Centers for Medicare and Medicaid Services (CMS) overhauls the Direct Contracting payment model

https://mailchi.mp/7788648545f0/the-weekly-gist-february-25-2022?e=d1e747d2d8

On Thursday CMS announced it will replace all versions of its Global and Professional Direct Contracting (GPDC) model, which allowed primary care providers to take full or partial risk on managing cost of care for traditional Medicare beneficiaries, after progressive Democrats raised concerns about whether a growing presence of Medicare Advantage insurers and private equity-backed groups in the model might compromise patient care and access in the traditional Medicare program. GPDC will be replaced with a new three-year demonstration called Accountable Care Organization Realizing Equity, Access and Community Health (ACO REACH), to start enrollment in 2023. The 51 current participants in the GPDC model can move into ACO REACH as long as they meet new requirements, which include developing plans to identify and address health disparities, and ensuring providers control three quarters of governing boards (as compared to a quarter in the GPDC model). Private equity and insurer applicants can still apply, but must demonstrate a track record of direct patient care, delivering quality outcomes, and serving vulnerable populations.

The GistACO REACH is largely a “re-skinning” of the Direct Contracting program, rather than a significant overhaul. Physician, health system, and ACO groups, who were concerned that the program would be canceled altogether, were pleased with the announced changes to the model, although debate continues on whether the new guardrails will effectively address concerns around for-profit insurer and investor participation.

Like Direct Contracting before it, ACO REACH will be an important vehicle for risk-ready providers to move more extensively into full-risk contracting, without launching a plan or partnering directly with a MA insurer. 

Mayo Clinic halts scheduling of out-of-network Medicare Advantage patients

https://www.healthcarefinancenews.com/news/mayo-clinic-halts-scheduling-out-network-medicare-advantage-patients

The Mayo Clinic in Minnesota is no longer scheduling appointments for patients in most Medicare Advantage plans, and has been gradually notifying patients throughout the year, in a move that could have consequences for insurers operating plans in the area, according to a Mayo Clinic spokesperson.

Some insurers, such as UnitedHealthcare, have been negotiating with the Mayo Clinic to bring them in-network for Medicare Advantage, in some cases asking them to outline their requested terms, but Mayo to date has yet to send out proposals.

Mayo has long been out of network for most Medicare Advantage plans, but has historically treated out-of-network MA patients and accepted their benefits, according to Mayo Clinic spokesperson Karl Oestreich.

According to the Star Tribune, the change occurred because Mayo saw a significant increase in patients covered by “non-contract” MA insurers. That increase, officials said, threatens to crowd out patients covered by in-network insurers.

Non-contract MA plans are those in which insurance companies have not negotiated payment rates for services with Mayo.

UnitedHealthcare, which has been out of network, is negotiating to bring Mayo in-network for MA members, according to Dustin Clark, vice president for communications at UHC.

“We have asked Mayo Clinic to outline requested terms to join our network for Medicare Advantage and haven’t received a proposal,” he told Healthcare Finance News. “We are committed to reaching an agreement at an affordable cost for the people we serve. We stand at the ready to work with Mayo to end this disruption.”

For UHC, it’s especially important that MA patients who traditionally received care at Mayo can continue to do so in the future.

Although Mayo Clinic does not participate in our network for Medicare Advantage, many of our members have received treatment from its physicians as part of their out-of-network benefits,” said Clark. “We understand how difficult this situation is for some of our members, which is why we are working with Mayo to ensure our Medicare Advantage members who are currently undergoing treatment or have an established relationship with the clinic can continue to see their physician.”

Mayo Clinic spokesperson Karl Oestreich said that medical need is the primary criteria for obtaining an appointment.

“In situations where medical need does not apply and to ensure appointments remain available for our Mayo Clinic patients, we no longer schedule routine visits for those whose coverage does not include Mayo Clinic,” he said. “Continuity of care and relationships with existing local and regional patients won’t be compromised.”

The primary issue, said Oestreich, is capacity, not reimbursement. He said Mayo doesn’t have the capacity to serve an ever-increasing number of patients, and needs to remain a good steward with its contracted plans.

“There was not a policy change, but a shift in enforcement to ensure Mayo has access for our contracted plans (not just Medicare) and those who truly need Mayo’s medical expertise,” he said. “This long-standing policy applies to all payers, not just Medicare Advantage.”

“The impact is to non-contract Medicare Advantage plans,” said Oestrich. “Mayo does not have contracts with these plans. Mayo is open to entering new contracts, but also must keep in mind the impact on capacity to ensure that we can continue to see those patients (regardless of payer) who are in the greatest need of the care Mayo provides.

“We understand that affected patients may be disappointed and frustrated. Patients should always ask their brokers and insurers whether their plans specifically have in-network coverage at Mayo Clinic.”

THE LARGER TREND

UnitedHealthcare, which already has significant market control with its MA plans, said it will strengthen its foothold in the space by expanding its MA plans in 2022, adding a potential 3.1 million members and reaching 94% of Medicare-eligible consumers in the U.S.

While UnitedHealthcare has a massive foothold in the Medicare Advantage space, it underwent scrutiny from the federal government earlier this month, when the Centers for Medicare and Medicaid Services blocked four Medicare Advantage plans from enrolling new members in 2022 because they didn’t spend the minimum threshold on medical benefits. Three UnitedHealthcare plans and one Anthem plan failed to hit the required 85% mark three years in a row.

Medicare Advantage plans are required to spend a minimum of 85% of premium dollars on medical expenses. Failure to do so for three consecutive years triggers the sanctions.

For UHC, the penalties apply to its MA plans in Arkansas, New Mexico and the Midwest, which encompasses Missouri, Kansas, Nebraska and Iowa. UHC plans cover about 83,000 members, and the Anthem plan covers about 1,200 members. They cannot offer select plans to members until 2023, assuming they hit the 85% threshold next year – what’s called the medical loss ratio. If they fail to hit the threshold for five years in a row, the government will terminate the contracts.

UHC representatives told Bloomberg that it missed the 85% benchmark in certain markets in part because of patients deferring medical care due to the COVID-19 pandemic.

MA payers cutting premiums to attract enrollees

Last week, we examined how the fast-growing Medicare Advantage (MA) market remains heavily concentrated among a handful of large carriers. But amid this concentration, consumers have more options than ever before, both in terms of carriers and plans, as shown in the graphic below. 

The average MA enrollee can now choose from among 39 health plans offered by nine different payers, the majority of which feature $0 insurance premiums. An increasing number of plans also now offer a variety of non-medical benefits. 

Landing an MA consumer soon after they become eligible is critical for carriers, as more than seven in 10 Medicare beneficiaries stick with the plan they have year after year. While this “stickiness” may suggest enrollees are satisfied with their current coverage, it also calls into question whether the MA marketplace is actually working as intended. 

With another revenue boost to MA plans proposed for 2023, competition between plans—as well as consolidation among carriers—will continue to heat up, especially as the number of Medicare-eligible Americans will increase by nearly 50 percent over the next three decades.

Why Medicare’s Value-Based Payment Models aren’t working

CMS' Value-Based Programs | CMS

 A commentary piece in Health Affairs argues that CMS’s value-based payment (VBP) initiatives have not reached their full potential because they fail to take into account conflicting market dynamics.

The authors argue that VBP models won’t take hold unless CMS both increases the “carrots”, or positive incentives, that market dominant providers receive to support true care transformation, and sharpens the “sticks” by requiring participation in accountable care organization (ACO) models, decreasing the attractiveness of fee-for-service (FFS) payments, and banning anti-competitive commercial deals that discourage steering referrals toward lower-cost providers. 

The Gist: To date, CMS’s VBP efforts have largely fallen short of their two primary objectives: transforming care at scale across the country, and generating meaningful savings for the federal government.

With more and more seniors choosing Medicare Advantage (MA) each year, the federal government clearly views MA as the primary vehicle to control Medicare cost growth in the future—although savings will ultimately hinge on CMS cutting payments to insurers in the future. 

Over time, continuing to foster the growth of MA may prove more successful than overcoming the myriad complications of FFS-based VBP programs.

CMS releases 2023 Medicare Advantage and Part D Advance Notice

https://www.healthcarefinancenews.com/news/cms-releases-2023-medicare-advantage-and-part-d-advance-notice

The agency’s end goal for Medicare Advantage is to match CMS’ vision for its programs as a whole, with an emphasis on health equity.

On Wednesday, the Centers for Medicare and Medicaid Services released proposed payment policy changes for Medicare Advantage and Part D drug programs in 2023 that are meant to create more choices and provide affordable options for consumers. 

The Calendar Year 2023 Advance Notice for Medicare Advantage and Part D plans is open to public comment for 30 days. This year, CMS is soliciting input through a health equity lens on the approach to some future potential changes.

The agency’s end goal for Medicare Advantage is to match CMS’ vision for its programs as a whole, which Administrator Chiquita Brooks-LaSure said is “to advance health equity; drive comprehensive, person-centered care; and promote affordability and the sustainability of the Medicare program.”

CMS is proposing an effective growth rate of 4.75% and an overall expected average change in revenue of 7.98%, following a 4.08% revenue increase planned for 2022.

WHAT’S THE IMPACT?

CMS is requesting input on a potential change to the MA and Part D Star Ratings that would take into account how well each plan advances health equity. 

The agency is also requesting comment on including a quality measure in MA and Part D Star Ratings that would assess how often plans are screening for common health-related social needs, such as food insecurity, housing insecurity and transportation problems.

The Health Equity Index has been tasked with creating more transparency on how MA plans care for disadvantaged beneficiaries. 

Additionally, CMS is requesting input on considerations for assessing the impact of using sub-state geographic levels of rate setting for enrollees with end-stage renal disease, particularly input regarding the impact of MA payment on care provided to rural and urban underserved populations and how such payment changes may impact health equity.

Other areas in which CMS is soliciting input include a variety of payment updates, a new measure concept to assess whether and how MA plans are transforming care by engaging in value-based models with providers’ and updates to risk-adjustment models to continue to pay appropriately for people enrolled in MA and Part D plans.

Public comments on the Advance Notice must be submitted by March 4. The Medicare Advantage and Part D payment policies for 2023 will be finalized in the 2023 Rate Announcement, which will be published no later than April 4.

REACTION

The proposed rule has already elicited reaction from various organizations, including Better Medicare Alliance.

“As we continue to review the Advance Notice in further detail, we appreciate that CMS has offered a thoughtful proposal that will help ensure stability for the millions of diverse seniors and individuals with disabilities who count on Medicare Advantage,” Mary Beth Donahue, president and CEO of the Better Medicare Alliance, said, adding that the proposal furthers the shared goal of improving health equity.

Medicare Advantage has proven its worth for seniors and taxpayers – providing lower costs, meaningful benefits that address social determinants of health, better outcomes and greater efficiencies for the Medicare dollar,” she said. “A stable rate for 2023 ensures this work can continue. On behalf of our 170 Ally organizations and over 600,000 beneficiary advocates, we applaud CMS for putting seniors first by issuing an Advance Notice that protects coverage choices, advances health equity and preserves affordability for beneficiaries.”

AHIP also responded, with President and CEO Matt Eyles pointing out that for 2022 the average Medicare Advantage monthly premium dropped to $19, down more than 10% since 2021.

“We agree that MA plans play an essential role in improving health equity and addressing the social determinants of health that impact millions of seniors and people with disabilities,” he said. “We support CMS soliciting input on ways to advance these important goals.

“Medicare Advantage enjoys strong bipartisan support because it provides America’s seniors and people with disabilities with access to affordable, high-quality healthcare services,” said Eyles. “We will continue to review the 2023 rate notice and look forward to providing constructive feedback to CMS during the comment period.”

THE LARGER TREND

CMS’ Advance Notice follows a recent congressional letter in which 346 bipartisan members of Congress declared support for Medicare Advantage and urged the agency “to provide a stable rate and policy environment” for the program in 2023.

A December 2021 Morning Consult poll showed that 94% of Medicare Advantage beneficiaries are satisfied with their coverage, while 93% believe that protecting MA should be a priority of the Biden administration.

Payers discuss Medicare Advantage (MA) misses at JP Morgan healthcare conference

https://mailchi.mp/92a96980a92f/the-weekly-gist-january-14-2022?e=d1e747d2d8

2021 JP Morgan Healthcare Conference | Zoetis

Large insurers Humana and Cigna, along with “insurtech” startups Bright Health and Alignment Healthcare, all lowered expectations for their MA membership growth after missing 2022 enrollment targets. The companies blamed fierce competition for the nation’s estimated 29.5M MA lives, and highlighted a focus on diversifying revenue through other business arms like healthcare delivery and service sales.    

The Gist: Insurers’ missed expectations are leading some to question whether the MA market is beginning to weaken, but these concerns are overblown, with last fall’s enrollment affected by the pandemic, which hindered brokers’ ability to reach seniors. 

Some MA-focused startups are finding challenges in their attempts to scale, and their stock prices will continue to retreat from the lofty valuations that drove their public offerings.

Insurers still have plenty of running room to grow their MA books of business, but will face increasing scrutiny of their ability to manage patients and control costs for the aging population.

CVS wants to employ doctors. Should health systems be worried?

https://mailchi.mp/96b1755ea466/the-weekly-gist-november-19-2021?e=d1e747d2d8

HealthHUB | CVS Health

We recently caught up with a health system chief clinical officer, who brought up some recent news about CVS. “I was really disappointed to hear that they’re going to start employing doctors,” he shared, referring to the company’s announcement earlier this month that it would begin to hire physicians to staff primary care practices in some stores. He said that as his system considered partnerships with payers and retailers, CVS stood out as less threatening compared to UnitedHealth Group and Humana, who both directly employ thousands of doctors: “Since they didn’t employ doctors, we saw CVS HealthHUBs as complementary access points, rather than directly competing for our patients.” 

As CVS has integrated with Aetna, the company is aiming to expand its use of retail care sites to manage cost of care for beneficiaries. CEO Karen Lynch recently described plans to build a more expansive “super-clinic” platform targeted toward seniors, that will offer expanded diagnostics, chronic disease management, mental health and wellness, and a smaller retail footprint. The company hopes that these community-based care sites will boost Aetna’s Medicare Advantage (MA) enrollment, and it sees primary care physicians as central to that strategy.

It’s not surprising that CVS has decided to get into the physician business, as its primary retail pharmacy competitors have already moved in that direction. Last month, Walgreens announced a $5.2B investment to take a majority stake in VillageMD, with an eye to opening of 1,000 “Village Medical at Walgreens” primary care practices over the next five years. And while Walmart’s rollout of its Walmart Health clinics has been slower than initially announced, its expanded clinics, led by primary care doctors and featuring an expanded service profile including mental health, vision and dental care, have been well received by consumers. In many ways employing doctors makes more sense for CVS, given that the company has looked to expand into more complex care management, including home dialysis, drug infusion and post-operative care. And unlike Walmart or Walgreens, CVS already bears risk for nearly 3M Aetna MA members—and can immediately capture the cost savings from care management and directing patients to lower-cost servicesin its stores.

But does this latest move make CVS a greater competitive threat to health systems and physician groups? In the war for talent, yes. Retailer and insurer expansion into primary care will surely amp up competition for primary care physicians, as it already has for nurse practitioners. Having its own primary care doctors may make CVS more effective in managing care costs, but the company’s ultimate strategy remains unchanged: use its retail primary care sites to keep MA beneficiaries out of the hospital and other high-cost care settings.

Partnerships with CVS and other retailers and insurers present an opportunity for health systems to increase access points and expand their risk portfolios. But it’s likely that these types of partnerships are time-limited. In a consumer-driven healthcare market, answering the question of “Whose patient is it?” will be increasingly difficult, as both parties look to build long-term loyalty with consumers. 

Oak Street faces DOJ inquiry into third-party marketing, transportation relationships

Dive Brief:

  • Oak Street Health, a value-based primary care network for adults on Medicare, is facing a Department of Justice inquiry into its relationships with third-party marketing agents and its provision of free transportation for members.
  • The DOJ is investigating whether Oak Street violated the False Claims Act, per a regulatory filing published Monday. On a call with investors Tuesday, management declined to provide additional information into the government’s request, saying it was too early to know for sure what exactly the agency is investigating but that they’re working to comply.
  • Otherwise, the provider had a generally solid third quarter with better-than-expected revenue and well-controlled medical costs, analysts said. Oak Street increased its full-year 2021 guidance following the results, which beat Wall Street expectations with topline revenue of $389 million, up 78% year over year and a quarterly record for the company.

Dive Insight:

The federal government is increasingly cracking down on alleged fraud, especially in the Medicare Advantage program. In privately run MA plans, CMS pays companies on a per-member basis, then adjusts payments based on the acuity or severity of their member’s health status, as supported by provider data like diagnostic codes. Generally, the sicker the member, the higher the plan’s reimbursement.

That’s led to allegations of plans hiking risk scores to overinflate members’ health needs, resulting in higher payments from CMS. Watchdogs have been finding higher incidence of fraud and abuse as the MA program becomes more popular, growing to cover more than 40% of all Medicare beneficiaries.

Oak Street isn’t a traditional plan itself, but enters into full-risk contracts with Medicare Advantage plans, and via CMS’ direct contracting program, in which it assumes full responsibility for patients’ medical expenses in exchange for a fixed per-member, per-month payment. The Chicago-based company is the latest target of a federal inquiry into whether it violated the False Claims Act.

According to the primary care company, the DOJ sent a civil investigative demand on Nov. 1 asking for information about Oak Street’s relationships with third-party marketers and transportation partners.

Oak Street does provide patients transportation to appointments when they need it and has various ways for finding new patients, including community partnerships, but it’s unclear what the DOJ is specifically investigating, CEO Mike Pykosz told investors.

“We have had no meaningful conversations with the government,” Pykosz said. “I’m not really sure what the link is.”

The CEO noted it’s not unusual for such inquiries to take months to resolve, particularly in the hyper-regulated healthcare industry, but said he wouldn’t speculate further.

A civil investigative demand is a form of administrative subpoena, and doesn’t denote any regulatory or legal action itself. However, it is used by the government to kick off investigating potential False Claims violations, and determine whether there’s sufficient evidence to warrant filing an action, according to the National Law Review.

Penalties for violating the act could range from $11,655 to $23,331 per violation, plus triple damages. Total penalties have resulted recently in some significant payouts from MA participants. Notably, in late August, integrated health system Sutter Health agreed to pay $90 million to settle whistleblower allegations of risk adjustment fraud, in the largest False Claims Act settlement against a hospital system in the MA program.

Analysts noted the inquiry, while in early stages, is a point of concern for Oak Street’s future stock performance.

“This creates a new potential risk factor that we are unlikely to get clarity on for some time,” SVB Leerink analyst Whit Mayo wrote in a note.

Oak Street, which also provides services to patients with a range of insurance options, had an otherwise solid quarter, eclipsing $1 billion of year-to-date revenue for the first time in the company’s history.

The highly infectious delta variant did contribute to higher expenses, as it has with other providers.

Oak Street reported $15 million in costs from COVID-19 admissions in the first half of the year, and another $10 million in the third quarter. COVID-19-related expenses surged in the latter half of August and continued into September, but tailed off early into the fourth quarter, CFO Tim Cook said.

The majority of Oak Street’s patients are in northern U.S. markets, however, which experienced coronavirus surges last year during the winter as more people stayed indoors.

“We will see what happens in November and December,” Cook said. “While COVID costs are going to be lower in Q4, unfortunately we’re not in a world where they’re going to be zero.”

In the quarter, the primary care provider’s medical claims expense doubled year over year to almost $310 million. Oak Street’s medical loss ratio of 82.2% was lower than analysts expected, though management said they expected it to be higher in the fourth quarter.

Pykosz and Cook called out medical costs from new patients brought in during 2021 as a system-wide stressor.

Because diagnoses from 2020 claims are used to determine 2021 risk scores, fewer claims last year could mean lower risk scores and lower payments for plans this year. Oak Street’s patients, especially older adults in low-income communities, used fewer services last year during COVID-19, which resulted in lower revenues this year even as costs expanded.

Management said they expected to get back on track in 2022 as patients new to Oak Street this year will contribute to higher reimbursement next year, closing the current medical-cost gap between tenured and new patients.

“This is certainly an outlier year from every other year we’ve had results,” Pykosz said.

Oak Street, which was founded in 2012 and went public in August 2020 at a $9 billion valuation, reported a net loss of almost $110 million in the quarter, compared to a loss of $59 million at the same time last year.

Oak Street continued expanding its membership and network in the quarter, reporting 69% at-risk patient growth and opening 15 new centers in seven new markets.

Oak Street’s competition in the value-based primary care space has ramped up this year, as peers One Medical acquired a rival value-based medical chain and VillageMD got a hefty new investment from drugstore partner Walgreens.

But Pykosz pointed to Oak Street’s exclusive relationship with senior group AARP and its acquisition of specialty telehealth provider RubiconMD as differentiators, while noting there’s room for a number of players in the space.

“At this point we don’t feel there’s a lot of pressure or competitive dynamics pressuring our performance,” Pykosz said.

In the third quarter, Oak Street served 100,500 risk-based patients, representing 76% of its total patient base. The company expects at-risk patient volume to grow to between 111,500 and 113,500 patients this year.

Medicare, Medicare Advantage enrollees have comparable healthcare experiences

https://www.healthcarefinancenews.com/news/medicare-medicare-advantage-enrollees-have-comparable-healthcare-experiences

Enrollment in Medicare Advantage plans is increasing rapidly, and many insurers are expanding their MA offerings in a bid to grab larger portions of the market share. Medicare Advantage touts itself as having certain advantages over traditional Medicare, such as fitness benefits, coverage for hearing aids and eyeglasses, and limits on out-of-pocket spending.

This begs the question: Are enrollees in the two versions of Medicare fundamentally different, and what are their experiences like in terms of satisfaction?

New analysis from the Commonwealth Fund found that Medicare Advantage enrollees do not differ significantly from beneficiaries in traditional Medicare in terms of their age, race, income, chronic conditions, satisfaction with care, or access to care, after excluding Special Needs Plan (SNP) enrollees. 

Both groups reported waiting more than a month for physician office visits, while similar shares of Medicare Advantage and traditional Medicare enrollees report that their out-of-pocket costs make it difficult to obtain care.

Ultimately, MA and traditional Medicare are serving similar populations, with beneficiaries having comparable healthcare experiences. The care management services provided by Medicare Advantage plans appear to neither impede access to care nor reduce concerns about costs.

WHAT’S THE IMPACT?

Beneficiaries weigh a number of trade-offs when deciding whether to enroll in Medicare Advantage plans or traditional Medicare. Unlike the latter, MA plans are required to place limits on enrollees’ out-of-pocket spending and to maintain provider networks. The plans also can provide benefits not covered by traditional Medicare, such as eyeglasses, fitness benefits and hearing aids. 

Medicare Advantage plans are intended to manage and coordinate beneficiaries’ care. Some MA plans specialize in care for people with diabetes and other common chronic conditions, including Special Needs Plans. SNPs also focus on people who are eligible for both Medicare and Medicaid and on those who require an institutional level of care.

Traditional Medicare and MA enrollees have historically had different characteristics, with MA enrollees somewhat healthier. Black and Hispanic beneficiaries and those with lower incomes have tended to enroll in MA plans at higher rates than others, while traditional Medicare has historically performed better on beneficiary-reported metrics, such as provider access, ease of getting needed care, and overall care experience.

The Commonwealth Fund found that, after excluding beneficiaries in SNPs, beneficiaries enrolled in traditional Medicare do not differ significantly from MA enrollees on age, income, or receipt of a Part D low-income subsidy (LIS), which helps low-income individuals pay for prescription drugs. But beneficiaries in traditional Medicare are significantly more likely than MA enrollees to reside in a metropolitan area and more likely to live in a long-term-care or residential facility.

Beneficiaries in SNPs are different. Given the eligibility criteria for these plans, it’s not surprising that enrollees tend to have significantly lower incomes and a greater likelihood of receiving Medicaid benefits or LIS than other Medicare beneficiaries. 

Enrollment in SNPs for people who require an institutional level of care has been growing rapidly, leading to a similar share of SNP enrollees and beneficiaries in traditional Medicare living in a long-term-care facility.

There are some areas in which Medicare Advantage plans appear to perform better than traditional Medicare. In particular, MA enrollees are more likely than those in traditional Medicare to have a treatment plan, to have someone who reviews their prescriptions, to have someone they can contact for help, and to receive a response to a health query relatively quickly. 

By providing this additional help, Medicare Advantage plans are making it easier for enrollees to get the help they need to manage their healthcare conditions, the report found. Medicare experts have suggested providing a similar service to beneficiaries in traditional Medicare through care coordinators.

The results also raise questions about whether Medicare Advantage plans are receiving appropriate payments. MedPAC estimates that plans are paid 4% more than it would cost to cover similar people in traditional Medicare. 

On the one hand, Medicare Advantage plans seem to be providing services that help their enrollees manage their care, and this added care management could be of significant value to both plan enrollees and the Medicare program. On the other hand, rates of hospitalizations and emergency room visits are similar for beneficiaries in Medicare Advantage plans and traditional Medicare. This calls into question the impact of the added services on healthcare use, spending and outcomes.

THE LARGER TREND

Insurers are expanding their Medicare Advantage offerings at a decent clip, with Humana announcing last week it would debut a new Medicare Advantage PPO plan in 37 rural counties in North Carolina in response to market demand in the eastern part of the state.

Just last week, UnitedHealthcare, which already has significant market control with its MA plans, said it will strengthen its foothold in the space by expanding its MA plans in 2022, adding a potential 3.1 million members and reaching 94% of Medicare-eligible consumers in the U.S.

And for the third straight year, health insurer Cigna is expanding its Medicare Advantage plans, growing into 108 new counties and three new states – Connecticut, Oregon and Washington – which will increase its geographic presence by nearly 30%.

Centene is also getting in on the act, expanding MA into 327 new counties and three new states: Massachusetts, Nebraska and Oklahoma. In all, this represents a 26% expansion of Centene’s MA footprint, with the offering available to a potential 48 million beneficiaries across 36 states.

The Centers for Medicare and Medicaid Services said in late September that the average premium for Medicare Advantage plans will be lower in 2022 at $19 per month, compared with $21.22 in 2021. However, Part D coverage is rising to $33 per month, compared with $31.47 in 2021.

Enrollment in MA continues to increase, CMS said. In 2022, it’s projected to reach 29.5 million people, compared with 26.9 million enrolled in a Medicare Advantage plan in 2021.

Preparing for generations of Medicare growth

https://mailchi.mp/72a9d343926a/the-weekly-gist-september-24-2021?e=d1e747d2d8

The healthcare industry is now at the peak of the long-awaited transition of the Baby Boom generation into Medicare. The “greying” of the Boomers will continue to bring a rapid influx of new Medicare beneficiaries, but this is just the beginning of a protracted period of growth for the program, with the number of Medicare-eligible Americans increasing by more than 50 percent over the next three decades.

Using data from the US Census Bureau, the graphic above shows how the generational makeup of the Medicare population will change across time. The next decade will bring the fastest growth, as the latter half of the Baby Boom generation turns 65. Over that time, the Medicare-eligible population will increase by almost a third. Gen X will begin to age into Medicare in 2029. (Go ahead, take a minute. It hurts.) While fewer in number, Gen X beneficiaries, combined with the longer lifespan of Baby Boomers, will bring no respite from Medicare growth, with enrollment still increasing 11 percent between 2030 and 2040. 

As the country looks at a prolonged period of Medicare cost growth, we’ll be counting on a ballooning workforce of Millennials and Gen Z youngsters—each part of generations even larger than the Baby Boom—to continue to fund the Medicare trust across the next 25 years, when the first Millennials will receive their Medicare cards. (See how it feels?)