Medicare Advantage on the Rise

Medicare Advantage on the Rise

Continued growth, strong performance and new guidelines are good news for plans and their members

Already the choice of more than one-third of the 59 million people with Medicare, the Medicare Advantage (MA) program is growing and changing in ways that will help even more seniors maintain good health and independence as they age.

Strength in Numbers

The number of eligible seniors opting for MA plans over fee-for-service Medicare has grown year after year — and shows no signs of slowing down. Medicare managed care plans now provide coverage to more than 21 million people with another 2 million expected to join in 2019. If that happens, MA plan members will represent 39 percent of the total Medicare population.

Among the largest MA plans in California, SCAN has witnessed this trend first-hand, increasing market share and experiencing significant growth in Los Angeles, Orange and Sonoma counties during the 2018 annual enrollment period.

Bigger and Better, Too

MA plans improve the health of seniors in ways that other coverage options haven’t, and this is fueling increased enrollment. With a focus on preventive services, care coordination, access and continuous improvement, MA plans continue to outperform fee-for-service Medicare in key quality measures. A recent study by Avalere Health shows Medicare Advantage beneficiaries had 23 percent fewer inpatient room visits and better health outcomes overall than individuals enrolled in FFS Medicare at similar costs to regular Medicare. People with chronic conditions, such as diabetes, in particular benefit from the extra benefits and programs available through Medicare managed care, experiencing better health outcomes and fewer complications, including serious complications, from their conditions.

Findings like these are important for several reasons. For one, they confirm that what providers of MA plans like SCAN and others like us are doing is making a meaningful difference in the lives of members, particularly those who need help the most. They also underscore plan’s commitment to providing high quality benefits and services that meet members’ individual needs related to health and independence.

Knowing that MA plan members have better experiences can also be useful to our broker partners, because when you present an MA plan to your clients, you can be confident you are offering them coverage they can rely on for high-quality care, improved access and better health. When it comes to MA, quality begets even greater quality. Since Medicare pays a bonus to plans demonstrating the highest quality, well-performing plans can reinvest these bonuses, continuously improving benefits, access and quality of care for the member.

SCAN’s 4.5 star rating for 2018 from the Centers for Medicare & Medicaid Services is not only a reflection of our efforts to improve quality and services, but an investment that pays off in a meaningful way for us, our provider partners, and our members.

New Laws, New Opportunities

A’s success in providing high-quality, value-driven and cost-effective care has not been lost on lawmakers. At the federal level, MA plans have earned bipartisan support, with more than 360 members of Congress pledging to preserve the program. They showed their support in an even more tangible way earlier this year with legislation that will make it possible for plans to further improve services and health outcomes: Special Needs Plans, which until now were temporary demonstration projects, can now be offered by MA plans on a permanent basis. This change will allow more of the nation’s frailest seniors to benefit from programs that help them age successfully at home for as long as possible.

Health plans that already offer SNPs can begin to think in the long term, while other plans that were put off by the uncertainty of past SNP rules will likely begin exploring these options. The result: More seniors with chronic illnesses and other special needs will have access to programs and services
designed to support them.

The definition of “primarily health related” supplemental benefits has been expanded to allow MA plans to offer food, counseling and other nonmedical services as long as they can help prevent, cure or reduce illness or injury. TeleHealth made headlines when the Bipartisan Budget Act was signed into law in February. The legislation allows MA plans to include delivery of telehealth services in a plan’s basic benefits. This can enable a member to access mental health services from the privacy of their own home, or provide a convenient way to ensure post-hospitalization follow-up care is received.

While plans in the past have been required to offer the same benefits to all their enrollees, new regulations also allow MA plans to tailor benefits to groups within their membership with specific health conditions. For example, a plan could offer all members diagnosed with diabetes additional coverage for podiatry services, offering another way to better tailor plan coverage to member need. Many MA plans have likely incorporated the new benefit flexibility into 2019 plan bids for approval by Medicare.

While 2019 benefits have not been released as of press time, I’m confident that many in our industry are thinking of new and creative ways to provide the most value for members under the new guidelines.

A Strong Choice for Seniors

These “new developments” align with SCAN’s history as a social HMO and our decades of experience caring for the frailest seniors. As a long-time advocate for changes that would allow greater flexibility in meeting seniors’ individual needs, we are excited to be looking at ways to once again provide benefits that can more directly help each member age safely in the setting of their choice.

When evaluating which MA plan is right for each client, think about both the nature of the benefits and the stability of the plan. While it’s exciting to offer “more” and “different” benefits, it’s also imperative that the plan will be there for the long-term. Make sure the plan under consideration is adding benefits and services at prices that are sustainable year over year. While more customized coverage options will only add to MA’s appeal, plan members— your clients—depend on stability of cost and coverage.

The plan should work as hard to retain existing clients as it does to gain new ones. The bottom line is this: 2018 has been a good year for seniors! The many benefits that already come with membership in a Medicare Advantage plan will inevitably get even better.

For answers to your pressing questions call Jim Robeson, the Medicare Answer Guy @ (858) 935-9120. Visit website


The New Medicare and You

The New Medicare and You



“It ain’t your father’s or grandfather’s Medicare.” After 48 years Medicare is changing its health care focus from treatment of acute diseases to caring for Medicare beneficiaries with chronic diseases. Why?Simple! Eighty-six percent of the nation’s $2.7 trillion annual health care expenditures are for people with chronic and mental health conditions. About 65 percent of Medicare beneficiaries have two or more chronic diseases, and 43 percent have three or more. Reducing chronic expenses is the fastest way to bring the exploding Medicare costs under control.


Chronic diseases are often caused by unhealthy behaviors that increase the risk of disease—poor nutrition, inadequate physical activity, overuse of alcohol or smoking. Social, emotional, environmental and genetic factors also play a role. As people age, they are more likely to develop one or more chronic disease.

How ill is America’s health? The picture isn’t pretty:
• During 2011–2014, more than one-third of adults (36 percent), were obese.
• 36.5 million adults in the United States (15.1 percent) said they currently smoked cigarettes in 2015.
Cigarette smoking accounts for more than 480,000 deaths each year.
• 90 percent of Americans aged two years or older consume too much sodium, which can increase their risk of high blood pressure. Of course, obesity, smoking-related disease and high blood pressure are key chronic diseases. Chronic diseases are painful diseases; example quotes of chronic patients taken from an online site:
• “Sitting down in the shower to shave because it’s easier on my joints. I sometimes forget that many
people stand to shave.”
• “I have a habit of collecting my hospital bracelets after I get out of the hospital as it reminds me that I won yet another battle. It seems odd, but for some reason, I hold onto the bracelet feeling empowered that I walked away from what tried to defeat me again.”


You better get to know how to present C-SNP plans as ‘chronic’ is the new buzzword with Medicare. The Center for Medicare and Medicaid Services (CMS) has opened the door for health plans to add Value-Based Insurance Design (VBID) benefits such as air conditioners for asthma patients, home health benefits, healthy groceries, home-delivered meals and installing safety items like grab bars.

As an example of a health plan’s preparation for the expansion of VBID, Humana recently purchased Kindred Healthcare. Kindred Healthcare owns an array of businesses including home health, hospice, long term care hospitals and inpatient rehabilitation facilities. Humana has a significant business administering Medicare health benefits for the elderly, and the Kindred deal helps Humana form closer ties with a provider of home care and related services predominantly used by the elderly.

Starting in 2019, health plans in California and other targeted states can expand their benefits to include more Medicare beneficiaries with chronic conditions than previously identified by CMS, such as diabetes, congestive heart failure, chronic obstructive pulmonary disease (COPD), past stroke, hypertension, coronary artery disease, mood disorders, and combinations of these categories. The new chronic list will include beneficiaries with lower back pain, chronic kidney disease, obesity/pre-diabetes, asthma, and tobacco use. Beginning in 2018, CMS also allowed benefits for enrollees with dementia and rheumatoid arthritis. Medicare Advantage plans can cover adult day care services, and in-home help with activities such as dressing, bathing and managing medications. Seema Verma, the administrator CMS, told insurance company executives at a recent conference that “CMS hopes its new ‘reinterpretation’ of the Medicare Advantage program benefits rules will help unleash private-sector innovation and creativity.”

CMS further states, “Plans adding benefits based on the supplemental benefits interpretation must make sure the benefits are ‘primarily health related,’ and not primarily for a patient’s comfort. The services covered must be recommended by a physician or other licensed medical professional as part of a care plan.

The new benefits must not include items or services used to induce enrollment. “The primary contributor to the shift in focus to chronic diseases is Congress passing “The Chronic Care Act of 2018,” February 9, 2018, which opened the doors to the inevitable expansion of C-SNP or “Look-Alike” C-SNP Medicare Advantage Plans that provide VBID benefits. Two of the main sections of the bill that impacts health plans and the brokers that sell them are:

1. Allows MA plans to offer an expanded set of supplemental benefits to the chronically ill enrollee. Enables MA plans to experiment with different types of benefit packages to meet the needs of chronically
ill beneficiaries.
2. Permanently authorizes three types of SNPs: D-SNP (dual eligibles), C-SNP (those with severe disabling chronic conditions), and I-SNP (those in institutions). C-SNPs must meet additional care management requirements starting in 2020. By 2022, and every five years after that, the Health and Human Services (HHS) Secretary must update the list of chronic conditions eligible for participation. The list must include HIV/AIDS, end-stage renal disease and chronic/disabling mental illness.


The Centers for Disease Control and Prevention (CDC) established a comprehensive chronic disease program.The four major components are:

1. Implemented systems that track chronic diseases and their risk factors.
2. Promotes health and support healthy behaviors across the nation, in states and communities, and in settings such as schools, child care programs, work sites and businesses.
3. Developed programs and policies that allow doctors to diagnose chronic diseases earlier and manage them better.
4. Established community programs linked to clinical services to help patients prevent and manage their chronic diseases, with guidance from their doctor. The State of California Chronic Programs,, includes services for health self-management, fall prevention and physical activity, and caregiver and memory programs. The VBID benefits cannot cure chronic diseases but can aid in reducing the hospitalizations due to chronic illnesses. CDC recommends six healthy aging suggestions (as seen by the graph on this page).


The New Medicare and You has a chronic condition focus. You can count on the majority of your Medicare
clients having one or more chronic diseases and they would probably like to to hear about the VBID benefits
of a C-SNP or an MA plan with VBID benefits. Already, there are MA and C-SNP health plans with added benefits, such as:

• Health Coach
• Care Management
• Acupuncture
• Telehealth
• Chiropractic
• OTC Supplies
• International
• Lower Cost Travel Tiered Copays
• Gym Membership
• Transportation
• Quit Smoking Programs
• Nutritional Programs

The emphasis on chronic and CSNP plans also creates a yearlong enrollment opportunity for brokers. Eligible Medicare beneficiaries can enroll anytime during the year into a C-SNP plan with their PCP’s confirmation of their chronic illness. ‘Lockin’–where you can only enroll new to Medicare beneficiaries – is becoming antiquated given C-SNPs. With the new OEP now January 1 to March 31 and AEP October 15 to December 7 and C-SNP’s and New-to-Medicare, enrollments are now a full-time enrollment opportunity. Oh, not forgetting D-SNPs for Dual Eligibles and I-SNPs for Institutional members, brokers have unlimited enrollment opportunities.


The ‘New Medicare and You’ is BetaBenefits’ title for our Medicare educational classes in which we discuss Medicare’s milestones (see chart) and the benefits each milestone provides Medicare beneficiaries. With CMS’ emphasis on chronic diseases and VBID benefits, shouldn’t you rethink how you present Medicare to your clients?

For answers to your pressing questions call Jim Robeson, the Medicare Answer Guy @ (858) 935-9120. Visit website

How Common Procedures Became 20 Percent Cheaper for Many Californians

How Common Procedures Became 20 Percent Cheaper for Many Californians

At a time when health care spending seems only to go up, an initiative in California has slashed the prices of many common procedures.

The California Public Employees’ Retirement System (Calpers) started paying hospitals differently for 450,000 of its members beginning in 2011. It set a maximum contribution it would make toward what a hospital was paid for knee and hip replacement surgery, colonoscopies, cataract removalsurgery and several other elective procedures. Under the new approach, called reference pricing, patients who wished to get a procedure at a higher-priced hospital paid the difference themselves.

For example, in 2011 the Calpers maximum contribution for a knee or hip replacement surgery was set at $30,000. A Calpers patient receiving knee or hip replacement surgery at or below this reference price paid the usual cost-sharing: 20 percent of the cost, up to a maximum of $3,000. But a patient electing to use a hospital that charged, say, $40,000 paid the usual cost-sharing in addition to the $10,000 above the reference price.

As Calpers initiated the new approach, 41 of the several hundred hospitals in California could provide knee and hip replacement procedures at or below $30,000 and with acceptable quality, as measured by things like low readmission rates and high rates of use of guideline infection controls. Some hospitals charged more than $100,000 for the procedures.

The results of knee and hip replacement surgery reference pricing were striking, as were those for cataract removal, arthroscopy and colonoscopy. In a series of studies, James Robinson and Timothy Brown, University of California, Berkeley, health economists, found that under reference pricing, Calpers patients flocked to lower-priced hospitals and outpatient surgical centers. Prices and total spending for the procedures plummeted.

For knee and hip replacements, lower-priced hospitals saw their market share increase by 28 percent. As higher-priced ones lost market share, many chose to reduce their prices. Prices for the procedures fell by an average of more than 20 percent, saving Calpers and its patients $6 million over two years.

Under reference pricing for cataract removal surgery, the average price paid also dropped by nearly 20 percent, saving $1.3 million over two years. For colonoscopies, $7 million was saved — a 28 percent drop. And for knee or shoulder arthroscopy, prices fell by about 17 percent. For these procedures, Calpers reduced patient cost-sharing if they chose a free-standing, outpatient surgical center, as opposed to a much more expensive hospital.

During the period of time Calpers saw 20 percent price declines for reference-priced services, typical health care prices paid by employer-sponsored plans rose by about 5.5 percent.

Despite the success of the effort by Calpers, reference pricing is not a full solution to rampant health care spending growth. Because it relies on encouraging patients to visit lower-priced hospitals and surgical centers, it works only with procedures for which patients can reasonably shop around.

This excludes care over which patients have little control, such as that provided in emergencies or while they are already hospitalized or incapacitated. One study estimated that about 40 percent of health care spending is for services for which patients could shop.

But there is another reason reference pricing is hard to install broadly. It requires patients to have ready access to comprehensible price and quality information. Such transparency is not commonplace. Even when this information is available, consumers with cognitive impairments or who are overwhelmed with illness and other demands would have trouble making the best use of it.

Some consumers might prefer to delegate to insurers the decisions about where to obtain care. In narrow network plans, for instance, insurers select high-quality hospitals and negotiate the best price; patients pay the same amount out of pocket no matter which hospital they visit within the network. Reference pricing shifts some of the burden of figuring out where to obtain care from insurers to consumers. On the other hand, compared with narrow network models, it preserves broader choice for the consumer.

Reference pricing also requires sufficient competition among hospitals. If the number of hospitals is too low, patients will not have a choice about where to receive care, and hospitals will not have an incentive to reduce prices. Assessing the degree of competition, quality and choice for the purposes of establishing and updating reference prices imposes an administrative cost that should be weighed against any savings.

For this reason, some large employers are contracting with regional “centers of excellence,” such as the Cleveland Clinic, to which patients can be referred even if there is limited hospital choice in their hometowns.

Another concern is that reference pricing could encourage lower quality, as health care organizations cut costs to reduce prices. Analysis by Mr. Robinson and colleagues did not find adverse effects of reference pricing, however. “Significant reductions in cost with no change in quality: That’s called improved value,” he said.

Source: The New York Times

For answers to your pressing questions call Jim Robeson, the Medicare Answer Guy @ (858) 935-9120. Visit website

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