Overview
In an increasingly competitive Medicare Advantage (MA) marketplace,1 supplemental benefits are one of the primary ways Medicare Advantage organizations (MAOs) can differentiate their plans from competitors’ plans. A supplemental benefit is an additional benefit MAOs cover for their beneficiaries, but which is not covered under traditional fee-for-service (FFS) Medicare. MAOs offer these benefits to attract Medicare-eligible individuals to their plans. Supplemental benefit coverage can either be mandatory, meaning all enrollees in a particular plan receive coverage, or optional, meaning all enrollees in a particular plan can elect to receive coverage for an additional premium.2 Due to recent Centers for Medicare And Medicaid Services (CMS) demonstration programs and expansions in supplemental benefit flexibilities,3,4,5 MAOs may also limit mandatory supplemental benefits to plan enrollees who meet certain conditions, such as having a diabetes diagnosis. These types of benefits are only offered to a specific subset of a plan’s population, and therefore are not part of this analysis. This analysis focuses on mandatory supplemental benefits offered by Dual Eligible Special Needs Plans (D-SNPs) from 2018 to 2022. Additional benefits offered under Medicaid are not considered in this article.
Supplemental benefits are particularly important for D-SNPs for a few key reasons:
- Cost sharing for dual-eligible individuals is generally covered by Medicaid, so lowering traditional Medicare-covered cost sharing does not have an impact on a dual-eligible individual’s out-of-pocket cost. Therefore, D-SNPs typically do not enhance Medicare-covered benefits.
- D-SNPs typically target a $0 premium after government premium subsidies, and there is minimal competition on premium for dual-eligible members.
Because D-SNPs cannot attract beneficiaries by enhancing Medicare-covered benefits or reducing beneficiary premium, supplemental benefits are the key distinguishing plan design factor in the D-SNP market.
Analysis
We utilized publicly available data from CMS for this analysis. The 2018 through 2021 membership is based on February plan enrollment, and the 2022 membership is based on January 2022 enrollment.6 Benefit data for all years was summarized from the plan benefit packages (PBPs) published by CMS for each year.7
Vision, hearing, and dental benefits are among the most common supplemental benefits historically offered by MA plans. Figure 1 shows the percentage of beneficiaries in D-SNPs from 2018 to 2022 with coverage for these benefits.
Figure 1: Percentage of beneficiaries with benefit coverage of the most common supplemental benefits, 2018-2022
MAOs offered these benefits to a very high percentage of D-SNP beneficiaries from 2018 to 2022 with modest increases in coverage over the five years. With the exception of hearing exams, which are available to nearly 90% of beneficiaries, the remainder of these benefits have over 90% prevalence in the 2022 marketplace for D-SNP plans.
Supplemental benefit prevalence varies significantly between national and regional MAOs. National players are defined as those that have more than 250,000 beneficiaries in total (including all enrollment types),8 and regional players are the remainder. There was a decrease in 2019, a large increase in 2020, and slight growth from 2020 to 2022 of preventive dental offerings driven by the national players, which now have 94% prevalence for preventive dental benefits in the D-SNP market in 2022. Regional players, on the other hand, saw a marked decrease in beneficiaries covered by this benefit in 2021 and slight growth from 2021 to 2022, with only 76% of beneficiaries covered by this benefit in 2022. The reduced prevalence of preventive dental coverage is a divergence from all other common supplemental benefits for regional players, which continued to see increased penetration from 2019 to 2022, though still less penetration than the national players. The notable difference in benefit coverage between national and regional players in 2022 is evident in Figure 2.
Figure 2: Percentage of beneficiaries with benefit coverage in 2022, by regional and national carriers
MAOs can offer numerous additional supplemental benefits beyond vision, hearing, and dental. Figure 3 shows the percentage of beneficiaries in D-SNPs from 2018 to 2022 with coverage for other common supplemental benefits, including over the counter (OTC) drug cards, transportation, podiatry services, meals, and acupuncture.
Figure 3: Percentage of beneficiaries with benefit coverage of various other supplemental benefits
An OTC drug card is the most highly offered benefit of the group from 2018 to 2022, with 97% penetration in 2022. Acupuncture coverage increased to 53% penetration in 2022. Meal benefit coverage grew nearly 50% from 2018 to 2022. While most of these gains happened between 2018 and 2019, there is now 81% penetration of this benefit in 2022. Podiatry and transportation both grew by about 12% from 2018 to 2022, with 76% and 90% penetration in 2022, respectively.
Multiple supplemental benefits fall under the 14c “Other Defined Supplemental Benefit" category in the PBP. Figure 4 shows the percentage of beneficiaries in D-SNPs from 2018 to 2022 with coverage for some of the most prevalent 14c benefits: health education, fitness, remote access technologies (RAT) – nursing hotline, nutritional/dietary benefit, and smoking cessation.
Figure 4: Percentage of beneficiaries with benefit coverage of various PBP 14C benefits
Coverage of remote access technologies – nursing hotline and health education decreased from 2018 to 2022, but all other benefits increased in the percentage of beneficiaries covered over this period.
The definition of “primarily health- related benefits”9 was expanded starting in the 2019 bid cycle to cover services used to:
- Diagnose
- Compensate for physical impairments
- Ameliorate the functional/psychological impact of injuries or health conditions
- Reduce avoidable emergency and healthcare utilization
This includes adult day care, home-based palliative care, in-home support services, support for caregivers, and therapeutic massage (for pain management). The percentages of beneficiaries in D-SNPs with coverage for these expanded primarily health-related benefits in 2021 and 2022 are displayed in Figure 5.
Figure 5: Percentage of beneficiaries with expanded primarily health-related benefit coverage, comparison of 2021 to 2022
While D-SNPs could provide a subset of these types of benefits prior to the expansion of primarily health-related supplemental benefits, D-SNP MAOs provide these services to a relatively low percentage of beneficiaries compared to the other supplemental benefits discussed above. But the percentage is Benefit prevalence is higher for D-SNPs than general enrollment plans for adult day care, in-home support services, and therapeutic massage. From 2021 to 2022, adult day care coverage decreased from 5% to 1%, while in-home support services coverage increased from 15% to 20%.
Methodology
In performing this analysis, we relied on the 2022 Milliman MACVAT®. The Milliman MACVAT contains MA plan details and benefit offerings for 2018 through 2022. The Milliman MACVAT uses publicly available data released by CMS, which is then compiled, sorted, and summarized into a user-friendly format. We used the February membership from each applicable year (2018 through 2021), with the exception of 2022, for which we used the January 2022 enrollment. This analysis includes dual-eligible MA plans only.
Caveats and Limitations
Julia M. Friedman and Mary G. Yeh are consulting actuaries for Milliman, members of the American Academy of Actuaries, and meet the qualification standards of the Academy to render the actuarial opinion contained herein. To the best of our knowledge and belief, this information is complete and accurate and has been prepared in accordance with generally recognized and accepted actuarial principles and practices.
The material in this report represents the opinion of the authors and is not representative of the view of Milliman. As such, Milliman is not advocating for, or endorsing, any specific views contained in this report related to the Medicare Advantage program.
This report is intended to summarize supplemental benefits offered by MA plans from 2018 through 2022. This information may not be appropriate, and should not be used, for other purposes. We do not intend this information to benefit, and assume no duty of liability to, any third party that receives this work product. Any third-party recipient of this report that desires professional guidance should not rely upon Milliman’s work product, but should engage qualified professionals for advice appropriate to its specific needs.
The credibility of certain comparisons provided in this report may be limited, particularly where the number of plans in certain groupings is low. Some metrics may also be distorted by benefit changes in a few plans with particularly high enrollment.
In preparing our analysis, we relied upon public information from CMS, which we accepted without audit. However, we did review it for general reasonableness. If this information is inaccurate or incomplete, conclusions drawn from it may change.
1Friedman, J.M., Swanson, B.L., Yeh, M.G., & Cates, J. (February 2020). State of the 2020 Medicare Advantage Industry: As Strong as Ever. Milliman Research Report. Retrieved March 25, 2022, from https://us.milliman.com/en/insight/state-of-the-2020--medicare-advantage-industry-as-strong-as-ever.
2CMS (April 22, 2016). Medicare Managed Care Manual: Chapter 4: Benefits and Beneficiary Protections. Retrieved March 25, 2022, from https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/mc86c04.pdf.
3CMS. Medicare Advantage Value-Based Insurance Design Model. Retrieved March 25, 2022, from https://innovation.cms.gov/innovation-models/vbid.
4CMS (April 27, 2018). HPMS Memo. Retrieved March 25, 2022, from https://www.cms.gov/Research-Statistics-Data-and-Systems/Computer-Data-and-Systems/HPMS/HPMS-Memos-Archive-Weekly-Items/SysHPMS-Memo-2018-Week4-Apr-23-27.
5CMS (April 24, 2019). Implementing Supplemental Benefits for Chronically Ill Enrollees. Retrieved March 25, 2022, from https://www.cms.gov/Medicare/Health-Plans/HealthPlansGenInfo/Downloads/Supplemental_Benefits_Chronically_Ill_HPMS_042419.pdf.
6CMS. Monthly Enrollment by Contract/Plan/State/County. Retrieved March 25, 2022, from https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MCRAdvPartDEnrolData/Monthly-Enrollment-by-Contract-Plan-State-County.
7CMS. Benefits Data. Retrieved March 25, 2022, from https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MCRAdvPartDEnrolData/Benefits-Data.
8Anthem, CIGNA, Centene Corporation, CVS Health Corporation, Humana, Kaiser Foundation Health Plan, and UnitedHealth Group are national players for this analysis due to their total enrollment counts.
9CMS (April 2, 2018). Announcement of Calendar Year (CY) 2019 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies and Final Call Letter. Retrieved March 25, 2022, from https://www.cms.gov/MEDICARE/HEALTH-PLANS/MEDICAREADVTGSPECRATESTATS/DOWNLOADS/ ANNOUNCEMENT2019.PDF.