Despite Medicare Advantage (MA) plans being recently allowed to cover a wide variety of in-home services and supports, insurers have been slow to roll out new supplemental benefits.
In 2019, only 3% of Medicare Advantage plans offered in-home care services, according to AARP. Some think the tides will turn in 2020 — but even then, roadblocks remain, the biggest being finances, data and implementation.
Jennifer Callahan, director of individual Medicare Advantage product strategy and implementation at Aetna, helped identify those roadblocks during a panel at the Better Medicare Alliance’s MA Summit last month in Washington D.C.
“There’s not been an infusion of money into this pool, so it’s really trying to find that balance between what do we think is impactful … and ROI,” Callahan said. “It’s something we’re like shameful to say, but the government requires the bids to be profitable.”
In other words, MA plans are working with essentially the same budget they had before they were afforded the flexibility to offer members in-home supplemental benefits.
“We’re really talking about reprogramming money,” fellow panelist Robert Saunders, research director of payment and delivery reform at the Duke-Margolis Center for Health Policy, said. “That means plans are probably only going to offer a handful of benefits. Most plans now are offering one — if they’re offering anything — and they probably won’t end up offering more than a handful over time.”
The Duke-Margolis Center for Health Policy is a health policy center at Duke University. The goal is to develop ideas surrounding health reform and help implement them.
Offering even one in-home supplemental benefit can be a tough choice for a plan to make, especially if it means offering a new in-home benefit over something else.
Which benefits are most important to member health and the bottom line? Is, say, meal delivery a better investment than certain dental coverage? Because plans have never offered home care benefits before, it’s hard to tell.
“As an academic, I’m contractually required to say there’s a need for more research,” Saunders joked with summit attendees. “But there is a need for more research in this area, especially as we think about: What is the return on investment? What’s the impact on the patients? And how are we improving health care quality?”
As a whole, the home care industry has long been plagued by data gaps and lack of research. For example, it’s unclear how many home care companies exist nationwide or how many Americans are currently receiving personal care services.
Even when data does exist, it’s not always helpful for MA plans developing benefits. Panelist Nicholas Johnson, principal and consulting actuary at Seattle-based actuarial and consulting firm Milliman, gave cost savings associated with home care as an example.
“The costs that [home care providers] are thinking about are often long-term care costs that are not the liability of the MA plan,” Johnson said. “They need to sell their ability to connect with members and their ability to actually deliver. [That] is just as important as the costs that they’re going to save.”
Johnson, who works largely with small and medium-sized health plans, says home-care providers can probably expect to see the little guys experiment more with MA home care benefits in the short-term than big-name, national insurers.
While some smaller plans view the benefits as an enrollment booster, others are exploring the flexibilities as a valuable way to address social determinants for their members, he said.
“I have one very small client that is offering this transportation benefit to … church and also potentially a beauty salon under the expanded flexibility,” Johnson said. “We were like, ‘I don’t know if this is going to pass,’ and they were like, ‘Well, let’s just give it a shot.’”
Meanwhile, bigger insurers have more hoops to jump through and people to check with before they can make the decision to add new benefits.
“These community-based organizations … are often located at the county level, so we could be asking plans to contract with hundreds of these type of organizations state wide or [nationally],” Saunders said. “And it’s a lot of work to teach a community-based organization — whose business model has not been traditionally around working with health insurers — to learn how to contract with health insurers.”
Additionally, larger health plans and insurers have to consider scalability.
“It’s really hard at an organization with 1.2 million individual members across 370 bids to figure out who can afford to support the organization,” Callahan said of Aetna. “It’s hard to price it.”
While Aetna will “basically interview anyone” with a benefit idea, adoption and implementation are a different story, Callahan told summit attendees.
“If the local community-based organization disintegrates in a year, I have to be able to deliver to what those services are, so we have to have a plan B,” she said. “If our hearing aid vendor goes out of business, I can find a new hearing aid vendor. But companies like Papa, where they’re sending grandkids to help social isolation? I don’t have a plan B on the rental grandchildren.”