January 1 saw substantial changes to Medicare. For the first time ever, Medicare Advantage plans — which provide Medicare benefits through a private-sector health insurer — were given expanded flexibility to begin offering nontraditional, non-health related benefits for the chronically ill. Across the country, plans are now offering benefits from home improvements to massage therapy to fresh produce.
Policymakers, patient advocates and service providers have long posited that such benefits could improve health outcomes, lower costs and help keep people out of the hospital. But according to new research, Medicare Advantage plans’ willingness to offer these new benefits is low for 2020: Only 4.5 million individuals (19 percent of total Medicare Advantage enrollment) in a small number of geographies are enrolled in plans offering at least one new supplemental benefit flexibility.
Arnold Ventures is partnering with Health Management Associates to study the rollout of the new benefits, documenting plan offerings and the experiences of beneficiaries, community organizations and health plan officials.
As Health Management Associates releases its initial analysis of the new benefits, we spoke to Blum about early data and the questions that remain.
This interview has been edited for length and clarity.
What is Health Management Associates’ goal in researching the response to recent changes to Medicare Advantage benefits?
These new benefit flexibilities could be considered the first nationwide experiment to see if financing of non-healthcare services can improve health, reduce total cost of care and improve outcomes. So, we wanted to bring some perspective to the market response to date.
For this first phase of the project, we sought to show what plans are offering and what beneficiaries have access to in terms of these benefits in 2020. First, we broke down the different pathways that plans now have to offer new Medicare Advantage benefits. There are four new flexibilities — or “legislative and regulatory authorities” — that both Congress and the administration have given to plans in order for them to provide more tailored, flexible benefits. So, we showed on a policy level the different authorities and how plans have reacted to them. And second, we tried to give context around how many beneficiaries have meaningful access to these benefits based on plan participation and the level of enrollment in the different plan types.
The paper shows that of those who signed up for private Medicare Advantage plans (36% of the total Medicare population), fewer than 20 percent of beneficiaries are in plans that had access to at least one of these new flexibilities in 2020. Plan adoption and enrollment in plans that offer these benefits is overall quite low.
It is, but there is plan interest. Given the history for how plans begin to adopt new benefit designs — whether dental or other flexibilities the program has afforded in the past — it generally takes time for benefits to disseminate through the program. There are usually market innovators that plans study and then seek to follow. We expect further plan adoption in future years, especially as they respond to the needs of their enrollees in light of COVID-19
We also point out in the paper that there are geographic differences in whether plans are offering these new benefits. Beneficiaries in some parts of the country don’t have access to plans that offer these benefits. That’s not entirely surprising. Historically, plan benefits have varied by geographic area due to a number of factors, such as varying payment rates and competitive dynamics.
One thing that’s really important to highlight from our paper is that even if someone is in a plan offering one of these benefits, they don’t necessarily get access to the service if they do not meet the criteria and are not aware of them. The design and the outreach and education of these benefits are really up to the discretion of health plans.
What surprised you most about the findings?
The diversity in plan responses. Just from looking at the data, we don’t see a clear pattern of “popular” new benefits being offered, a clear geographic pattern or a clear market strategy. That tells us that these are very individual plan decisions that were made, driven by local market decisions. Plans are experimenting, making their own judgments about what to offer and whether they want to try things in a few markets before taking benefits to their broader memberships.
At the end of this first phase of research, what are some of the most pressing questions that remain?
There are a lot of questions. It’s going to be exciting to learn why plans made decisions to offer benefits or not. Was it driven by the populations they serve? By plan culture and commitment to certain services offerings? We can make some projections regarding what drove plans based on geography, but the data doesn’t tell us the full story.
We also want to find out whether a lack of conclusive evidence or data on the cost and quality impacts of these benefits was a barrier for plans. In other words, if plans chose not to offer benefits, how much was that due to a lack of strong evidence that expanding coverage of non-medical benefits results in cost reductions?
Another huge unknown is how beneficiaries in these plans are being made aware of the benefits. Clearly on the plan side there is excitement, but how are plans educating members and promoting the new benefits in a patient-centered way? How are beneficiaries engaged? A huge part of the policy design was to tailor benefits to different beneficiaries given their needs and circumstances, but how that is being implemented really is a key question for our work going forward.
How long will it be before the policy community can gauge whether these benefits are having an impact on overall quality and total cost of care?
I suspect it’s going to take several years to make those judgments. One way to know if these new benefits are providing value is if more plans begin to adopt these benefits in 2021. That will tell us that plans knew these were important benefits and that offering them helps attract members and best serve them.
It also really depends on how engaged beneficiaries are in getting these new services. In other words, if a benefit is offered, do beneficiaries take advantage? And if so, for how long? Some beneficiaries can switch plans throughout the year and others can change plans in the next year. Do people move to plans that choose to offer these benefits?
As I mentioned, some parts of the country don’t have access to plans offering these benefits at all. So if policy makers really want to have the Medicare Advantage program be the vehicle to deliver new benefits to the Medicare program, and if one believes that Medicare beneficiaries — and particularly those with complex needs — should get access to a broader set of benefits, the question is: will more Medicare beneficiaries have an equitable stake in getting access to them?
What are your next steps?
We’ll take a much more qualitative approach in the next phase of the project. Over the coming months we’ll interview plans, beneficiary and patient advocacy organizations and service providers to begin to help answer the questions we raised. We want to understand how these benefits are designed and implemented, the outreach and engagement around them, plus the impact benefits will have and how important beneficiaries feel they are. By early fall we’ll have more work to share for the policy community.