If you’re insured through a Medicare Advantage policy or you plan to sign up for one in the next year or two, you could soon be playing in a new ballgame.
That’s because two recent government actions will allow these counterparts to traditional Medicare to offer more benefits, including services to help improve and prolong a sick person’s life as well as equipment to help prevent accidents and emergencies. Think everything from grab bars to palliative care, therapeutic massage to respite support for caregivers.
The catch: Not everyone enrolled in the plan will necessarily be eligible to use the new benefits. And anyone who gets benefits from traditional Medicare will be left out entirely.
Here’s what you need to know about the upcoming changes.
What sets Medicare Advantage apart
First a little background. Private insurers sell Medicare Advantage plans as an alternative to traditional Medicare.
The plans cover hospitalization and doctor visits for the same premium as you would pay for traditional Medicare, currently $134 a month for most people. Advantage plans are allowed to offer additional benefits not provided by traditional Medicare, such as dental and vision coverage. And many Advantage policies incorporate pharmaceutical drug coverage known as Medicare Part D into the plan.
The extra services usually entail a modest additional premium—an average of $36 a month, including drug coverage, according to the Kaiser Family Foundation. In many cases, the extra cost is less than what you’d pay to buy traditional Medicare, a Part D policy to cover prescription drugs, and a supplemental Medigap plan for help with out-of-pocket costs, such as deductibles and coinsurance.
As a result, the Medicare Advantage market, which is currently dominated by two huge insurers, United Health and Humana, has been growing. According to KFF data, 33% percent of Medicare recipients purchased advantage plans in 2017, up from 19% in 2007.
The list of extras is getting bigger
Thanks to an April ruling from the Centers for Medicare & Medicaid Services, Medicare Advantage plans will be able to offer a wide range of additional services, starting as soon as next year.
In a memo explaining the new rules, CMS explains that it is reinterpreting what it calls “primarily health related” supplemental benefits. The new rules expand the definition beyond strict medical care to include “services used to diagnose illnesses, compensate for physical impairments, treat the impact of injuries or health conditions and reduce avoidable emergency care.”
This opens the door to coverage that is currently not included in either Medicare Advantage or traditional Medicare plans.
The list of possibilities is long and covers a multitude of services to help older adults with acute or chronic medical conditions as well as the people who care for them.
These include adult daycare; home-based palliative care, which focuses on improving quality of life for seriously ill patients; home health aides to provide personal care; non-opioid pain management, which could include therapeutic massage; memory fitness services; and respite and counseling services for caregivers.
Equipment to keep frail older adults safer at home are also on the list, such as grab bars and stair rails. So are services to make everyday living a little easier, such as home-delivered meal and transportation to and from doctor visits, as well as some over-the-counter health items, like pill cutters and personal activity trackers.
Restrictions in the fine print
Before you get too excited, Philip Moeller, author of Get What’s Yours for Medicare: Maximize your Coverage, Minimize Your Costs, points out that everyone who wants these benefits won’t qualify for coverage.
“Supplemental benefits must still focus direction on an enrollee’s health care needs and be recommended or provided by a licensed medical professional,” the CMS says. In plainer English, that means you will only be covered for the new services if it will address a previously diagnosed health issue and your doctor has prescribed it.
For instance, you may really want a grab bar in the bathroom because you’ve been feeling a little unstable, but that’s probably not enough to qualify for coverage. According to early interpretations of the rules, you’d need to have already fallen or shown other medically diagnosed signs of instability for your Advantage plan to pick up the tab.
Expect a slow roll out
One additional change, courtesy of the CHRONIC Care Act passed by Congress earlier this year, doesn’t kick in until 2020.
Designed to provide more benefits to people with chronic conditions such as heart disease or diabetes, the act gives Medicare Advantage plans additional flexibility to cover other non-medical benefits, such as wheelchair ramps and access to telehealth and home health services.
Providers are expected to roll out these new benefits, along with the ones approved by CMS for the 2019 plan year, slowly and cautiously. “Insurers are very sensitive to new underwriting risks, especially in areas where they haven’t had experience, don’t know the extent of usage and don’t know what the costs will be,” Moeller explains.
So far there have been no announcements from insurers about changes to their Advantage plans. Details are expected in early fall, before the Medicare annual enrollment period begins on October 15.
Moeller and others speculate that some big insurers will embrace a handful of the new benefits only. “Next year, when the CHRONIC changes kick in, we could see more action,” says Moeller.
All enrollees won’t get equal access
The most confusing and, for some consumer advocates, alarming point about the Medicare Advantage changes: All benefits will not be available to all Medicare Advantage policyholders, says David Lipschutz, senior policy attorney at the Center for Medicare Advocacy.
“Until now Medicare Advantage had to offer the same benefits to all enrollees in a certain service area, usually a county,” Lipschutz explains. If one policyholder was eligible for twice-yearly dental checkups, every policyholder in that plan in a specific service area would receive coverage for twice-yearly checkups.
But a new interpretation of the rules by CMS will allow Medicare Advantage insurers to target benefits to specific policyholders with a diagnosed medical need, as with the grab bar example. Or, they may reserve memory care services only for those patients who have been diagnosed with a form of dementia.
“Insurers now have greater leeway in determining who gets what benefit,” Lipschutz says.
He and other consumer advocates worry this wiggle room will cause plenty of confusion.
Consumers, for example, may flock to Medicare Advantage plans hoping to take advantage of the new benefits only to find they do not qualify for them. In addition, consumer advocates worry, insurers may be able to market more heavily toward healthier patients, who may not need the extra benefits and who cost less to insure.
Traditional Medicare gets the short end of the stick
None of the new benefits will available to people who are insured through traditional Medicare, and CMS says it has no plans to add benefits to the traditional plans.
Aside from the extra costs the government would incur, there is a perception that Advantage plans, which are offered by private insurance companies that negotiate rates with healthcare providers within their network, are better equipped to administer the new benefits in the most cost-efficient manner, Moeller explains. Traditional Medicare, which reimburses providers for each service rendered, is regarded as less efficient.
The merits of that argument can and no doubt will be argued for years to come. In the meantime, says Lipschutz, the scales are tipping toward Medicare Advantage.
“There are likely folks who will benefit from the changes,” he says. “But we’re concerned this leaves behind the two thirds of Medicare recipients with traditional Medicare.”