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Table 1.  New Supplemental Benefits Offered in 2019 by Number of Contracts, Plans, and Enrolleesa
New Supplemental Benefits Offered in 2019 by Number of Contracts, Plans, and Enrolleesa
Table 2.  New Medicare Advantage Supplemental Benefits Offered in 2019 by Contract Characteristica
New Medicare Advantage Supplemental Benefits Offered in 2019 by Contract Characteristica
1.
Livingston  S. Medicare Advantage industry sees slower growth for 2019. Modern Healthcare. January 16, 2019. https://www.modernhealthcare.com/article/20190116/NEWS/190119927/medicare-advantage-industry-sees-slower-growth-for-2019. Accessed March 15, 2019.
2.
Shier  G, Ginsburg  M, Howell  J, Volland  P, Golden  R.  Strong social support services, such as transportation and help for caregivers, can lead to lower health care use and costs.  Health Aff (Millwood). 2013;32(3):544-551. doi:10.1377/hlthaff.2012.0170PubMedGoogle ScholarCrossref
3.
Shrank  WH, Keyser  DJ, Lovelace  JG.  Redistributing investment in health and social services-the evolving role of managed care.  JAMA. 2018;320(21):2197-2198. doi:10.1001/jama.2018.14987PubMedGoogle ScholarCrossref
4.
Centers for Medicare & Medicaid Services. Reinterpretation of “primarily health related” for supplemental benefits. April 2018. https://www.nahc.org/wp-content/uploads/2018/05/HPMS-Memo-Primarily-Health-Related-4-27-18.pdf. Accessed January 25, 2019.
5.
Centers for Medicare & Medicaid Services. CMS announces new model to lower drug prices in Medicare Part D and transformative updates to existing model for Medicare Advantage. January 2019. https://www.cms.gov/newsroom/press-releases/cms-announces-new-model-lower-drug-prices-medicare-part-d-and-transformative-updates-existing-model. Accessed March 18, 2019.
6.
Hatch  O; US Senate Finance Committee; US House of Representatives Ways and Means and Energy and Commerce Committees. Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act of 2017, S 870, 115th Cong, 1st Sess (2017). https://www.congress.gov/bill/115th-congress/senate-bill/870/text. Accessed January 25, 2019.
Research Letter
June 11, 2019

Early Adoption of New Supplemental Benefits by Medicare Advantage Plans

Author Affiliations
  • 1Department of Health Services, Policy, and Practice, Brown University School of Public Health, Providence, Rhode Island
  • 2Warren Alpert Medical School, Brown University, Providence, Rhode Island
  • 3Center for Gerontology and Healthcare Research, Brown University School of Public Health, Providence, Rhode Island
  • 4US Department of Veterans Affairs Medical Center, Providence, Rhode Island
JAMA. 2019;321(22):2238-2240. doi:10.1001/jama.2019.4709

Medicare Advantage enrolled 22 million individuals for 2019 coverage, representing 34% of Medicare beneficiaries.1 Social support services, including transportation and caregiver supports, are known to improve health outcomes and reduce costs.2 The capitated structure of Medicare Advantage could potentially be used to provide these social services through supplemental benefits.3 However, regulations have historically restricted offering nonmedical services.

In April 2018, the Centers for Medicare & Medicaid Services (CMS) issued new rules permitting Medicare Advantage plans to expand the types of supplemental benefits that can be offered to enrollees starting in 2019.4 We analyzed the early adoption of these new supplemental benefits.

Methods

Using publicly available 2019 Medicare Advantage plan benefit and enrollment data provided by CMS, we examined which plans offered new supplemental benefits. New supplemental benefits include adult day care, home-based palliative care, in-home support, caregiver supports, memory fitness, and nonopioid pain management benefits. We determined the number of Medicare Advantage enrollees in each plan offering these new benefits.

Insurance companies enter into contracts with CMS to offer 1 or more Medicare Advantage plans. Within a contract, plans may offer different benefits. Using Medicare Advantage enrollment data in January 2019, we compared the characteristics of plans (ie, plan type, star rating, contract age, for-profit status, and geographic region) that offered new benefits with the characteristics of plans that did not offer new benefits using 2-sided χ2 tests with statistical significance set at P < .05 using Stata version 15 (StataCorp).

Results

In 2019, 592 plans across 85 contracts offered a new benefit. These plans enrolled 4 542 775 Medicare beneficiaries, representing 20.8% of all Medicare Advantage enrollees (Table 1). Adoption was highest for caregiver support (n = 429 plans; 17.7% of Medicare Advantage enrollees) followed by in-home support (n = 118 plans; 2.2% of Medicare Advantage enrollees). Only 2 plans offered adult day care (n = 4935 Medicare Advantage enrollees).

One quarter (24.9%) of enrollees in health maintenance organizations were in plans that adopted new benefits compared with 14.4% of enrollees in preferred provider organizations (P < .001; Table 2). A higher share of enrollees in large contracts were in plans that adopted new benefits compared with enrollees in small contracts (21.6% vs 12.1%; P < .001). Twenty-three percent of enrollees in contracts formed before 2006 were in plans offering new benefits compared with 13.4% of enrollees in contracts formed after 2014 (P < .001). Twenty-seven percent of enrollees in for-profit plans were offered new benefits compared with 3.1% in nonprofit plans (P < .001). There was significant geographic variability in adoption of new benefits, ranging from 35.8% of enrollees in the Mountain Census Division in plans with new benefits compared with 13.6% of enrollees in the East North Central Division.

Discussion

This analysis suggests that in the first year of expansion, there has been limited adoption of new supplemental benefits in Medicare Advantage, with 20.8% of Medicare Advantage enrollees in a plan that offered a new supplemental benefit. Limited adoption may be attributable to plans’ risk aversion amidst changing regulations, a lack of evidence of new benefits’ profitability, or limited time to add new benefits between the regulation change announcement in April 2018 and the benefit proposal due date in June.

Adoption of new benefits varied by the characteristics of plans. Older or larger contracts may have more resources to offer supplemental benefits in their plans than their counterparts. In addition, for-profit plans may be willing to assume greater risk by offering new benefits.

This analysis may be limited by different naming conventions used in publicly reported benefits data, so availability of new benefits may be underestimated. In addition, this analysis represents adoption of these new benefits in the first year they were allowed and does not include a group of pre-existing supplemental benefits whose definitions were expanded to cover additional goods and services through CMS’ new rule (eg, transportation, over-the-counter drugs).

The passage of the Bipartisan Budget Act of 2018, as well as the recently announced expansion of value-based insurance models in Medicare Advantage,5 will further expand supplemental benefits for chronically ill enrollees in 2020.6 These findings provide the first indication of the types of plans that may offer new supplemental benefits.

Section Editor: Jody W. Zylke, MD, Deputy Editor.
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Article Information

Accepted for Publication: March 28, 2019.

Corresponding Author: Kali S. Thomas, PhD, MA, US Department of Veterans Affairs Medical Center, 830 Chalkstone Ave, Providence, RI 02908 (kali_thomas@brown.edu).

Author Contributions: Mr Meyers had full access to all of the data in the study and takes responsibility for the integrity of the data and the accuracy of the data analysis.

Concept and design: All authors.

Acquisition, analysis, or interpretation of data: Meyers, Durfey, Thomas.

Drafting of the manuscript: Meyers, Thomas.

Critical revision of the manuscript for important intellectual content: All authors.

Statistical analysis: Meyers.

Administrative, technical, or material support: Gadbois.

Supervision: Gadbois, Thomas.

Conflict of Interest Disclosures: Dr Gadbois reported receipt of grants from Meals on Wheels America. No other disclosures were reported.

Disclaimer: The views expressed in this article are those of the authors and do not necessarily reflect the position or policy of the Department of Veterans Affairs or the United States government.

References
1.
Livingston  S. Medicare Advantage industry sees slower growth for 2019. Modern Healthcare. January 16, 2019. https://www.modernhealthcare.com/article/20190116/NEWS/190119927/medicare-advantage-industry-sees-slower-growth-for-2019. Accessed March 15, 2019.
2.
Shier  G, Ginsburg  M, Howell  J, Volland  P, Golden  R.  Strong social support services, such as transportation and help for caregivers, can lead to lower health care use and costs.  Health Aff (Millwood). 2013;32(3):544-551. doi:10.1377/hlthaff.2012.0170PubMedGoogle ScholarCrossref
3.
Shrank  WH, Keyser  DJ, Lovelace  JG.  Redistributing investment in health and social services-the evolving role of managed care.  JAMA. 2018;320(21):2197-2198. doi:10.1001/jama.2018.14987PubMedGoogle ScholarCrossref
4.
Centers for Medicare & Medicaid Services. Reinterpretation of “primarily health related” for supplemental benefits. April 2018. https://www.nahc.org/wp-content/uploads/2018/05/HPMS-Memo-Primarily-Health-Related-4-27-18.pdf. Accessed January 25, 2019.
5.
Centers for Medicare & Medicaid Services. CMS announces new model to lower drug prices in Medicare Part D and transformative updates to existing model for Medicare Advantage. January 2019. https://www.cms.gov/newsroom/press-releases/cms-announces-new-model-lower-drug-prices-medicare-part-d-and-transformative-updates-existing-model. Accessed March 18, 2019.
6.
Hatch  O; US Senate Finance Committee; US House of Representatives Ways and Means and Energy and Commerce Committees. Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act of 2017, S 870, 115th Cong, 1st Sess (2017). https://www.congress.gov/bill/115th-congress/senate-bill/870/text. Accessed January 25, 2019.
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