A provision included in the recently enacted budget law will now make it much easier for Medicare Advantage (MA) plans to offer a wide array of supplemental benefits within their plans. This will create new opportunities for plans and could result in MA beneficiaries receiving many new benefits.
Medicare Advantage is the private health plan option available to people with Medicare. The program has grown rapidly over the last decade, from nine million beneficiaries in 2008 to over 20 million enrolled today. Medicare beneficiaries are choosing MA for a variety of reasons, but primarily because the private plans are able to offer more coverage for lower cost sharing than what is available through Original Medicare. If the MA plan, after providing Medicare’s medical benefits, has extra funds in its annual “bid,” it can offer health-related supplemental benefits, such as dental or vision coverage. Most MA plans offer supplemental benefits.
To date, MA plans have been constrained in what they can offer as a supplemental benefit. Those constraints are:
- Benefit Uniformity: MA plans must offer identical benefits to all Medicare beneficiaries in a given plan. This means any supplemental benefit must be made available to beneficiaries across all of the plan’s service area, making many potential supplemental benefits cost prohibitive.
- Meaningful Difference: MA plans can only offer a limited number of plan options in a given service area and each option must be “meaningfully different.” This prevents an MA plan from varying options based on supplemental benefits.
- Health-Related: MA supplemental benefits must be “health related.” The Centers for Medicare and Medicaid Services (CMS), which regulates MA plans, has applied this definition to disallow a number of proposed supplemental benefits.
- Marketing: CMS has extensive rules governing the sale of MA plans. These rules limit how supplemental benefits can be marketed, and also require CMS to review/approve marketing materials prior to use.
New Benefit Flexibilities: Over the last year, CMS set in motion a number of policies that will dramatically change the flexibilities available to MA plans in offering new supplemental benefits and combinations of benefits. Flexibilities include:
- Waiving the uniform benefit rule to allow for benefits specific to particular chronic conditions (i.e., $0 podiatry visits for people with diabetes).
- Waiving the uniform benefit rule to allow for benefits specific to particular geographic areas (i.e., transportation to medical appointments for beneficiaries in a rural county).
- Eliminating meaningful difference review.
- Limiting the scope of marketing review to make it easier to communicate about benefits without going through the lengthy CMS review/approval process.
Now, through the recently-passed Bi-Partisan Budget Act of 2018, Congress has significantly broadened the definition of Medicare Advantage supplemental benefits for people with chronic illnesses to benefits that “have a reasonable expectation of improving or maintaining the health or overall function of the chronically ill enrollee and may not be limited to being primarily health related benefits.”1 Starting in plan year 2020, these new benefit flexibilities, coupled with the continued growth of the MA program, create an unprecedented opportunity for MA plans to offer new supplemental benefits that could include:
- Dietary and nutritional supplements.
- Home improvements that increase beneficiary safety.
- Respite, caregiver supports and companionship services.
- Medical safety interventions such as in-home medicine cabinet checks and expired medicine disposal.
- Transportation to pharmacies and wellness activities.
For stakeholders focused on improving care for people with particular chronic conditions, these new flexibilities provide a new opportunity for MA plans to adopt leading practices from other markets—particularly Medicaid—that address social and activities of daily living needs of vulnerable people through the Medicare program. Practices that have been demonstrated to improve beneficiary health while reducing costs, such as higher acuity care, would likely be of particular interest to MA plans.
1 Sec. 50322(a)(2)(D)(ii)(I), H.R. 1892, Bipartisan Budget Act of 2018, 115th Congress (2017-18).