MA Experts View Harris’ ‘Medicare at Home’ Proposal With Hope, Reservation

In a late-stage effort to pump up her health care platform and potentially sway senior voters and their "sandwich generation" caregivers, Vice President Kamala Harris unveiled a plan to bolster the Medicare program by introducing a “Medicare at Home” benefit while also adding hearing and vision coverage to traditional, fee-for-service (FFS) Medicare. The proposal drew a great deal of optimism from senior advocates and industry observers, but its potential $40 billion price tag caused supporters and skeptics alike to question whether funding such a benefit is truly feasible.

If enacted, it would become a required offering of Medicare Advantage plans, which may be well-positioned to maximize such an opportunity, industry experts tell AIS Health, a division of MMIT.

According to an outline of the plan, which was unveiled by the Democratic presidential nominee and running mate Tim Walz on Oct. 8, the benefit would for the first time cover home care for all seniors and those with disabilities on Medicare who need it. The new services covered by Medicare would include at-home assistance with activities of daily living (ADLs) performed by home health aides, personal care attendants or direct care workers, and it would be tailored to fit seniors’ long-term care needs. It also seeks to improve wages for care workers.

Her plan noted that similar proposals, such as one outlined by the Brookings Institution, would cost $40 billion annually. That figure did not take into account the potential for savings from avoided nursing home stays and hospitalizations or the impact of adult caregivers returning to work. According to an AARP survey, family members caring for loved ones provide an estimated $600 billion in unpaid services each year. Recognizing that “millions of Americans are balancing both care for their children and care for aging loved ones,” Harris and Walz have also vowed to provide up to $6,000 per child to families through an expanded Child Tax Credit.

AARP and other surveys have also found that nine out of 10 seniors prefer to remain in their homes for as long as possible, thus avoiding nursing homes or other costly facility stays. According to an Oct. 10 presentation prepared by policy analysts with the Medicare Payment Advisory Commission (MedPAC), the annual cost for a semi-private room in a nursing facility is $104,000. Medicare’s coverage of nursing home care is limited to 100 days of skilled nursing facility (SNF) care following a hospital stay of three or more days, and beneficiaries often “spend down” their assets on nursing home care to qualify for full Medicaid benefits, which they typically do within a few months of entering a nursing home, according to MedPAC. Medicare also covers home health aide services on a limited basis for people requiring “skilled services.” 

“This is the biggest hole in Medicare coverage and has always been, and it’s almost criminal to force millions of otherwise middle-class people to have to become impoverished to qualify for a Medicaid long-term care benefit,” remarks John Gorman, chairman of Nightingale Partners, LLC. “This is a major, major proposal for millions of middle-class Americans.”

According to unpublished research from ATI Advisory, a little over one-third of Medicare beneficiaries ages 65 and older living in the community with long-term care needs have low incomes but are not on Medicaid. “This proposal would likely increase access greatly for this population, particularly as it includes a much higher asset limit than Medicaid,” explains Tyler Cromer, practice director with ATI Advisory.

“Finding and paying for home care is a major problem for millions of Americans who often realize too late that Medicare does not provide for long-term care,” says Cromer, who leads ATI’s Complex Care Programs, Policy and Research Practice and has more than a decade of experience in federal health policy at the Office of Management and Budget. “Supporting families, caregivers, and individuals who need care requires a better system and tackling this issue, but it is not easy. Home care is expensive, and finding and supporting qualified home health aides is difficult.”

Getting such a costly benefit through Congress, however, will be Harris’ primary stumbling block if elected, experts agree.

“This is one of few issues that polls almost flawlessly on a bipartisan basis, so one would like to think that she’d be able to peel off enough Republican votes to get this done,” says Gorman of Harris’ proposal. “Having said that, these Republicans have done almost everything possible to obstruct Biden’s agenda and I’d imagine that would be even worse for the first female president, so that’s a big stumbling block.” Moreover, it’s likely to meet “all kids of resistance from hospitals to nursing homes railing against increased standards of care and workforce requirements.”

“Ensuring we have sufficient workforce capacity to meet the growing long-term care needs in our nation” presents a secondary challenge if the proposal were to become reality, adds Cromer.

Harris’ opponent, former President Donald Trump, has included directing “resources back to at-home Senior Care” and reversing “disincentives that lead to Care Worker shortages” in his plans to protect seniors. Although details are scant, his platform also vows to “support unpaid Family Caregivers through Tax Credits and reduced red tape.”

Proposal Has Impact, Opportunity for MA Plans

Harris’ plan as outlined intends to “draw upon best practices across Medicare plans as well as the private sector to expand the home care workforce, [and] partner with technology companies in areas such as remote patient monitoring and telehealth services, as well as other private sector partnerships.”

Arguably of the most interest to MA plans, however, is the fact that they must cover any benefits that are included in traditional Medicare. “If this gets enacted, the plans are now going to have to completely rethink their bids and everything else to accommodate a whole new benefit here,” says Gorman.

Nevertheless, this could be “a real money maker for MA plans” if done right. “Because ostensibly they’re building in all the facility costs that go into providing long-term care today in traditional Medicare and of course, the plans are going to try to do everything they can to provide these services at home in a far cheaper setting where almost all these beneficiaries want to be. So I would hope that the Medicare Advantage industry, and in particular the Dual Eligible and Institutional Special Needs Plans [I-SNPs], will really come running for this,” Gorman says.

Thanks to enhanced regulatory flexibility around supplemental benefits, MA organizations have already pivoted toward plan designs to support aging in place, offering home modifications, nutritional/dietary benefits and in-home support services. But the available dollars to fund such benefits remain limited. Meanwhile, insurers that offer I-SNPs — still a relatively small part of the overall SNP market — have experience serving members in assisted living facilities with ADL needs.

“Medicare plans and other at-risk models are well-positioned in part because they can pull up and ‘see the whole person.’ This means they have a fuller picture of a person’s medical and non-medical needs, and how these needs interact,” weighs in Allison Rizer, who is executive vice president of payer solutions with ATI Advisory. “Medicare plans and other at-risk models are incentivized to get ahead of needs, preventing them or addressing them, before they escalate,” says Rizer.

“Many Medicare plans are also Medicaid managed care plans, meaning they have experience administering home care benefits and working with non-medical long-term services and supports” (LTSS) providers, she continues. “They also have experience doing care assessments and building care plans for people with home care needs,” as is required of SNPs. ATI earlier this year published research on MA beneficiaries’ access to and utilization of “LTSS-like” supplemental benefits.

“Because this would be a fundamentally new benefit in Medicare, Medicare plans would need to expand their provider networks, care models, staffing, and other operational elements to manage the benefit successfully,” suggests Rizer. “Even those with experience administering this benefit in Medicaid managed care would need to develop ‘risk’ experience managing the benefit for a new (Medicare) population. That said, including this benefit would give Medicare plans a more holistic set of tools to serve their members.”

Although “90% of older adults have voiced that they want to stay in their homes…many homes aren’t set up to be age friendly,” laments Karen Schulte, president of Medicare with SCAN Health Plan, one of the largest not-for-profit MA insurers in the U.S. Providing home health aides or personal care attendants who can help with ADLs that “cannot be supported independently — like bathing, grooming, preparing food — can help them with those things so that they can stay in their homes.”

SCAN, for its part, offers both an I-SNP and a Dual Eligible SNP (D-SNP) serving members with ADL needs. For its I-SNP members, SCAN deploys its own clinical team to the assisted living facility, “making sure that they aren’t using the emergency room or inpatient acute facilities for their care,” since calling 911 is often the default mode of action for assisted living providers, points out Schulte. “We have nurse practitioners who visit these members on a regular basis to make sure that they’re staying on top of any exacerbations and care. So that’s one way that we do help in the home; it’s just a different home,” says Schulte in an interview with AIS Health.

In addition to a regular D-SNP, SCAN has a duals product that is specifically designed for members who are particularly frail, says Schulte. “If they have ADL deficits, we do provide some of these in-home support services, but those are very select populations. And I think [Harris’] bill is ideated for, obviously, the broad general population. The question is just going to be funding. It’s very expensive, as we all know, because I’m sure we've all had parents or loved ones that have needed this type of support, and it’s very difficult.”

Questions Abound Regarding Pay-Fors

The new benefits would be “fully paid for and extend the life of the Medicare Trust Fund,” with the bulk of the cost covered by expanding the Inflation Reduction Act’s Medicare Drug Price Negotiation Program and “cracking down” on pharmacy benefit managers to “increase transparency, disclose more information on costs, and regulate other practices that raise prices” ­— ideas that have largely been expressed as part of the Harris/Walz platform. In addition, the proposal called for implementing international tax reform.

Moreover, the new proposal would provide extra savings to the Medicare Trust Fund and Medicaid, as it would result in more adults using home and community-based settings for longer, which cost significantly less than nursing facilities and could result in reduced hospitalizations.

Despite its promise, the proposed benefit raises “significant questions,” says Cromer. “The impact, cost, and usability for families will all hinge significantly on a well-designed program,” along with key questions around eligibility, covered services and frequency of home care, the role of states and of course, funding.

“The Harris campaign lays out their proposed approach for paying for the benefit, but this will be a negotiation, and the offsets will need to be substantial to fully pay for this program,” she adds. “This is not impossible: Recall that just a decade a half ago, the Affordable Care Act was fully paid for. If designed right, this benefit could prevent or delay other costly services, especially long-stay nursing facility placement.”

If one of the biggest “pay-fors” is to squeeze manufacturers through accelerated drug price negotiations and additional discounts on brand-name drugs, there could be consequences on the Part D side, warns longtime policy expert Deborah Williams. “It’s easy to be enthusiastic about receiving more services with real value to your loved ones. If you dig a little deeper, the suggested offset will rob Peter (the Part D insurers and their enrollees) and increase the Part D premium by removal of rebate offsets for the negotiated drugs) to pay [Paul] for it,” says Williams, founder of Health Policy Insights, LLC, and a former director at Pfizer. “This may be the single worst time in the last 20 years to propose it as Medicare struggles to keep premium costs under control in 2025 and will likely see the same problem — if not worse — in 2026.”

To others, the timing couldn’t be more appropriate.  

“We haven’t had a major upgrade in Medicare since the drug benefit in 2003,” adds Gorman, who worked at the predecessor to CMS before founding Gorman Health Group in 1996. “This one’s long overdue, and it’s a very important means of supporting the economy and literally millions of people facing this.”

This story originally appeared in AIS Health's premium publication Radar on Medicare Advantage.