2022 forecast: Medicare Advantage is the industry’s hottest market. Don’t expect that to change next year

https://www.fiercehealthcare.com/payer/medicare-advantage-industry-s-hottest-market-2022-don-t-expect-to-change

The momentum behind Medicare Advantage is only growing as more baby boomers age into eligibility, and experts don’t expect the energy around the program to slow down any time soon.

recent analysis from the Kaiser Family Foundation found that a record 3,834 plans were available for the 2022 plan year in MA, which represents an 8% increase over 2021 and the largest number on the market in a decade.

Open enrollment for Medicare ended Dec. 7, and enrollment numbers will begin trickling out as the year winds down. In 2021, 26 million Medicare beneficiaries, or about 42% of those eligible for the program, were enrolled in an MA plan.

As Medicare Advantage enrollment continues to grow, insurers seem to be responding by offering more plans and choices to the people on Medicare,” the KFF analysts said.

Part of the appeal of MA to an increasingly savvy consumer base is that it offers additional benefits beyond those afforded people in traditional Medicare, such as vision and dental coverage as well as supports for members’ social needs.

Sachin Jain, M.D., CEO of SCAN Health Plan, told Fierce Healthcare that people are increasingly shopping around for plans, building greater awareness of MA as a whole as well as of the different types of benefits beneficiaries could select.

“We’re seeing that consumers are more sophisticated today than they were a decade ago,” he said. “I think people are realizing that fee-for-service Medicare doesn’t cover a lot of things.”

The KFF report shows that more than 90% of non-group MA plans offer some kind of vision, hearing, telehealth or dental benefits and that most (89%) include prescription drug coverage as well. 

Elena McFann, president of Medicare at Anthem, told Fierce Healthcare that throughout the open enrollment period, plans built with benefits that target the social determinants of health and promote whole-person care resonated strongly with members.

Anthem, for example, offers plans that include a slate of essential extra benefits that members can choose from based on what they need the most. Options include grocery cards, transportation benefits and in-home supports.

She said that the grocery benefits and flex cards that allow members to purchase additional hearing, vision and dental coverage have proven particularly popular in this enrollment season.

“What those all point to is the concept of flexibility and helping them lead healthier lives where they really need the help where they are in their journey,” McFann said.

As these benefits prove popular, an increasing number of plans are offering them in tandem. The Better Medicare Alliance released a survey late last month that found the number of plans including supplemental benefits grew by 43% for the 2022 plan year.

The Centers for Medicare & Medicaid Services (CMS) has issued additional flexibilities that allow MA plans to address members’ social determinants of health as the program’s enrollment continues to swell.

Jain said SCAN has seen similar interest in supplemental benefits, and that flexibility afforded to MA plans to adapt to seniors’ needs and expectations is a critical factor in the program’s success.

“When you’re in the business of serving seniors, a lot of what you have to do is anticipate needs that those seniors may not anticipate that they have, give them things they didn’t know they needed,” he said.

In addition, insurers are eyeing non-traditional partners to launch new plans. Anthem teamed up this year with Kroger on co-branded MA plans, and in late 2020 MA startup Clover Health similarly joined forces with Walmart.

McFann said that beneficiaries value plans like these that unite brands they trust and recognize and that partners like Kroger enable insurers to more effectively meet seniors where they are. In its co-branded plans, members can access benefits like Healthy Grocery Cards and stipends to purchase over-the-counter health items.

She said that there has been significant “excitement” around those plans, which are available in four states, during the current enrollment period.

“It gives the Medicare eligibles a sense of familiarity and a sense of comfort, again meeting them on their terms,” McFann said.

However, while many established insurers have set ambitious growth targets in this market and new startups enter the space regularly, they still have plenty of work to do if they want to catch up with the market’s dominant forces: UnitedHealthcare, Humana and Blues plans.

UHC and Humana together account for 45% of the MA market in 2021, according to the KFF analysis. Humana offers plans in 85% of counties and UHC in 74% for 2022.

That means, 89% of Medicare eligibles have access to a Humana plan and 90% have access to a UHC MA plan if they choose, according to the report.

Competition is continuing to grow, though, and both McFann and Jain said they don’t feel the momentum around MA slowing down anytime soon. 

“It is those extras and social drivers of health solutions that really have caught on with the Medicare-eligible segment and we expect to see that expand even further,” McFann said.