What Payers Should Expect for Medicare Advantage This Open Enrollment Period

Medicare open enrollment is underway and industry insiders are watching the Medicare Advantage market this enrollment season. The federal government has been shaping the private-based Medicare insurance program since it was introduced in 1997, and payers have been eyeing the market ever since. For 2019, tailwinds in the Medicare Advantage market — an aging population with a fair amount of wealth that prefer concierge service — give payers the justification and opportunity to aggressively pursue MA membership. The federal government has also made sweeping changes to make the plan options more competitive. As the open enrollment period marches on, here are the biggest changes for 2019 Medicare Advantage plans.

Payers are Gunning for More Medicare Advantage Members

Competition in the Medicare Advantage space is heating up. Insurer start-ups such as Clover Health and Devoted Health have been created specifically to sell plans to and disrupt the MA market by offering more tech-enabled services, data, and focusing on the customer’s experience. Other newer payers also have been carving out products in the market. Bright Health recently began selling MA plans, for example. During an announcement upon receiving $375 million from Alphabet, the parent company of Google, Oscar Health stated it would enter the Medicare Advantage market in 2020. These upstarts will find legacy insurers ready for a fight when they enter the ring. The largest payers — Humana, Anthem Cigna, UnitedHealth Group and Aetna — are all expanding into new regions and markets to capture Medicare Advantage membership growth in 2019. A large driver of this market behavior relates to the aging of America. Roughly 10,000 Americans age into Medicare eligibility every day, and U.S. Census data projects that 16.4% of the U.S. population will be eligible for Medicare in 2019. Private-based insurance has become a popular option for those aging into the program.

Enrollment is Expected to Increase While Premiums are Dropping

Because payers are offering more MA options, more Americans are able to choose such products. The Centers for Medicare & Medicaid Services (CMS) have projected that 36.7% of Medicare beneficiaries will enroll in Medicare Advantage plans in 2019. That’s a projected 11.5% increase from 2018 when 20.2 million Medicare beneficiaries chose Medicare Advantage plans. Some of the projected growth relates to Medicare Advantage premiums dropping. On average, Medicare Advantage premiums in 2019 decreased from $29.81 to $28 a month, a rate of 6%.

Benefits are Expanding and Shopping Will Be Easier This Year

The fuel feeding the Medicare Advantage market doesn’t stop at more competition and shrinking premium averages. For 2019, CMS is allowing payers to offer Medicare Advantage plan members increased supplemental benefits to chronically ill members, which can include home care services. Forward-thinking payers are trying to lock in membership growth by taking advantage of offering supplemental benefits. Next year, about 270 plans are providing nearly 1.5 million enrollees access to new benefits, including adult day care services, in-home support services, caregiver support services, and home-based palliative care. Anthem, for example, will allow home care benefits in 2019 under the new federal regulations. The payers are using these options to delight customers, make their lives easier and instill loyalty in hopes to bend the cost curve while mitigating customer churn. The government is also making it easier to compare Medicare plan offerings this year. Through an initiative called eMedicare, the agency is attempting to streamline the sign-up process. Shoppers can now window-shop and preview costs with a new online Medicare plan comparison tool. This is adding to the increased expectation from consumers that the healthcare system be easier to navigate and enter the digital age.

Looking to 2020

Payers have locked in their benefits packages for 2019 but many will be viewing how their expanded supplemental benefit offerings, such as non-medical home care services, will be utilized throughout the year. If payers are able to decrease costs while improving patient outcomes for these services, the industry can expect to see an unprecedented growth of supplemental benefits in payer portfolios. Open enrollment for the 2019 period ends on December 7. If you have any questions on home care and how it could fit into your Medicare Advantage portfolio, call CareLinx at 1-855-999-1806 or email us directly at partners@carelinx.com. You can also find more information at carelinx.com/partners.