Milliman Actuary: COVID-19 Adding Fuel to Medicare Advantage’s Home Care Fire

The coronavirus could be the match that finally sparks the Medicare Advantage (MA) boom for home care.

The explosion has been a long time coming. It all started when the Centers for Medicare & Medicaid Services (CMS) first expanded the scope of MA supplemental benefits in April 2018.

The move opened the door for MA plans to cover in-home care for the first time, creating new, highly sought after opportunities for home-based care providers. However, those opportunities were few and far between, with only 3% of plans offering in-home support services in 2019.


Adoption rates improved slightly but significantly for 2020, thanks in part to CMS yet again widening the scope of which supplemental benefits MA plans could offer. In 2020, 148 plans decided to cover in-home support services, compared to only 51 the year before, according to international actuarial consulting firm Milliman.

But that increase could be nothing compared to what the MA industry will see as a result of COVID-19.

Thanks to mid-year MA flexibilities from CMS and the country’s current aversion to congregate senior care settings, the virus is poised to throw even more fuel on the MA home care fire, according to Catherine Murphy-Barron, a principal and consulting actuary at Milliman.


Murphy-Barron recently connected with Home Health Care News to share her outlook on the MA landscape amid the coronavirus, as well as what she expects to see from plans and CMS on the home care front in the year ahead.

You can find the conversation below, edited for length and clarity.

HHCN: What big-picture changes are you seeing in MA amid the coronavirus?

Murphy-Barron: It’s hard to even know yet what 2020 is looking like, except that it’s all quite in upheaval.

When the coronavirus was just starting out in March and April, we were trying to put together bids for 2021 — so it was sort of shooting in the dark because we were still trying to understand what’s happening in 2020.

Obviously, consistent with every line of business, Medicare is experiencing huge drops in discretionary services. At the same time, the Medicare population is the age bracket that is really most at risk related to COVID.

So how are those factors offsetting each other — and how do you deal with the implementation of telemedicine and all of that?

It’s still playing out. Telemedicine obviously has a huge impact on Medicare. The ability to use that and the expansion of that benefit this year has been large. Hopefully that will continue into the future.

For the dual plans, particularly the special needs plans (SNPs) and the institutional special needs plans (I-SNPs), they’ve taken a huge hit. I have a number of provider-owned Medicare Advantage clients, so they tend to be smaller and they tend to be dual.

They tend to have gotten hit quite hard with regard to if they have beneficiaries who are in skilled nursing. They’ve seen a huge hit with regard to their enrollment — obviously they’ve lost quite a few of their members and some of their staff.

The impact is quite different depending on who you are, what kind of a plan you are and where you are in the country. Trying to figure out what that will mean for 2021 has been quite difficult.

So what are you expecting for 2021?

That depends on the client and what they think.

What we’re trying to do is figure out: What do we know? What would it look like if it was a normal year? And how do we adjust that based on how we think this will play out?

Part of what is helping is some of the expansions CMS has made in the past few years with regard to supplemental benefits [like in-home care].

People aren’t able to go into a nursing facility or don’t want to stay in a hospital long term. So [plans] can now provide some of the home care and in-home support services that previously were quite limited unless you were a dual special needs plan.

As we think about going into 2021 … people will probably still be somewhat uncomfortable with group settings like adult day care or skilled nursing facilities. You might see the use of these [in-home] benefits as a way to supplement some of the care and get people the care they need without having to put them at risk from a COVID perspective.

This was going to happen anyway. Supplemental benefit flexibility was a huge plus for MA from a social determinant of health perspective. I think COVID is reinforcing some of the steps that CMS was already taking.

Initially, MA plans were slow to adopt in-home supplemental benefits. Do you think COVID-19 will add fuel to that fire?

I think it will, especially on the dual side of things.

It gives options to beneficiaries. The people who have been caring for them at home because they’ve been working from home will eventually have to go back to work. How do you balance the fact that you need additional care? You don’t particularly want to have in-patient or facility-based [care right now].

Having those options gives people more choice.

CMS recently gave MA plans new mid-year flexibilities in light of the coronavirus, so plans hypothetically could be adding new in-home care benefits right now. Do you have any idea how many are doing that?

We don’t yet. It’ll be a couple months.

But generally, if you look at what was happening for 2020 with last year’s bids, plans definitely were taking advantage on the home care front, and I don’t think that will change for 2021.

We’ve seen CMS announce new in-home supplemental benefit allowances the past two years in a row. Do you think we’ll see any further expansion of those allowances this year?

They gave plans a lot of choice with regard to what they could do under those benefit expansions. So I think what we’re gonna see is that plans will experiment over the coming years.

I haven’t heard that CMS is planning to add more or change anything, but they definitely are expecting to see plans take advantage of this. I think the number of plans offering these in-home flexibilities will only continue to grow as plans get more comfortable with what they can do and how they can use them.

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