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Medicare Advantage Plans Offering Expanded Supplemental Benefits: A Look at Availability and Enrollment

Medicare Advantage Plans Offering Expanded Supplemental Benefits: A Look at Availability and Enrollment

Abstract

  • Issue: Since 2019, Medicare Advantage (MA) plans have had the flexibility to address enrollees’ unmet needs by targeting benefits to beneficiaries with chronic illnesses and offering a wider array of “primarily health-related” benefits. As of 2020, plans can also offer Special Supplemental Benefits for the Chronically Ill (SSBCI) — nonmedical services such as pest control.
  • Goals: To assess the availability of and enrollment in MA plans offering new types of supplemental benefits in 2019 and 2020.
  • Methods: Analysis of 2018–2020 Plan Benefit Package and MA enrollment data from the Centers for Medicare and Medicaid Services.
  • Key Findings: Adoption of SSBCI was relatively limited in the first year: only 6 percent of MA plans offered these benefits in 2020. However, plans offering additional, primarily health-related supplemental benefits increased substantially between 2018 and 2020, including meal provision (20% of plans to 46% of plans), transportation (19% to 35%), in-home support services (8% to 16%), and acupuncture (11% to 20%).
  • Conclusion: The relatively small percentage of plans offering SSBCI in 2020 may be due in part to operational and logistic challenges. But based on initial insight into 2021 plan benefit offerings, the trend toward more benefits that address social determinants of health will continue.

Introduction

Research shows that when medical care is delivered alongside nonmedical services that affect health, patients, caregivers, and the health care system overall are better off.1 Social services not traditionally considered medical services, such as transportation and nutrition, are particularly crucial for meeting the needs of high-need, high-cost Medicare beneficiaries; in addition to improving health outcomes, they may also lower costs.2

Medicare Advantage (MA) plans are seeing increasing numbers of enrollees who have social risk factors and complex medical needs.3 Recently, both Congress and the Centers for Medicare and Medicaid Services (CMS) have granted these plans new flexibilities in designing benefits, with the goal of improving outcomes and lowering costs, particularly for enrollees with chronic conditions (Exhibit 1). In 2017, CMS began allowing MA plans participating in the Value-Based Insurance Design (VBID) model — a Center for Medicare and Medicaid Innovation demonstration program — the ability to offer benefit designs tailored to specific diseases, such as reduced cost sharing and deductibles for certain specialist visits or prescription drugs. Then, in 2019, CMS extended to all MA plans the ability to offer disease-tailored benefit designs.

CMS also expanded the types of benefits that plans can offer. While MA plans have long been able to offer “primarily health-related” supplemental benefits not covered by fee-for-service Medicare, such as vision and dental coverage, these benefits until recently were narrowly defined by CMS to cover only medical services and had to be available to all plan enrollees. Starting in plan year 2019, CMS expanded primarily health-related to include nonmedical services. Under this new definition, plans can offer a wider array of supplemental benefits as long as these benefits are intended to “diagnose, prevent, or treat an illness or injury, compensate for physical impairments, act to ameliorate the functional/psychological impact of injuries or health conditions, or reduce avoidable emergency and health care utilization to all beneficiaries.”4 In practice, this interpretation allows plans to offer nonmedical benefits, such as broader use of transportation or meal delivery, in addition to the previously allowed medical benefits (Exhibit 2).5

Meanwhile, with the passage of the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act, plans, as of 2020, can offer Special Supplemental Benefits for the Chronically Ill (SSBCI). Plans may choose to offer these benefits to enrollees with certain chronic conditions, and the benefits do not have to be primarily health-related, as long as the item or service can reasonably improve or maintain health or function of the enrollee.6 As a result, insurers can now tailor both medical and nonmedical benefits to certain enrollees (Exhibit 3).

This issue brief provides an overview of MA supplemental benefit offerings from 2018 to 2020. We examine how MA plans have responded to increased flexibilities as well as the extent to which plans offer these new, nonmedical benefits alongside traditional medical benefit offerings. Notably, the 2020 data included in these analyses reflect pre-COVID-19 plan offerings and enrollment.

What Are Supplemental Benefits?

Medicare Advantage plans can offer additional benefits not covered by Medicare Parts A, B, or D, such as dental and vision coverage. These benefits, called supplemental benefits, include medical-related benefits, such as dental care, and nonmedical benefits, including those that address social and environmental factors, such as pest control.

Supplemental benefits may help plans improve health outcomes and address unmet patient needs. However, to offer these benefits, plans must decide the best way to allocate resources among different types of services, some of which may require significant investment and infrastructure. Plans can advertise which benefits they offer when they market their plans; this creates incentives for plans to offer supplemental benefits that appeal broadly to beneficiaries and not just to a smaller subset.

Both stand-alone MA plans and MA plans offering Part D drug coverage — known as MA-PDs — can offer supplemental benefits. Of these plans, our analysis includes only MA-PDs, which account for approximately 94 percent of all MA plans.* We also include (except where indicated) Special Needs Plans (SNPs), which are a type of MA-PD for beneficiaries with certain chronic conditions who are also eligible for Medicaid or who require an institutional level of care. Note that data only on the number of beneficiaries enrolled in plans offering the benefits are available, not data on the number using these benefits.

* Excluding Employer Group Waiver Plans, which are customized MA plans developed exclusively for employer and union groups.

Key Findings

A Majority of Medicare Advantage Plans Provide “Traditional” Supplemental Benefits

Nearly all plans provided traditional medical supplemental benefits such as vision, dental, hearing, and fitness services in 2020 (see Exhibit 3). In addition, a substantial and growing number of plans offer over-the-counter (OTC) benefits, which cover the purchases of certain nonprescription items such as first aid supplies and sunscreen. As shown in Exhibit 4, these benefits were common before CMS expanded its definition of primarily health-related benefits. Supplemental benefits such as dental, vision, and hearing have long been popular with plans and enrollees.

Access to Broader Supplemental Benefits Is Growing but Still Not Widespread

With its expanded definition of primarily health-related, CMS aimed to encourage plans to broaden their offerings and consider how they could use supplemental benefits to better address enrollees’ needs. As a result, the number of plans offering certain nonmedical benefits — including meals, transportation, in-home support services, and acupuncture — doubled between 2018 and 2020 (Exhibit 5).

Offerings of nonmedical benefits that cover other social support services, however, have expanded more gradually. For example, between 2018 and 2020, the percentage of plans offering home-based palliative care was relatively unchanged (0.09% to 2.00%), and only 1 percent of plans offered adult day care in 2020.

Notably, the share of plans offering support for caregivers of enrollees increased from 0 percent in 2018 to 14 percent in 2019, but then decreased to 2 percent in 2020. This reduction was associated with one large insurer that offered the service in 2019 but did not offer it in 2020. In this sense, the trend for caregiver support shown in Exhibit 4 is a bit of an anomaly relative to the other benefits.

While there was a large increase in plans offering telehealth as a primarily health-related benefit, much of this increase stemmed from a change in CMS’s reporting tool for 2020. As such, the increase shown for telehealth should be interpreted with caution. In addition, with the passage of the CHRONIC Care Act,7 plans could offer telehealth as part of the basic benefit package starting in 2020.

An initial analysis of MA plan benefit offerings in 2021 suggests that many of these trends are continuing. Plans are starting to expand their offerings of supplemental benefits permitted under the new definition while continuing to make benefits such as vision, dental, and hearing care more broadly available. Moreover, MA plans continue to increase offerings of other, non-primarily health-related benefits, such as meal services, which 57 percent of plans will offer in 2021, an increase from 46 percent in 2020.8

While MA plans have long offered more traditional, medical supplemental benefits, for some plans the newer, nonmedical benefits may require additional investments in planning and infrastructure. Increases in 2021 offerings suggest that plans are beginning to make these investments.

So Far, Relatively Few Plans Offer Special Supplemental Benefits for the Chronically Ill

Supplemental benefits may be particularly helpful for plans as they develop strategies to better manage the care of high-cost, high-need beneficiaries, including those with chronic diseases. Plans now have the flexibility to offer a combination of primarily health-related supplemental benefits and SSBCI to certain enrollees (for example, transportation to medical appointments as well as transportation to grocery stores). However, a relatively small number of plans offered SSBCI in the first year these services were permitted (Exhibit 6).

Because 2020 was the first year SSBCI were offered, beneficiaries may have had limited knowledge of them; as a result, enrollment in plans providing SSBCI was relatively low. While plans can notify enrollees of these benefits’ availability, marketing materials must note that they are not guaranteed to everyone, as only beneficiaries with certain chronic conditions can access them.

A slightly higher percentage of beneficiaries were enrolled in Special Needs Plans (SNPs) providing SSBCI. Therefore, compared to typical MA plans, a greater portion of beneficiaries in SNPs may have unmet needs that could be addressed through SSBCI. See the boxes below to learn more about SNPs’ meal and transportation supplement benefits.

A Deeper Dive: Meal-Related Benefits

In light of growing attention on seniors facing food insecurity or physical impairments that could impact food preparation, many MA plans now offer home-delivered meals as a supplemental benefit. Home-delivered meals may be particularly beneficial for enrollees in Special Needs Plans (SNPs), which by design provide coverage for enrollees with more complex needs, such as certain chronic conditions. Because of the prevalence of high-need, high-cost beneficiaries in SNPs, these plans may have been among the first to take advantage of the new flexibility to offer additional supplemental benefits.

Since 2019, beneficiary enrollment in MA plans offering prepared meals has grown, with nearly half of all Medicare beneficiaries enrolled in a plan that offers meals in 2020 (see table below). Notably, SNPs offer meals more frequently than non-SNPs in 2020, and SNP meal benefits are also more generous, both in terms of the duration and number of meals provided. However, meal provision in both SNPs and non-SNPs may be primarily intended for posthospitalization or otherwise targeted based on a health event. Additionally, most SNPs offering a meal benefit offer it for 30 days or fewer, suggesting that plans may not be addressing enrollees’ longer-term nutritional needs.

MEDICARE ADVANTAGE PLANS OFFERING MEALS BENEFIT, BY DURATION AND NUMBER OF MEALS, SNP VS. NON-SNP, 2020

Duration of benefit Percentage of non-SNPs offering benefit Percentage of SNPs offering benefit
≤7 days 43% 28%
>7 to ≤14 days 16% 31%
>14 to ≤30 days 38% 32%
>30 to ≤60 days 3% 8%
60+ days 0% 2%
Total MA-PDs offering benefit 1,443 529
Percent of MA-PDs offering benefit 46% 61%
Number of meals Percentage of non-SNPs offering benefit Percentage of SNPs offering benefit
≤20 meals 45% 31%
>20 to ≤40 meals 37% 30%
>40 to ≤60 meals 5% 12%
>60 to ≤80 meals 1% 2%
>80 to ≤100 meals 11% 21%
100+ meals 0% 3%
Total MA-PDs offering benefit 1,443 529
Percent of MA-PDs offering benefit 46% 61%

Note: SNP = Special Needs Plan.

At the same time, plans have started to offer other types of meal-related benefits to enrollees with chronic conditions through Special Supplemental Benefits for the Chronically Ill (SSBCI). For example, 6 percent of SNPs and 3 percent of non-SNPs provide enrollees with access to fresh food and produce, and 5 percent of SNPs and 1 percent of non-SNPs provide transportation for nonmedical needs, such as trips to a grocery store. While relatively few plans were offering these benefits in 2020, consistent with other SSBCI offerings, SNPs were slightly more likely to offer these benefits compared to non-SNPs.

While initial uptake of SSBCI has been slow, some plans may have prioritized other strategies for targeting services for beneficiaries with chronic conditions. These include differential benefit design or cost sharing, through the MA-VBID demonstration, or uniform benefit flexibility, which allows plans to target benefit design for all similarly situated enrollees (Exhibit 7). Notably, VBID status as a temporary demonstration could contribute to few plans participating in the model.

However, only 11 percent of MA plans are pursuing these approaches in 2020, and availability varies substantially by condition. This suggests that many beneficiaries with chronic conditions do not have access to either type of targeted benefit design to help them better manage their conditions.

In addition, of the plans that are offering targeted benefit designs either through VBID or uniform benefit flexibility, most targeted benefits for physical chronic conditions, such as chronic heart failure and diabetes, rather than mental health conditions, such as dementia. Tailored benefits are more often targeted toward illnesses where lifestyle modifications are widely recognized as having a direct impact on outcomes (such as diabetes and hypertension), rather than conditions such as cancer or end-stage renal disease, for which treatment is considered to have a greater impact on outcomes compared to lifestyle modifications.

A Deeper Dive: Transportation Benefits

Transportation is another commonly offered supplemental benefit in MA and may be of particular interest to SNPs where a large portion of enrollees are likely to have complex needs such as lack of reliable transportation. Overall, plan offerings of transportation as a primarily health-related supplemental benefit vary, though SNPs offer transportation more than twice as often as non-SNPs (see table below). However, the generosity of the benefit varies, with some plans requiring that all trips must be medically related, and others limiting the use of public transportation, vans, and ride sharing.

MEDICARE ADVANTAGE PLANS OFFERING TRANSPORTATION BENEFIT, BY TYPE, 2020

Type of transportation benefit Percentage of MA-PDs offering
supplemental benefit, 2020
  Non-SNP SNP
Transportation benefit 35% 85%
Plan-approved only 34% 84%
     Medical transportation PA 11% 19%
     Public transportation PA 4% 16%
     Van PA 30% 81%
     Taxi/ride-sharing PA 18% 48%
     Other PA 13% 23%
Any location <1% 1%
     Medical transportation (any) <1% 1%
     Public transportation (any) <1% <1%
     Van (any) <1% 1%
     Taxi/ride sharing (any) <1% <1%
     Other (any) <1% <1%

Notes: MA-PD = Medicare Advantage plans offering Part D drug coverage; SNP = Special Needs Plan; PA = plan-approved.

Implications

While the new flexibilities permitted to MA plans could be a promising tool for addressing unmet beneficiary needs and social risk factors, particularly for those with chronic illnesses, plan adoption appears to be varied. Some plans may use a combination of these to address beneficiaries’ needs. Other plans are continuing to focus most of their resources on providing traditional supplemental benefits. Overall, access to supplemental benefits has increased among MA beneficiaries, though it is unclear to what extent the range of flexibilities CMS offers is addressing unmet needs.

Numerous plans began providing new supplemental benefits under the expanded definition of primarily health-related in 2019 and 2020. In addition, preliminary analysis of data on MA plans’ primarily health-related supplemental benefit offerings for 2021 indicates that plans are continuing to increase supplemental benefit offerings, including benefits specific to COVID-19.

By contrast, as of 2020, only a limited number are targeting their benefit designs to better meet the needs of beneficiaries with certain chronic illness. However, while comparatively few plans offered SSBCI in 2020, initial analysis of 2021 SSBCI offerings indicate steady growth — 16 percent of nonemployer MA plans are offering SSBCI in 2021 vs. 6 percent in 2020.

Because these flexibilities are relatively new, additional assessments of plan offerings in later years could help determine whether relatively low SSBCI and other condition-specific benefit design offerings in 2020 and 2021 are lagging as plans invest in capabilities or if there are other barriers preventing plans from offering these benefits.

Preliminary research has explored why MA plans have not made these services more widely available.9 Some plans may not offer these additional benefits in the early years because of a lack of evidence on these benefits’ impact on health outcomes. In addition, as plans assess where to allocate resources, specifically plan rebates and premiums, they may be less likely to adopt benefits that require additional up-front investments, such as vendor identification and the development of infrastructure to support the service.10 As plans gain more experience and continue to invest in the infrastructure required to offer such benefits, it is possible that supplemental benefits may become more readily available to MA beneficiaries.11

However, some plans may be hesitant to offer benefits that attract high-need, high-cost beneficiaries if payment is inadequate. More work is needed to understand current obstacles and potential solutions to meet the comprehensive needs of high-need, high-cost beneficiaries who make up an increasingly high percentage of the MA population.12

Additionally, some of the new flexibilities could be important in addressing an increased need for certain services in light of the COVID-19 pandemic. For example, as financial hardships and social-distancing restrictions make it harder for some people to access food, transportation, pharmacies, and other important services, supplemental benefits could play a role in addressing these needs. In fact, a preliminary review of plan benefit offerings in 2021 found that one in three plans will begin offering supplemental benefits related to the pandemic, such as care packages or personal protection equipment.13

Looking ahead, it will be important to better understand the impact of COVID-19 on supplemental benefits in MA, as well as how these benefits can help drive positive health outcomes for members.

How We Conducted This Study

To establish a baseline of supplemental benefits offered in 2018, we analyzed the Centers for Medicare and Medicaid Service’s CY 2018 Plan Benefit Package (PBP) data that describes all MA plan offerings, including supplemental benefits. Then, to determine the impact of the expansion of the definition of “primarily health-related” in the CY 2019 Call Letter, we analyzed CY 2019 and CY 2020 PBP data and compared them to the 2018 offerings. In 2020 data, we assessed plan offerings of SSBCI. Plans were identified based on a combination of contract-plan-segment ID, and we excluded from analysis MA plans with no drug coverage, Employer Group Waiver Plans, Cost, PACE, and Demo plans. The analysis includes the 50 states, the District of Columbia, and the territories.

We also analyzed 2018–2020 enrollment in plans offering these benefits using CMS enrollment files. For the 2018 and 2019 analyses, we used enrollment as of September for each year; for the 2020 analyses, we used enrollment as of February 2020. To assess beneficiary access in each county to plans offering supplemental benefits, we used the landscape files released by CMS from 2018, 2019, and 2020.

Finally, to provide insights into the potential impact of the new benefits flexibility for chronically ill enrollees, we analyzed 2018 and 2019 participation and benefit trends under the MA-VBID model using PBP data. We then examined benefits under the MA-VBID pilot to demonstrate how early adopters have chosen to tailor benefits for specified chronically ill subpopulations. The MA-VBID model provides data on the types of benefit design plans engaged in innovative design are currently using to improve patient outcomes and reduce cost.

NOTES

1. Melinda K. Abrams and Donald Moulds, “Integrating Medical and Social Services: A Pressing Priority for Health Systems and Payers,” Health Affairs Blog, July 5, 2016.

2. Eva DuGoff et al., Targeting High-Need Beneficiaries in Medicare Advantage: Opportunities to Address Medical and Social Needs (Commonwealth Fund, Feb. 2019); Susan Hayes et al., High-Need, High-Cost Patients: Who Are They and How Do They Use Health Care? A Population-Based Comparison of Demographics, Health Care Use, and Expenditures (Commonwealth Fund, Aug. 2016); Peter Long et al., eds., Effective Care for High-Need Patients: Opportunities for Improving Outcomes, Value, and Health (National Academy of Medicine, 2017); and Amy J. H. Kind et al., “Neighborhood Socioeconomic Disadvantage and 30-Day Rehospitalization: A Retrospective Cohort Study,” Annals of Internal Medicine 161, no. 11 (Dec. 2, 2014): 765–74.

3. Christie Teigland et al., As It Grows, Medicare Advantage Is Enrolling More Low-Income and Medically Complex Beneficiaries (Commonwealth Fund, May 2020).

4. “Announcement of Calendar Year (CY) 2019 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies and Final Call Letter,” Code of Federal Regulations, 2018.

5. Kathryn A. Coleman, “Reinterpretation of the Uniformity Requirement” (memo), Medicare Drug and Health Plan Contract Administration Group, April 27, 2018.

6. Note that the CHRONIC Care Act was incorporated into the Bipartisan Budget Act of 2018 (Pub. L. 115-123; 2018).

7. The CHRONIC Care Act was incorporated into the Bipartisan Budget Act of 2018 (Pub. L. 115-123; 2018).

8. Joanna Young, Shruthi Donthi, and Thomas Kornfield, “MA Enrollees Can Access COVID-19 Supplemental Benefits in 2021,” Avalere Health, Oct. 19, 2020.

9. David J. Meyers et al., “Medicare Plans’ Adoption of Special Supplemental Benefits for the Chronically Ill for Enrollees with Social Needs,” JAMA Network Open 3, no. 5 (May 2020): e204690.

10. Meyers et al., “Medicare Plans’ Adoption,” 2020.

11. ATI Advisory, A Turning Point in Medicare Policy: Guiding Principles for New Flexibility Under Special Supplemental Benefits For The Chronically Ill (ATI Advisory, 2018).

12. Teigland et al., As It Grows, 2020.

13. Young, Donthi, and Kornfield, “MA Enrollees,” 2020.

Publication Details

Date

Contact

Thomas Kornfield, Senior Consultant

Citation

Thomas Kornfield et al., Medicare Advantage Plans Offering Expanded Supplemental Benefits: A Look at Availability and Enrollment (Commonwealth Fund, Feb. 2021). https://doi.org/10.26099/345k-kc32