Earlier this year, Congress and the Trump Administration for the first time allowed Medicare Advantage plans to offer their members non-medical supportive services such as transportation and home meals. As insurers begin to roll out their plans for Medicare’s 2019 open season enrollment, we are starting to see what these new benefits are going to look like.
Relatively few plans will offer the supplemental services in 2019. Because the government issued guidance about what the plans could offer just a few months ago, insurers had little time to put together benefit packages. Their actuaries, who like to price policies based on experience, are working with a product that they know little about. Marketers are unsure which additional services will attract consumers. And, most of all, this is all very new and insurers are, well, cautious.
But some plans have taken the leap. One early adopter is Anthem Inc., which will include additional benefits through two separate programs.
Marc Russo, President of Anthem’s Medicare business, says he wanted to be a first mover, but acknowledges the uncertainties: “We are experimenting. We are going to learn what members like and don’t like, and how to administer these benefits.”
Take a look at Anthem’s benefit packages and the experimental nature of the effort is clear. Not all Anthem MA plans will offer the extra benefits, but the firm will make them available in a dozen states. They’ll be sold under different brands and offer two very different benefit models. In one, consumers will choose one benefit from a suit of six services. In the other, they’ll be able to access a full package of nine benefits.
Two benefit models
Anthem will offer consumers in six states (Georgia, Indiana, Kentucky, Missouri, Ohio, Virginia, and Wisconsin) a plan called Essential Extras. In Missouri, for instance, the added benefits will be available only to enrollees in an HMO called Anthem MediBlue Plus and through Anthem MediBlue Dual Advantage, which is a kind of managed care plan known as a Special Needs Plan (or SNP).
A similar program, called Everyday Extras, will be sold through Amerigroup in Tennessee, Texas, and New Jersey. Under either plan, members would choose one of the following additional annual benefits at no extra cost:
- Up to 16 home delivered “healthy’ meals per health event, or no more than 64 meals per year. A qualifying health event may be a hospital discharge, or if a member is very overweight or has severe uncontrolled diabetes.
- Up to 60 one-way trips per year to health-related appointments or other covered services.
- Up to 124 hours of support from a home health aide or similar assistance.
- A $500 allowance for safety devices such as shower stools, reaching devices, or temporary wheelchair ramps.
- Up to 1 visit per week for adult day services.
- Up to 24 acupuncture and/or therapeutic massage visits.
The model in California and Arizona will be quite different. There, members will not have to choose.
They’ll be able to access a limited number of home delivered meals, in-home support, respite care, adult day services, transportation, a fitness program, acupuncture and/or therapeutic massage for pain management, and an outreach program aimed at addressing isolation and loneliness.
Limited, but revolutionary
Under both models, case managers to help members navigate these additional benefits.
These supports are, of course, very modest. For example, for someone with limited ability to bathe or dress on their own, 124 hours of personal care—roughly two hours per week—is not going to make much difference in their quality of life.
But while the benefits are limited, Anthem’s product is revolutionary. For the first time, older adults will get these kinds of critical supportive services through widely-available Medicare plans. About one-third of Medicare enrollees are in MA plans. In 2017, Anthem insured about 3 percent of MA participants.
This experiment will answer some big questions over the next few years: For consumers, of course, the key is whether these relatively modest benefits will improve their quality of life. Russo says that is his goal: “It is really around adding benefits and services that are going to improve the lives of our members and their ability to live healthy, active lives.”
Connecting the dots
For their part, the plans will learn the answers to two fundamental questions: How much will adding these services cost, and do consumers want to buy them?
The net cost issue is critical. Plans will have to spend more to provide these extra services. They hope these extra benefits will help keep their members as healthy as possible and avoid big-ticket medical costs such as hospitalizations and emergency room visits. If they do, these kinds of plans will take off. But nobody knows if this theory will hold up.
“It’s really hard to connect the dots because there are so many variables that contribute to cost,” says Russo, “We do believe that its likely going to help with costs but we’re not formally counting on savings from it.”
How will consumers respond?
The other unknown is how consumers will respond to these new benefits.
- Will they give Anthem and other first movers a big marketing advantage as Baby Boomers look for extra supports to help them stay at home as they age?
- Will those extra benefits attract a disproportionate share of very sick seniors who inevitably will drive up premiums and make the model unsustainable?
- Will consumers respond to these limited benefits by looking for ways to supplement coverage through, for example, private long-term care insurance? Or will a public catastrophic insurance plan fill the gap?
For now, there are far more questions than answers. But that’s what makes this experiment so important.