Radar on Medicare Advantage

With an increasing share of seniors enrolling each year, a healthy rate environment and a meaningful return on scale, Medicare Advantage is largely seen as a safe space for insurers and one that is likely to drive mergers and acquisitions (M&A) for the foreseeable future. But one analyst suggests there’s room for growth in managed Medicaid, and that Molina Healthcare, Inc. could be positioned as the next aggregator of Medicaid managed care plans.

In the midst of a financial turnaround that involved major management changes and a corporate restructuring effort, Molina in February delivered impressive fourth-quarter and full-year 2019 earnings and unveiled two small acquisitions that would have given the company nearly 100,000 new enrollees combined (RMA 3/5/20, p. 5). Although one of the deals fell through, Molina on July 1 said it completed the acquisition of certain assets of YourCare Health Plan, Inc., a nonprofit subsidiary of Monroe Plan for Medical Care with approximately 47,000 Medicaid members in seven counties in the Western New York and Finger Lakes regions.

As shutdowns tied to the COVID-19 pandemic have led to the highest unemployment rate seen in the U.S. since the Great Depression, the current recession appears to be reversing the trend of Medicare “age-ins” putting off enrollment into the program, observes a new study from Deft Research. And while it’s hard to predict consumer behavior during a pandemic, insurers’ age-in campaigns should take into account the financial constraints newly eligible beneficiaries may be facing.

As the unemployment rate hit 11.7% in May, the number of out-of-work people between the ages of 60 and 64 came close to 1.4 million people, compared with about 300,000 a year ago and 650,000 at the height of the Great Recession in the early 2010s, according to U.S. Dept. of Labor data cited in the Deft brief. And while 78% of consumers surveyed by Deft in 2013 anticipated enrolling in Medicare upon turning 65, that rate experienced a drop in subsequent years — hitting a low of 52% in 2017 before climbing to 57% and 58% in 2018 and 2019, respectively (see chart). Now, Deft’s 2020 Age-In Study finds that 61% of consumers plan to enroll in Medicare when they become eligible.

Given the likelihood of continued social distancing as a result of the COVID-19 pandemic, health plans and brokers selling Medicare Advantage plans this fall will rely heavily on call center and online enrollment, tele-sales, and virtual meetings and seminars, experts say. And while the so-called “kitchen table” approach may be out of the question, infusing a personal touch and delivering a positive member experience via remote sales will be critical to acquiring membership.

“There are lot of brokers who are not used to doing this [virtually]…and would rather put a shield in front of their desk and give customers face masks.…Some agents aren’t going to change and you’re not going to change them, but an increasing number of agents, especially those with tele-sales experience…are using technology successfully,” Dwane McFerrin, vice president of Medicare Solutions with Senior Market Sales, Inc. (SMS), said during a recent webinar hosted by Gorman Health Group. SMS, which supports more than 60,000 independent sales agents focused on the senior market, said the firm saw attendance double in March and April for webinars on conducting business virtually.

After providing a break to Medicare Advantage and Part D plans dealing with the COVID-19 pandemic by suspending audit and quality reporting activities, CMS appears to be hitting the restart button on 2020 program audits and risk adjustment data validation (RADV) audits. But with only five full months left in the calendar year, health plans and compliance experts are wondering how thoroughly CMS will conduct the annual program audit process, which focuses on a subset of MAOs that varies in size depending on the year.

Nevertheless, experts say clients should have been preparing for 2020 audits based on the draft protocols CMS released prior to the pandemic and just finalized with a few tweaks. At the same time, they must consider proposed changes for 2021 that were recently posted with a comment period.

✦ Centene Corp. said June 30 that its Illinois subsidiary, Meridian Health Plan of Illinois, Inc., agreed to acquire the membership of Next Level Health Partners, Inc. The deal calls for Meridian to transfer its 54,000 Cook County, Ill., Medicaid members who receive benefits from the Illinois Department of Healthcare and Family Services’ HealthChoice Illinois Program. NextLevel had said in June that it would close following the April collapse of a proposed deal for Molina Healthcare, Inc. to buy the plan for $50 million (RMA 4/16/20, p. 8). Centene said it provided the initial capital that NextLevel needed to obtain its HMO license at the end of 2017 and has provided operational support since then. The deal is expected to close in July 2020. Visit https://prn.to/3dLUjQh.

✦ Recent surveys report conflicting information about Medicare Advantage consumers’ level of satisfaction with how their insurer is communicating during the COVID-19 pandemic. Shortly after a Deft Research study showed that only 24% of MA customers reported that they are aware of their plan’s COVID-19 response (RMA 6/18/20, p. 5), a J.D. Power study posted June 18 gave MA insurers poor marks on communicating with members. Meanwhile, a Morning Consult survey of 1,020 seniors conducted on behalf of the Better Medicare Alliance (BMA) found that 49% of respondents were very satisfied with how their MA plan informed beneficiaries about their response to the coronavirus, 40% were somewhat satisfied and 9% were somewhat unsatisfied. Visit https://bit.ly/2YfTPgJ and https://bit.ly/3hI8BEt.