Medicare Advantage Premiums to Decrease, Benefits to Increase

Published October 29, 2020

On September 24, 2020, the Centers for Medicare & Medicaid Services (CMS) announced that the average premium for a Medicare Advantage (MA) plan in 2021 would drop by an average of 34% compared to the 2017 premium. CMS also revealed that record number of MA plans would be offering in-home benefits.

Of the 738 plans offering MA supplemental benefits in 2021, 430 will be offering in-home support services. These include previously non-covered services such as therapeutic massage and home-based palliative care. These benefits are permitted under the supplemental benefit expansion that was rolled out in 2019.

Strong Movement toward Home-Based Services

In 2020, only 223 plans offered in-home benefits. In other words, the number of plans offering in-home benefits will triple in 2021. Home-based services had been increasing, but the COVID-19 crisis may be responsible for the spike.

Palliative Care

The number of MA plans offering in-home palliative care is set to double between 2020 and 2021. Palliative care is characterized as a holistic approach to medical care, the goal of which is the relief of suffering. Hospice care, by comparison, refers to care that is given after curative therapies are discontinued.  Elderly and disabled people receiving palliative care at home are able to be treated with antibiotics for infections as well as chemotherapeutic agents for cancers. Under the new expanded in-home benefits, it is conceivable that twice the number of patients receiving in-home palliative care in 2020 will be eligible for such services in 2021.

Though COVID-19 certainly drove many state MA plans to adopt in-home palliative care, patient demand for end-of-life care at home had been high for many years. In fact, most surveys record proportions of around 80% of Americans state that they would rather die at home than in a hospital. This suggests a strong likelihood that MA plans will continue to offer palliative care-at-home. A clearer picture will emerge in 2021 when states begin tallying the utilization data for in-home palliative care.

The Increasing Popularity of Telemedicine

The COVID-19 crisis was certainly the impetus behind the enormous increase in the number of MA supplemental benefits being directed toward telehealth. Whereas 58% of plans offered telemedicine benefits in 2020, an extraordinary 94% will be offering the benefit in 2021.

Although the terms “telehealth” and “telemedicine” are often used interchangeably, the Centers for Disease Control and Prevention defines “telehealth” more broadly as ““the use of electronic information and telecommunication technologies to support and promote long-distance clinical health care, patient and professional health-related education, public health and health administration.” By contrast, “telemedicine” refers to “the practice of medicine using electronic communication, information technology, or other means between a physician in one location, and a patient in another location, with or without an intervening health care provider.”

Telemedicine saw the huge spike during the COVID-19 crisis. Virtual office visits became especially popular with MA plan beneficiaries precisely because these patients comprised the group at highest risk of hospitalization and death from COVID-19. As fiscal year 2021 approaches with many states maintaining social distancing rules in place, it is likely that substantial numbers of MA beneficiaries will be partaking of expanded availability of the telemedicine benefit.

Help for Patients with Chronic Conditions

In 2021, around 500 MA plans are expected to provide up to 2.5 million MA beneficiaries with certain chronic conditions access to lower copayments or benefits including meals and transportation. In 2018, CMS expanded its interpretation of the so-called “uniformity requirement” so as to cover patients with diabetes and congestive heart failure. A major driver of the original expansion was the effort on the part of CMS to reduce hospital re-admissions in patients with heart failure, pneumonia, and heart attacks. These costly and preventable readmissions had been proven to be reduced by increased monitoring, including in the context of care received in patients’ homes. The COVID-19 crisis intensified the pressure on keeping vulnerable patients with chronic diseases from having to return to the hospital, as well as attempting to prevent them from having to be admitted in the first instance. Anecdotal evidence suggests that all-cause hospitalizations dropped during the COVID-19 crisis in 2020. It remains to be seen if the reallocation of funds toward in-home services will indeed succeed in reducing readmissions.

Non-Health-Related Benefits

In 2021, 920 MA plans serving 4.3 million MA beneficiaries are scheduled to begin providing “non-primarily health related benefits.” These are meant for individuals with chronic conditions, and the purpose is to provide assistance in self-management of their conditions. Some of these benefits include transportation to supermarkets, home delivery of meals, exterminators, and housecleaning services.

The Caveats

It remains to be seen whether MA-funded in-home care services will meet the usually high standard provided by home care companies to private-pay clients. Most states are going to be relatively limited in terms of the resources that they will be able to offer to MA beneficiaries. It is unknown whether all providers will be able to meet the spike in demand that is likely to occur in 2021. This situation confronts many home care providers in the UK under the Care Act 2014 that mandated several of the in-home services that are soon-to-be offered by MA plans in the US.

One clear conclusion is that the trend toward home-based, decentralized medical care is likely to continue into the post-COVID-19 world.