that hint to sponsors where CMS is directing its energy, suggests one compliance expert.

According to the 2019 Part C and Part D Program Audit and Enforcement Report issued Sept. 14, the CMS Medicare Parts C and D Oversight and Enforcement Group (MOEG) imposed a total of $1.6 million in civil monetary penalties (CMPs) on eight sponsors in 2019. Two of those CMPs, however, were related to noncompliance identified outside of program audits. Fines based on program audits alone amounted to about $1.2 million, or an average of nearly $200,000 per organization, compared with an average CMP of about $41,000 for the 2018 program audits, which focused on smaller plans (RMA 3/7/19, p. 3).

Although health care was a motivating factor for many voters in the 2018 midterm elections, the politicization of the COVID-19 pandemic and a lack of agreement within the Democratic and Republican parties on future health care reform has muddied the waters for candidates running in the 2020 general election, pundits observed during a recent panel at the America’s Health Insurance Plans (AHIP) National Conference on Medicare, Medicaid & Dual Eligibles. And the first presidential debate, which took place on Sept. 29, only further solidified the expectation that a large-scale overhaul of the health care system is unlikely under either candidate.

The first question of the on-air, in-person debate related to President Donald Trump’s plan to immediately replace late Justice Ruth Bader Ginsburg (see brief, p. 8), but things quickly exploded into a debate about the Affordable Care Act (ACA). Trump accused former Vice President Joe Biden and the Democratic Party of wanting “socialist medicine” and the elimination of private health care. Biden clarified that his proposal for a public option is “only for people who are so poor they qualify for Medicaid” and that his intent is to “expand Obamacare” and let people keep their private insurance.

A presidential election is a known disruptor to Medicare marketing campaigns, which for the 2021 Annual Election Period (AEP) began on Oct. 1, and insurers and their broker partners this election cycle face the dual challenge of also marketing during a pandemic. As a result, marketing experts advise carefully timing the various components (e.g., digital, mail, radio/television ads) of your campaign between now and the Dec. 7 end of the AEP to get the biggest bang for your buck.

“An election year doesn’t need to be scary,” says Renee Mezzanotte, executive vice president of client engagement with Chesterbrook, Pa.-based DMW Direct. “During past election years, we have found consumers are distracted and less likely to engage with some media channels in the days leading up to the election. Because of this, we collaborate closely with our clients to plan acquisition as well as member communication differently to ensure a successful AEP.”

With its annual release of the so-called landscape files for the Medicare Advantage and Part D programs, CMS on Sept. 24 estimated that enrollment in MA will jump 10% to an “all-time high” of 26.9 million beneficiaries, while the average monthly MA plan premium will drop 11% to an all-time low of $21.00. Meanwhile, beneficiaries shopping during the 2021 Medicare Annual Election Period (AEP) that starts Oct. 15 will be inundated with choices, from the sheer number of plans available to a plethora of supplemental benefits.

CMS, in its Sept. 24 press release accompanying the unveiling of the landscape files, estimated that MA beneficiaries will have an average number of 47 plan choices per county, up from about 39 in 2020 and 33 in 2019. The agency added that the number of plan options in rural counties next year will increase by about 18% to 2,900, “as a result of flexibilities we gave to plans on benefit coverage and building their provider networks.”