Radar on Medicare Advantage

A new report from the Government Accountability Office reveals an alarming statistic that may prompt CMS to more closely monitor disenrollments: Medicare Advantage beneficiaries in their last year of life are more than twice as likely to abandon their MA plan for fee-for-service (FFS) Medicare than other MA enrollees. Although the proportion of disenrollments by dying MA beneficiaries is relatively small — 4.5% in 2016 and 4.6% in 2017 — this trend may indicate issues with care access and quality, and adds costs to the Medicare program, observed GAO.

The report released July 28 follows a 2017 review of disenrollment by members in poorer health that led CMS to begin analyzing disenrollments by health status, as well as other studies that have suggested members in poorer health may be more likely to leave MA.

Recognizing the continued uncertainty presented by the COVID-19 pandemic as the Delta variant rages across the country, select insurers reporting second-quarter 2021 earnings indicated that Medicaid enrollment helped to offset some of their medical cost increases. But with eligibility redetermination efforts likely to pick back up once the public health emergency (PHE) ends, insurers are looking forward to Medicaid bid opportunities in select states next year.

For the quarter ending June 30, Molina Healthcare, Inc. reported adjusted earnings per share (EPS) of $3.40 and an 88.4% medical loss ratio (MLR) that reflects “solid performance while managing through pandemic-related medical cost challenges that increased the ratio by 110 basis points,” explained President and CEO Joseph Zubretsky during a July 29 earnings call.

CMS’s annual release of Medicare Part D payment benchmarks and other bid-related information for the coming plan year tells pretty much the same story as in years past. The national average bid amount will continue to go down, while reinsurance amounts will continue to rise and premiums will see a slight increase.

“It’s just a continuation of things that we’ve seen for a while now. Reinsurance was relatively flat from 2018 to 2020, but it’s been going up” as the expanded use of high-cost therapies leads to higher catastrophic-phase spending, explains Tom Kornfield, senior consultant with Avalere Health. That trend has been closely tracked by the Medicare Payment Advisory Commission, which continues to advocate for a Part D redesign. As Congress considers drug pricing legislation, such information could provide “more support for folks who want to restructure the Part D benefit,” suggests Kornfield.

Sachin Jain, M.D., is a longtime champion of treating certain social factors as medical issues. In his work as president of CareMore Health, a physician-led care delivery subsidiary of Anthem, Inc., he spearheaded efforts to address senior loneliness. He has since brought that commitment to SCAN Health Plan, where he has served as president and CEO for the last year. SCAN, a large, not-for-profit Medicare Advantage plan in California, is now taking on homelessness in a new way with the planned launch of a dedicated medical group that will provide health care and other services to individuals experiencing homelessness.

AIS Health recently spoke with Jain about the new initiative and the importance of addressing unmet social needs that can have a serious impact on health outcomes. Editor’s note: This interview has been edited for length and clarity.

Before the Senate adjourns for its annual summer recess, momentum was building at press time for what would be one of the most significant changes to the Medicare program since the addition of Part D. That would be the expansion of fee-for-service (FFS) Medicare benefits to include dental, vision and hearing, and although details of any such legislative proposal are scarce, industry observers say the potential change could drive more Medicare Advantage plans to innovate.

Along with prescription drug pricing measures, the expanded Medicare benefits were included in a discussion draft of the $3.5 trillion spending package that Senate Democrats aim to pass via budget reconciliation, which requires a simple majority rather than 60 votes typically needed to pass bills in the Senate. That is separate from the Infrastructure Investment and Jobs Act, the Senate’s $1.2 trillion infrastructure proposal that the chamber aims to pass this week and includes delaying the implementation of the controversial Trump-era rebate rule to 2026 — a move that has been discussed as a way to fund enhancements to the Medicare program.