Medicare Advantage (MA) Special Needs Plans (SNPs), and Institutional-SNPs (I-SNPs) in particular, are growing at a rapid pace, but so is the general MA program, with the Congressional Budget Office pegging the overall market penetration of private Medicare plans north of 33 percent of the entire Medicare universe. 

Fred Bentley, managing director, Avalere Health, says that number is expected to eclipse 40 percent within five years and could go even higher in that time frame.

Not Evenly Distributed

But, national numbers do not tell the entire story, for even with the high MA take-up rate among the nearly 60 million Medicare beneficiaries, the MA market is uneven across the country, with some locales seeing a lot of offerings, as in Oregon, and others not so much. 

“There are still some counties with limited MA penetration, and this is based entirely on the level of plan payments” from the Centers for Medicare & Medicaid Services (CMS), Bentley says. “Generally speaking, in rural markets there is not much MA.”

In discussing the characteristics of traditional Medicare vs. MA beneficiaries, the question of whether MA enrollees are higher-acuity is not clear-cut. “Ten years ago MA plan members were healthier and younger than the traditional beneficiary, but that is no longer true. In my work with MA plans, it is clear they are managing higher-acuity patients as well now,” he says.

In offering MA plans, most insurers use the zero-premium model, which means that supplemental benefits are what separates the competition when it comes to marketing plans, Bentley says, such as dental or optical options. 

One thing is for certain is that there will be more benefits offered by most MA plans for 2020 after CMS made changes to give insurers more flexibility. The new allowances actually were released in 2018, but not in time for most MA plans to implement for the current plan year.

“The two most important points are that CMS relaxed what can be covered through supplemental benefits, like nonmedical services. Basically, it gives plans the ability to pay for meals, transportation, some kind of housing,” he says. There are also allowances for items like wheelchair ramps at home, or to pay some portion of adult day care. 

The other modification is in nonskilled services. “You can cover these services if they can contribute to improving health,” Bentley says.

Supplemental Benefits Selling

Danielle Roberts, co-founder of Boomer Benefits, a licensed insurance agency, handles MA, Part D, and
Medigap policies across the country. She says her business has seen a definite shift to MA in recent times.

Danielle Roberts“Medigap, even a few years ago, was the mainstay but now we have one-third of Medicare-eligible people enrolled in MA,” Roberts says. 

Part of that is due to the rising cost of health care in general, with people looking to save money with the more flexible options in MA and better benefits. “One big selling point with MA is the consumer loves the idea of having ancillary services available, like dental and gym membership, for example,” she says.

The bigger picture for Medicare seems to be pointing to more MA, more privatization of the program, Roberts says. “I am almost seeing Medicare encouraging MA plans.”