Crafting Medicare Advantage plans: Here’s what to consider

Let’s start with the basics. Medicare Advantage (MA) plans are an “all-in-one” alternative to original Medicare and offered by private companies approved by Medicare. When it comes to the fastest-growing segment in health insurance, MA plans may be surpassing them all. In fact, MA beneficiaries have doubled to 24 million since 2010 and projections show that MA plans will account for nearly half (47%) of total Medicare plans by 2025. So, benefit advisors, now is the time to get MA and the many changes that come with it on your radar.

Where do supplemental benefits come into play? The rules of the MA game continue to change rapidly, based on regulatory changes from the Centers for Medicare and Medicaid Services (CMS). As supplemental benefits increase in value, advisors should be aware of the impact on the market when crafting the best strategy for clients.

Opportunities stemming from legislation

CMS announced a new policy in 2019 that expanded the definition of health-related supplemental benefits. For the 2020 plan year, CMS expanded supplemental benefits for chronically ill MA enrollees to include all benefits that have a reasonable expectation of improving or maintaining the health or overall function of the enrollees. This could include meal delivery, service dog support, structural home modifications and more. With 68% of MA enrollees having two or more chronic conditions, this change alone made a big impact.

Then in May 2020, CMS announced that by 2021, MA carriers could count supplemental benefit spending in the numerator for medical loss ratio (MLR) calculations, and that eligibility for supplemental benefits would go beyond the set of specific conditions outlined in the Medicare Managed Care Manual (Chapter 16b). This means supplemental benefits can now be part of what the MA carriers are paid to provide, accelerating the inclusion of more supplemental benefits. Advisors should continue to follow the impact of this legislation.

Meeting consumers where they are now

A positive member experience begins with understanding the unique needs of consumers. And as these needs and expectations have changed — especially as a result of the COVID-19 pandemic — health insurance coverage has greatly expanded. 

We now see health plans expanding coverage from traditional doctor and hospital visits to include various wellness initiatives, mental health coverage, and alternative treatments, all of which have the potential to positively impact employee health.

This trend of benefits expansion has carried over into the MA space. As health care consumers demand more supplemental benefit offerings, Medicare specialists should take note. An incredible opportunity exists to conveniently deliver benefits that entice consumers and make a real difference in their post-retirement life.

To get the most out of this opportunity — and to help consumers reap the most benefits — I recommend advisors take the time to understand three things:

 1. Offerings available

Supplemental benefits cover a wide range, from dental needs to pet control. Look into the full list, as well as what new regulations have made more favorable to offer. Ultimately, learn which plan providers offer which supplemental benefits.

2. Delivery of supplemental benefits

Several platforms and processes exist for delivering supplemental benefits, and you’ll need to find the one that delivers the best client experience. For example, some processes require members to purchase benefits up front and then submit claims for reimbursement. Others take a simplified approach by loading funds onto a card for easy swiping.

 3. Individual client needs

Compare what’s out there to what your clients need. The more you understand your clients’ life circumstances, the more tailored you can make your plan recommendations. 

What’s to come

Consumers have come to expect simple, convenient, and smart solutions in every area of life. As we look ahead to the rest of the year, benefits leaders would do well to closely monitor regulatory changes related to MA and supplemental benefits, but also keep in mind what consumers are looking for and would benefit from. As more and more Americans age into Medicare, advisors will want to make sure they’re aware of how supplemental benefits can help this segment of the population now and in the years to come.

Brian Colburn is SVP Corporate Development & Strategy at Alegeus.