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Medicare Advantage Plans with Fitness Benefits Snag Healthier Enrollees

 |  By John Commins  
   January 12, 2012

Medicare Advantage plans that include fitness benefits such as gym memberships attract significantly healthier enrollees who are also less expensive to cover, according to a study in The New England Journal of Medicine.

"It makes sense. The people who would value fitness memberships would be healthier and have fewer functional limitations," says Amal N. Trivedi, co-author of the study, Fitness Membership and Favorable Selection in Medicare Advantage Plans. "And that group of seniors that participates in fitness programs has lower health expenses."

The study examined 11 Medicare Advantage plans that offered fitness club memberships against a control group of 11 Medicare Advantage plans that did not offer the benefit.  Researchers compiled data from 2002 through 2008 and compared the self-reported health status of the people enrolled in one of the plans before the gym membership was offered, with the self-reported health status of people who enrolled after the benefit was offered.

The proportion of enrollees who reported that they were in excellent or very good health was 6.1 percentage points higher among the 755 new enrollees in plans that added  fitness benefits than it was among the 4,097 people who enrolled before the benefit was included, the study found.

Conversely, the proportion of new enrollees who reported physical activity limitations was 10.4 percentage points lower, while the proportion of enrollees who reported problems walking was 8.1 percentage points lower, when compared with the earlier enrollees, the study found.

Within the control plans that did not offer gym memberships, differences between the 1,154 new enrollees and the 3,910 earlier enrollees were only 1.5 percentage points or less for each measure. The adjusted differences between the fitness benefit plans and the control plans were 4.7 percentage points higher for general health, 9.2 percentage points lower for activity limitations, and 7.4 percentage points lower for difficulty walking.   

"If you look at the proportion of plans that offered coverage with fitness memberships from 2002 through 2008, there was a fourfold rise from 14 of the plans that had continuous participation in the Medicare over that time period to 58," says Trivedi, a general internist with the Department of Health Services, Policy, and Practice, Alpert Medical School of Brown University, and a researcher with Providence Veterans Affairs Medical Center, Providence, RI.

"If you extrapolate that trend it's probably more likely that even more plans offer coverage with fitness memberships in 2012," Trivedi says. "We were very struck by the tremendous growth in the number of plans that offer gym membership. That suggests to us that this is probably an attractive business proposition for health plans."

While the gym memberships and other wellness benefits are widely seen as a way to improve enrollee health and reduce healthcare costs, Trivedi says that represents a skewering—whether intentional or not—of the intent of the Medicare Advantage program.

"The hope was that plans would compete against each other on the basis of their ability to improve care and reduce costs and not on their ability to attract the healthy and exclude the sick," he says. "We don't know the rationale for why plans offer these memberships, but the effect is that the plans get a healthier slice of the Medicare population."

"There are lots of reasons to offer fitness memberships. It could be to improve the health of existing enrollees or to retain enrollees who value that service," he says. "In general policy makers are uncomfortable with the notion that plans are able to compete on the ability to cherry pick the healthiest enrollees."

Robert Zirkelbach, spokesman for America's Health Insurance Plans, contends that " [one] from a methodological standpoint they are relying on self-reported health status and two they acknowledge that some of the data they are looking at is from before the enhanced risk adjustment of 2004. There is risk adjustment system in place designed to address the adverse selection."

"The broader, more important point," Zirkelbach says, "is that health plans are providing services that beneficiaries want. They are responding to the demands of consumers—particularly at a time when there is broad agreement from across the healthcare system that we need to do more to encourage people to live healthier lifestyles, to get preventative care, and to take better care of their health. Health plans have pioneered the types of programs on the commercial side and in public programs to help patients better manage their health and live healthier lifestyles. That is showing demonstrative results in improved health, better health outcomes, and lower costs." 

Trivedi says he hopes the study will make policy makers more aware of the consequences that even relatively small changes in benefit design can have on a program. "To the extent that policy makers want plans to just compete on their ability to provide high quality service to enrollees and reduce costs, that they should be aware that subtle changes in insurance benefits can have big results," he says.

The idea that health insurance companies might be using fitness benefits to cherry pick healthier enrollees has been a subject of speculation in healthcare economics circles for several years but Trivedi says there hadn't been empirical data to back up the idea before his study. "That is what we enjoyed about this study— that we could finally put some numbers to this phenomenon that people have been speculating about for some time," he says.  

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

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