Radar on Medicare Advantage

Trends emerging from early analyses of CMS’s 2024 Medicare Advantage and Part D “landscape files” include a lower concentration of $0 premium plans, increases in monthly premiums by some of the biggest insurers, and less aggressive but continued expansions into new service areas. But industry observers caution against reading too much into the data, given the nuances of benefit design that are not detectable from the landscape files. That said, it’s clear the major publicly traded insurers made a few tradeoffs in order to maintain benefit stability and remain competitive amid financial headwinds.

Insurers reporting second-quarter 2023 earnings earlier this year said they factored the emerging trend of increasing utilization into MA bids that were due in June. Also impacting pricing for next year’s offerings is the phasing in of substantial revisions to the CMS-Hierarchical Condition Categories (HCC) risk adjustment model that could reduce payments depending on plan type and coding practices, along with certain Part D changes resulting from the Inflation Reduction Act (IRA) that increase the cost burden for plans in the catastrophic phase of the benefit.

With the Oct. 1 start of marketing for the 2024 Annual Election Period (AEP), several major publicly traded insurers have unveiled somewhat slower plans for geographic expansion next year, while CMS’s 2024 MA and Part D landscape files suggest that premium increases were a common way to offset potential rate cuts. But according to recent press releases unveiling product enhancements for next year, insurers appear to be extending enhanced supplemental benefits to the broader MA population while offering Dual Eligible Special Needs Plan (D-SNP) beneficiaries greater flexibility to address nonmedical needs.

Unveiling its largest service area expansion that includes continued D-SNP growth, CVS Health Corp.’s Aetna on Oct. 1 said all D-SNP products will feature $0 Part D drugs; dental, vision and hearing benefits; and an Extra Benefits Card with an Extra Supports Wallet. The latter features an “enhanced allowance for members to spend on things they need the most, like healthy foods, utilities, rent/mortgage” and other items, per a company press release. In certain D-SNPs, members can earn an additional $30 per month in their Extra Supports Wallet by selecting a “high value” primary care provider, added the insurer. These “meaningful D-SNP product enhancements…will enable Aetna to remain an industry leader in this space,” asserts Terri Swanson, president of Medicare for Aetna.

As the CMS Center for Medicare and Medicaid Innovation works toward its goal of having all fee-for-service (FFS) Medicare beneficiaries and most Medicaid beneficiaries in accountable care relationships by 2030, CMMI this year has unveiled three models aimed at advancing value-based care. One of them is the Guiding an Improved Dementia Experience (GUIDE) Model, which combines care coordination, caregiver support and respite services to improve the quality of life for people with dementia and their caregivers while delaying avoidable long-term nursing facility placement. Although the model does not serve Medicare Advantage beneficiaries, its mission appears to parallel specialized MA plans that offer supplemental benefits aimed at helping people age in place, deploy interdisciplinary care teams and empower caregivers to play an active role in their loved ones’ care.      

An estimated 6.7 million people in the U.S. are currently living with Alzheimer’s or another form of dementia, and that number is expected to grow to nearly 14 million by 2060. Medicare will cover most of those Americans at some point, but the program as it exists today does not have a standardized are delivery approach for dementia, observed Tonya Saffer, director of the division for health care payment models at CMMI, during a Sept. 13 webinar on the model hosted by Manatt, Phelps & Phillips, LLP.