It is rare for anyone to enjoy selecting medical benefits. It’s often confusing, overwhelming, and frustrating. But new benefits available through certain Medicare Advantage plans have the potential to better meet the needs of people with chronic conditions – making the frustration of selecting a Medicare Advantage plan even more worth it. These new benefits referred to as “supplemental benefits” provide an enormous opportunity for Medicare Advantage plans to work with businesses in new ways to improve the care outcomes for older adult enrollees.
Medicare is a federal medical coverage program for adults who are 65 and older and people with disabilities. It should not be confused with Medicaid, which is administered by each US state and requires individuals to be below a certain income and/or asset limit to qualify. There are two ways to receive Medicare coverage – Original Medicare and Medicare Advantage.
Original Medicareconsists of Part A (hospital insurance) and Part B (medical insurance), which are provided directly by the federal government. Part D (prescription drug insurance) is provided through private insurance plans that must be purchased in addition to Original Medicare coverage.
Medicare Advantage, which is sometimes called Part C, allows enrollees to choose to receive their Medicare coverage (including Parts A, B, and D) through a private insurance plan, rather than directly from the government. Medicare Advantage plans must cover everything that Original Medicare does, but may have more limited networks or other access limits, such as referral requirements. However, Medicare Advantage plans are allowed to offer certain supplemental benefits not covered through Original Medicare.
With the aging of our population, the number of Medicare enrollees continues to grow. The latest government data shows that there are almost 64 million people enrolled in Medicare. About 56% are enrolled in Original Medicare, with the remaining 44% enrolled in Medicare Advantage plans.
Along with the growth in the number of older adults in the country, we have also seen a growth in the number of people who enroll in Medicare Advantage plans. Within the last several years, more people are choosing Medicare Advantage plans instead of Original Medicare. The percentage of people enrolled in Medicare Advantage plans is expected to increase to an estimated 51% by 2030. According to the Kaiser Family Foundation, the largest Medicare Advantage plans currently include UnitedHealthcare, Humana, BlueCross BlueShield, and CVS Health.
In 2018, to support the needs of older adults living with chronic conditions, Congress passed the Chronic Care Act. For the first time, this legislation permitted Medicare Advantage plans to offer additional benefits – referred to as “supplemental benefits” – to certain groups of enrollees. Prior to this, Medicare Advantage plans could only provide benefits that they offered to all enrollees. For example, in the past, a Medicare Advantage plan could offer free gym membership coverage, but it had to do so for everyone in its plan. Now, that plan could cover specialized fitness classes for only to its enrollees who have high blood pressure or diabetes. More and more Medicare Advantage plans are offering supplemental benefits. According to a recent ATI study, only 14% of plans offered supplemental benefits in 2020. That number increased to 34% of plans offering supplemental benefits in 2022.
Supplemental benefits fall into two categories – addressing social determinants of health or addressing health-related needs. Social determinants of health refer to any non-medical factors that may influence your overall health and well-being. Examples include housing quality, transportation access, food security, and environmental factors such as air and water quality. Supplemental benefits that address social determinants of health include:
- Food & produce
- Social needs benefits (non-fitness club memberships, park passes, family counseling)
- Indoor air quality equipment & services
- Services supporting self-direction (interpreters, financial literacy classes, technology education)
Health-related needs refer to benefits that can be considered health services but are not typically covered under Medicare. Supplemental benefits that address health-related needs include:
- Therapeutic massages
- Adult day health services
- In-home support services
- Home-based palliative care
- Supports for caregivers of enrollees
Opportunities to Partner with Medicare Advantage Plans
Supplemental benefits can help keep older adults healthy and improve their quality of care and quality of life. With more benefits being offered, there are new business opportunities for private and community-based organizations to link with Medicare Advantage plans to provide and implement these supplemental services.
One key fact that businesses must understand is that Medicare Advantage plans do not have an unlimited budget to provide supplemental benefits. While the exact calculation is complicated, the average amount a plan can choose to spend on supplemental benefits averaged to $140 per enrollee per month in 2021, according to the Kaiser Family Foundation. Therefore, plans are more likely to offer time-limited or cost-limited benefits (such as transportation to doctor’s appointments or a limited number of fitness classes) rather than ongoing benefits that could be more expensive (such as home health aide services).
Despite these limitations, companies are capitalizing on new opportunities to partner with Medicare Advantage plans. Startups like GetSetUp, which began as a platform to teach technology to older adults, have found success in partnering with Medicare Advantage plans. Last July, they expanded their interactive learning platform into a new health direction that helps their 4.6 million members understand the basics of Medicare, plan types, available benefits, and fun health and wellness classes that keep them engaged.
Major ride-sharing companies like Lyft, which partnered with Medicare in 2016, have found success in embracing Medicare Advantage for non-emergency medical transportation. It was recently reported that one-third of Lyft’s passengers use the service to get a ride for medical care. Similarly, nonprofits are finding success. For example, God’s Love We Deliver provides medically-tailored meal deliveries to enrollees’ homes. It has partnered with Medicare Advantage plans to offer members meals for a short time after surgery or inpatient hospital stays. There has also been discussion of home modification companies, like HouseDoctor and HouseWorks LLC offering services such as brighter lighting, handrails, safer kitchen settings, assistive seating, stair lifts, and wider doorways through supplemental benefits.
The flexibility of Medicare Advantage supplemental benefits allows for innovation and new partnerships that will hopefully result in better chronic disease management for enrollees. By enabling partners to tailor interventions to people with specific needs – such as for those with diabetes or with cancer – these partners can help improve the care received by these more vulnerable enrollees. With a record number of older adults living longer in their communities, there are massive opportunities for businesses to be creative and anticipate changes that come with servicing the needs of older adults and their families. If successful, these new partnerships can improve the quality of care and quality of life for older adults.