Radar on Medicare Advantage

If a recent slew of press releases is an early indication, insurers are intent on growing their Medicare Advantage business in 2022 through expansions into largely untapped areas and strategic partnerships with locally recognized providers. All service area expansions are subject to CMS approval. The 2022 Annual Election Period begins on Oct. 15 and runs through Dec. 7.

Anthem, Inc. this fall will partner with Kroger Health to offer an MA plan in four regions: Atlanta, Cincinnati, Louisville, Ky., and southern Virginia. During the company’s July 21 second quarter earnings call, President and CEO Gail Boudreaux said MA “remains a key area of focus” for the organization. Further boosting its MA business, Anthem recently acquired Puerto Rico Medicaid and MA plan operator MMM, and the company won a contract to serve New York City retirees next year (see story, p. 1).

As the Medicare Advantage program continues to see double-digit enrollment increases, it’s not just individual consumers who are flocking to private plans, which now enroll 43.8% of Medicare-eligible beneficiaries, according to recent CMS data. MA organizations and industry experts report a growing interest in Employer Group Waiver Plan (also commonly referred to as “group Medicare”) offerings for retirees, and EGWP enrollment is growing at an average rate of about 6% per year (see infographic).

Of the roughly 27.7 million MA enrollees as of August 2021, about 18% (or nearly 5 million) are enrolled in an EGWP, according to AIS’s Directory of Health Plans (DHP). Approximately 80 carriers across the U.S. offer 952 such plans, more than three-quarters of which are PPOs and nearly two-thirds of which feature a Part D benefit. The usual big names — UnitedHealthcare, CVS Health Corp.’s Aetna, Humana Inc. — dominate the market, while about 18% of overall membership is covered by a Blue Cross and Blue Shield plan. That includes Blues plans owned by Anthem, Inc., which stands to nearly double its EGWP membership with the addition of New York City retirees and their dependents next year. Moreover, Anthem in June acquired the Medicare and Medicaid assets of InnovaCare Health, which included group Medicare plans in Puerto Rico.

✦ Centene Corp. on Aug. 17 said the Ohio Dept. of Medicaid (ODM) made the long-awaited decision to renew its managed Medicaid contract with subsidiary Buckeye Health Plan. ODM in April named six other managed care organizations that will serve its newly redesigned Medicaid program starting in 2022 but deferred its decision on Buckeye, since Centene’s pharmacy benefit management practices were the subject of litigation at the time. Centene has since reached a no-fault agreement with the state and made some changes to its pharmacy benefit structure. “We are humbled and honored to continue to offer high-quality healthcare services and programs for our members,” said Brent Layton, president of U.S. markets, products and international, in a press release from Centene. Meanwhile, Centene was also one of three MCOs chosen to renew their managed Medicaid pacts with Nevada. For contacts starting Jan. 1, 2022, the Nevada Dept. of Health and Human Services selected units of UnitedHealthcare and Anthem, Inc., and new entrant Molina Healthcare of Nevada, Inc.

✦ A new Kaiser Family Foundation (KFF) analysis finds that spending for Medicare Advantage enrollees was $321 higher per person in 2019 than if enrollees had been in traditional Medicare, generating an additional $7 billion in Medicare costs. Applying an MA payment reduction of 2%, as recommended in a recent Medicare Payment Advisory Commission report, could lower total Medicare spending by $82 billion through 2029, estimates KFF. As MA penetration continues to grow and the Biden administration seeks way to extend the solvency of the Medicare Hospital Insurance Trust Fund, the KFF “analysis suggests that reducing the difference in payments between Medicare Advantage and traditional Medicare would generate savings, with the potential for reductions in extra benefits for Medicare Advantage enrollees,” conclude researchers.

As the Biden administration continues to dash states’ dreams of implementing Medicaid work requirements — most recently revoking waiver approvals granted to Ohio, South Carolina and Utah by the Trump administration — CMS this month took a critical step in revisiting Tennessee’s plans to use a fixed funding mechanism. With the opening of a new 30-day federal public comment period regarding the approval of TennCare III, experts anticipate a great amount of negative input that will lead the program to a fate similar to that of work requirements.

The Trump administration on Jan. 8 approved Tennessee’s request to use an “aggregate cap” approach to Medicaid funding that many industry observers have likened to a block grant. The outgoing administration approved the state’s section 1115 waiver demonstration for 10 years. Through the unprecedented approach, Tennessee will receive federal Medicaid funds based on a fixed budget target that is determined by CMS and the state using historical enrollment and cost data. If the state spends less than its target cap while meeting yet-to-be determined quality goals, it can earn up to 55% of annual savings to reinvest back into other state health programs. That waiver also allows the state to implement a commercial-style closed drug formulary.

CMS will refocus and redouble its efforts on health equity and whole-person health outcomes as the Biden administration evaluates ongoing and potential programs and initiatives, CMS Administrator Chiquita Brooks-LaSure said during an Aug. 12 webcast hosted by Health Affairs. During her remarks, she also hinted that the agency is interested in ensuring a level playing field between fee-for-service Medicare and Medicare Advantage.

The Center for Medicare and Medicaid Innovation (CMMI) — which is now 10 years old — has refreshed its strategy to focus on equity along with value-based care and person-centered care, Brooks-LaSure explained. She and other CMS officials laid out their CMMI strategy in a Health Affairs blog post published the same day as the webcast.