Radar on Medicare Advantage

In its final annual update to the Medicare Advantage and Part D programs, President Joe Biden’s CMS on Nov. 26 issued a proposed rule that contained a slew of marketing and communications provisions slated to take effect for plan year 2026. These include new items that agents and brokers must discuss with Medicare consumers, an expanded definition of materials that plans must submit to CMS prior to marketing for the Annual Election Period, and new guidelines for MA organizations’ marketing of supplemental benefits.

CMS’s proposal to expand oversight of MA advertisements “would build on previously finalized policies to protect people with Medicare from predatory marketing behavior such as misleading television, web-based and direct mail advertisements,” stated CMS Center for Medicare Director Meena Seshamani, M.D., during a Nov. 26 call with reporters. “These protections have resulted in CMS rejecting over 1,500 TV ads submissions in the last two years that were noncompliant and misleading to consumers, and the proposals in this rule would further strengthen this oversight.”

Acknowledging the growing prevalence of obesity in the U.S. and its existence as a chronic disease, CMS in its proposed Medicare Advantage and Part D rule for the 2026 contract year included a landmark provision to expand Medicare and Medicaid coverage of anti-obesity medications (AOMs). The proposal opens the door to more Part D coverage of costly glucagon-like peptide-1 (GLP-1) medications — which are now covered for the treatment of Type 2 diabetes or major adverse cardiovascular events — and industry experts question how sponsors will determine eligibility and control what’s likely to be a significant increase in costs.

In the rule, which was issued on Nov. 26 and is slated for Federal Register publication on Dec. 10, CMS proposed a reinterpretation of Medicare and Medicaid law to provide coverage of AOMs for the treatment of obesity under Medicare Part D and Medicaid. CMS estimated that some 3.4 million Part D beneficiaries would become newly eligible to gain coverage for AOMs, at a 10-year program cost of about $25 billion (out of expected Part D spending of $2.1 trillion). With the revision to current Medicaid exclusions, coverage of AOMs would increase federal and state spending by a total of $40 billion over 10 years, CMS estimated.

CareSource, which serves approximately one quarter of managed Medicaid enrollees in the Georgia Families program, on Dec. 2 became the only incumbent bidder out of four managed care organizations selected for new contracts expected to start in 2026. Major Medicaid players Centene Corp. and Elevance Health, Inc. were left out of the awards, while Humana Inc., Molina Healthcare, Inc. and UnitedHealthcare successfully bid on contracts that could generate at least $15 billion in combined annual revenue.

According to AIS’s Directory of Health Plans, nearly 1.7 million Medicaid beneficiaries in Georgia are in managed care, while another 1 million are in fee-for-service Medicaid. Three MCOs — CareSource, Centene’s Peach State Health Plan and Elevance Health’s Amerigroup Georgia — currently serve the program. With nearly 775,000 enrollees, Centene has the largest market share (46%).

President-elect Donald Trump on Nov. 19 named author and cardiac surgeon Mehmet Oz, M.D., aka television personality Dr. Oz, as his choice for CMS administrator, overseeing both the Medicare and Medicaid programs. Industry observers suggest the nomination could be a win for Medicare Advantage, although future policy changes will largely depend on the staff behind him.

“Dr. Oz does not have any government experience for us to draw from, but he did coauthor a pro-Medicare Advantage op-ed in Forbes in June 2020 that sheds some light into his views on health policy,” wrote Barclays analyst Andrew Mok on Nov. 19. That piece “supported expanding private Medicare to most citizens,” which translates to a “positive read-through” for publicly traded MA firms like Humana Inc., CVS Health Corp. and UnitedHealth Group.