Supplemental benefits have been a valuable differentiator for Medicare Advantage (MA) plans since the Centers for Medicare and Medicaid Services (CMS) expanded the scope of coverage to certain non-medical supplemental benefits in 2018. Since then, we have seen continued expansion in supplemental benefit adoption and prevalence, which has required MA organizations (MAOs) to become even more creative in plan design to stay competitive.
So, how can you capture and maintain a competitive position in your market? Insights found by a Pareto Intelligence analysis after the MA Annual Enrollment Period (AEP) tell an important story that can influence product pricing and benefit design strategies for 2021. In a recent webinar, Gorman Health Group (GHG) President Jeff Fox and Vice President of Sales and Marketing Diane Hollie shared the critical trends in supplemental benefits from the AEP results data that health plans need to know going into 2021 bids. Below is a summary of the key takeaways.
If you did not get a chance to attend the webinar, click here to view the recording.
Trend #1: Supplemental Benefits are Becoming Table Stakes
With the number of $0 HMOs, PPOs, and even HMO-POS plans available in the market—and with many supplemental benefits becoming homogenous across plans—consumers have new expectations about the “standard” offering when sitting at the kitchen table with a Broker.
This is apparent when comparing overall supplemental benefit prevalence between 2019 and 2020. In 2020, only 17% of MA Plans (in the Individual market, including SNP plans) did not offer any supplemental benefits versus 27% in 2019.
Trend #2: The Nationals are Offering Supplemental Benefits at a Higher Rate than Other Plan Types
When reviewing the enrollment data by type of MA plan (e.g., National Plans, Blues Plans, Provider-Sponsored Plans, Regional Plans), it was apparent, in most cases, that the Nationals offered major supplemental benefits, such as the over-the-counter (OTC) and meal benefits, more than other plan types.
One interesting benefit to note is “Transportation Services.” Regional plans, start-ups, and smaller MA plans in the “other” category were on par with the Nationals as far as providing the benefit. This could be attributed to D-SNP plans in this category, but it is certainly a trend to watch going forward.
Trend #3: Supplemental Benefits Can Impact your Member Experience
Given the increase in supplemental benefits offered, health plans should focus even more on member experience. As an example, in the recent Medicare Shopping and Switching Study from Deft Research, inadequate dental coverage was the most prevalent coverage issue mentioned by MA members, followed distantly by poor vision coverage. Therefore, if a plan doesn’t have sufficient dental coverage, member satisfaction may suffer as a result.
But simply offering the benefit is generally not enough to satisfy consumers. When a plan offers supplemental benefits, especially comprehensive dental benefits, communication is critical to managing members’ expectations. This includes:
- Properly explaining the details of the benefit to ensure that the Medicare consumer doesn’t select the plan with a different understanding of the offering and end up disappointed the first time they attempt to use the benefit.
- Outlining how to access the benefit once becoming a member or receive the benefit once it becomes available. Typically, supplemental benefits are implemented by outside vendors, which may require members to understand how to use up 6, 7, 8+ different companies to access benefits. This may cause confusion and poor member experience if member education and infrastructure are not properly aligned.
Trend #4 The Availability of Supplemental Benefits Correlates to Higher Enrollment Growth Rates
With data now available from multiple years of plans offering expanded supplemental benefits, we wondered: Does the availability of supplemental benefits impact enrollment? Preliminary results say yes.
For example, plans that offered comprehensive dental, transportation services, and/or meal benefits grew an average of 5% from 2019 to 2020, versus only 2-3% growth for plans that did not offer these benefits. The same goes for the OTC benefit… Plans that offered an OTC benefit grew 7% on average and plans that did not offer OTC actually decreased enrollment by 2%.
In diving further into OTC, Pareto’s analysis shows that the annualized benefit amount correlates to the amount of enrollment growth for a plan. MA plans with over $300 in annual OTC benefit grew 11%, whereas plans with an annual OTC benefit of up to $200 grew only 3% on average. This demonstrates that certain benefits are more influential for plan choice than others, which can help determine where to place the supplemental benefit dollars.
Watch the Webinar On Demand!
All of these trends are discussed in much deeper detail in GHG’s March 4th webinar titled, “Supplemental Benefits Trends to Address in 2021.” Use the form below to receive access to a recording of the webinar and explore the various data points discussed in this article.
Where Do We Go from Here?
In five years, MA plans will look very different than they do now. The new mindset of the baby boomer who is aging into Medicare will force change; they expect more from a plan and will demand it. Plans will need to improve member experience and address the social determinants of health (SDOH) specific to their population with various supplemental benefits.
This is also the time to reimagine the benefit/plan development process. Waiting to see what other plans are offering and following the leader is no longer sufficient in the long term. Plans must understand what members want/need and how to offer it effectively. There is also an opportunity to introduce benefits into the market that will help lower costs, increase Star ratings, and retain members over time, but this means effective change using strong data analysis with a clinical and quality lens in product and benefit strategy today.
For help with plan development, product strategy and benefit design, and more, get in touch with GHG’s Sales & Marketing team.