Uptake of New Medicare Advantage Supplemental Benefits in 2019

Medicare Advantage (MA) plans must provide coverage for all benefits that are covered by traditional fee-for-service (FFS) Medicare. However, they may also offer extra, supplemental benefits that are not covered by FFS Medicare, such as dental coverage and eye glasses. Supplemental benefits must meet certain criteria (see Figure 1), including: they must not be covered by traditional FFS Medicare; they must be primarily health-related; and the MA plan must incur a direct medical cost for the benefit. Nearly all MA plans offer at least one type of supplemental benefit. For example, in 2014, 97 percent of MA plans offered at least one extra vision, hearing or dental benefit, and 42 percent offered all three.

Figure 1. Medicare Advantage Supplemental Benefits

CMS Expands Supplemental Benefits

Earlier this year, the Centers for Medicare and Medicaid Services (CMS) issued guidance expanding what it would consider an allowable supplemental benefit beginning in 2019. Under CMS’ new expanded definition, plans may offer new types of supplemental benefits to enrollees, including home-based palliative care, non-skilled in-home support and services, and non-opioid pain management. CMS also expanded certain types of benefits that were previously allowed. For example, CMS will now allow MA plans to offer temporary home modifications, such as stair rails and treads, in addition to bathroom safety devices that were previously allowed, such as grab bars in the shower. CMS expects that plans will experiment with new benefit offerings and make determinations about what is effective in keeping patients safely in the home and out of the hospital and emergency room.

A new report by the actuarial consulting firm Milliman highlights the uptake of new supplemental benefits by MA plans. In total, Milliman identified 102 plans that are set to offer one or more of the new supplemental benefits in 2019, representing roughly 3 percent of MA plans nationally. The report does not break down the number of plans that may be offering an expanded version of a previously allowed benefit, so the actual uptake of the new flexibilities is likely higher than it appears. A breakdown of how many plans will offer the new benefits is represented in Figure 2.

Figure 2. Summary of Expanded Supplemental Benefits in 2019

MA plans had to consider multiple factors when designing bid and benefit packages for 2019, including whether or not to offer new benefits and to what extent. The Long-Term Quality Alliance (LTQA), a community of organizations focused on improving the lives of those with functional limitations, recently interviewed several MA organizations to analyze their response to the new opportunities in supplemental benefits. Most MA organizations welcomed the new flexibilities and expressed interest in exploring offering new benefits. However, they were challenged by several factors, including:

• The lack of clarity in CMS guidance as to what would be allowed and what restrictions would be in place;
• The compressed timeline between the issuance of the guidance and the deadline to submit 2019 bid and benefit packages; and
• Uncertainty around how to properly communicate new benefits to enrollees.

As a result, many MA plans are viewing 2019 as an experimental year in which to test new benefits on a limited scale to determine what achieves the goals of improving care while creating efficiencies in the health care system. If they determine that new benefits are working to improve the health of their enrollees, they will consider scaling the benefits up in future years. The LTQA report summarizing these interviews can be found here.

More Changes Coming in 2020

While 2019 is largely seen as a test year for new benefits, 2020 is likely to see even more innovation and uptake of new benefits. Earlier this year Congress passed, and President Trump signed into law, the Bipartisan Budget Act of 2018, which included several provisions impacting the MA program. Specifically, the law further expands supplemental benefits beginning in 2020 by eliminating the requirement that benefits be “primarily health-related.” By expanding the definition of supplemental benefits beyond this standard, Congress has opened the door to offer benefits that directly address social determinants of health, such as nutrition and social isolation. The law requires that these new benefits be targeted to individuals with chronic conditions. CMS will issue guidance early in 2019 defining what this will mean in terms of the types of benefits MA plans may offer and to which beneficiaries.