Competition Drives Medicare Advantage to Offer Special Benefits in 2022

A quarter of Medicare Advantage plans now offer healthy meals, transportation and other special fringe benefits to chronically ill beneficiaries in 2022, representing a nearly 40 percent increase in carrier use of these non-traditional services compared to last year. new study found.

A report released by consulting firm ATI Advisory on Wednesday said 1,292 Medicare Advantage plans offered special fringe benefits this year, up 383.8% from 267 carriers in 2020. . A better understanding of how the social determinants of health can impact individual conditions and competition in the Medicare Advantage market is driving carrier adoption of these unique products, says Tyler Kromer, ATI partner and co-author of the report.

“We have seen a really significant increase in Medicare Advantage enrollment from 2021 to 2022, and there are a lot of people competing within that growing pie,” Kromer said. “The plans see these benefits as a way to stand out for both new members and current members. They are extremely important.”

The introduction of these benefits came in 2018 after Congress passed the Chronic Care Act, which resulted in legislation allowing Medicare Advantage Plans to offer special additional benefits for the chronically ill. Initially, these benefits were to be primarily health-related, including items such as home care, massage therapy, and support for caregivers. After 2019, authorities allowed plans to offer members non-medical items such as food and transportation. These items are funded by insurers through premiums and rebates, and they can be credited to patients’ medical expenses, allowing payers to reduce their medical loss rate.

2020 was the first year the plans could offer these benefits to subscribers, Cromer said, with Centene and Anthem among the early adopters. As consumers delayed treatment during the COVID-19 pandemic, these benefits have grown in popularity, and plans have increasingly sought to add new types of benefits to avoid returning excess profits to the federal government. CMS has suggested that Medicare Advantage Plans report the amount they spend on these additional benefits.

This year, the most common non-medical special fringe benefits offered by insurers were food, with 763 plans in 42 states and Puerto Rico adopting the product, representing a 121% increase in carriers over last year, it says in the report. The number of plans offering transportation services and general life support has also more than doubled since 2021.

Humana in particular has really redoubled its efforts by offering general life support as a benefit for those enrolled in 2022, helping beneficiaries pay rent, utilities or secure a place in the community for the elderly, said Elexa Rallos, an analyst and co-author. report.

“Plans definitely see this as a way to hopefully get beneficiaries involved. But I think we should note that it’s still early days and plans are still learning how to properly market these benefits,” Rallos said. “We do run into some marketing challenges because those benefits are limited to those with chronic conditions. While they see the opportunities, I think they are still kind of on the right track to make them accessible and make the marketing understandable to their beneficiaries.”

According to the Centers for Medicaid and Medicare Services, the number of beneficiary complaints related to Medicare Advantage third-party marketing organizations more than doubled year-over-year to 39,617 in 2021. The organization has proposed stricter marketing rules for these groups.

Rallos said insurance plan employees, care managers and agents are usually responsible for alerting beneficiaries of these supposed benefits. Although she did not analyze how these services affect consumer premiums, Rallos suggested that many of these benefits are available to plan members at no additional cost.

In the future, she expected to see more plans with flexible benefit structures where they give members a fixed amount, say $1,000, and let them choose how they spend the money on a benefit package rather than a single service. Growth in this area is driving innovation, she says, at startups and digital health providers who are exploring what benefits Medicare Advantage plans can now offer and creating new companies focused on those services.

“We definitely see new players and new providers moving into this space as they realize there is an opportunity to partner with plans and provide these benefits,” Rallos said.

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