Pre-2022 Annual Enrollment, a Look Back at 2021 Medicare Advantage Plan Features

"As Medicare Advantage takes on an even larger presence in the Medicare program … [it will] be important to monitor how well beneficiaries are being served in both," notes Kaiser Family Foundation.

Medicare Advantage (MA) marketing launched October 1 in advance of the 2022 Annual Enrollment Period (AEP). Prior to HealthLeaders' survey of 2022 plans publishing next week, we first look back at the 2021 MA season. Using Kaiser Family Foundation's (KFF) summary of the 2021 Centers for Medicare & Medicaid Services (CMS) Medicare Enrollment and Dashboard Files, we explore enrollment, premium, and other trends including the supplemental benefits that distinguish MA from traditional Medicare. This could be changing, however, if dental, vision, and other supplemental benefits are added under the Democrat-proposed, $3.5 trillion Build Back Better plan while MA would see even more growth if eligibility is lowered to age 60.

Enrollment

KFF notes that 2021 MA enrollment totaled 26.4 million people, or 42% of total Medicare beneficiaries (62.7 million). This number has more than doubled since 2000, when MA-PD (prescription drug plan) enrollment was roughly 7 million. This number dipped for a brief period at the turn of the new century (2001­–2005) but has more than doubled since then, with roughly one to two million new enrollees joining the program each year between 2007 and 2021. More than half of all Medicare beneficiaries are expected to enroll in an MA plan by 2030.

Most of this enrollment is in individual Medicare Advantage plans versus employer- or union-sponsored (67% compared to 19%). There are eight states, however, where group MA market share is noteworthy: Alaska (100%), Michigan (45%), Maryland (39%), West Virginia (39%), New Jersey (37%), Wyoming (35%), Illinois (32%), and Kentucky (31%).

Special needs plans (SNP) make up an even smaller percentage of MA enrollment, but their numbers have grown as well. Fifteen percent of Medicare beneficiaries, or 3.84 million people, were enrolled in SNPs in 2021. Most of these (88%) are members of dual-eligible special needs plans (D-SNPs), which applies to those also eligible for Medicaid, versus chronic condition (C-SNP) and institutional (I-SNP) plans. Total SNP plan enrollment has more than tripled since 2010.

Geographically, MA enrollment in 25 states plus Puerto Rico represents between 40%–50% of beneficiaries. Among states with penetration rates of 30% or less, Midwestern states predominate with KFF calling out six—Vermont, Maryland, Alaska, and Wyoming—where MA has less than 20% market share.

UnitedHealthcare (UHC) dominates the MA market, representing 7.2 million or 27% of MA enrollments in 2021. KFF adds that UHC growth has exceeded all other plans for five consecutive years. The MA field also includes Humana (4.8 million, 18%), BlueCross BlueShield plans including Anthem (3.8 million, 14%), and CVS Health (2.8 million, 11%). The rest of the field includes Kaiser Permanente, Centene, and Cigna (3.4 million, 13% collectively) with all other insurers representing 17% or 4.5 million enrollees.

Premiums and plan design

In examining the details of MA, KFF's second 2021 analysis focuses on those plans with MA-PD. This model represents 89% of all plans offered, with 90% of enrollees in this plan type.

Of the 17 million enrolled in MA-PD, most (65%) pay no premium. For those who do, premiums range from less than $20 per month to $100+ per month with the average being $21. These already-low premiums for most MA-PD enrollees are also declining. Between 2020 and 2021, monthly premiums declined $4 per month, driven by premium declines for local PPOs.

On average, HMO plans are the lowest priced ($18 per month). This is followed by local PPO plans and regional PPOs ($25 and $48 monthly, respectively). Regional PPOs provide maximum choice, while local PPOs—whose enrollment has scaled notably since 2016—offer the cost benefits of narrow networks. HMO remains the predominant plan design, however, representing 60% of MA-PD enrollments followed by local PPOs at 35% and regional PPOs at 4%.

Cost-sharing and prior authorization

The average maximum out-of-pocket limit for Part A and B services under MA plans was $5,091 for HMO plans and $9,208 for PPOs. This compares to the 2021 federally required limit of $7,550 and $11,300, respectively. Kaiser notes that the "average out-of-pocket limit for in-network services has generally trended down from 2017 but increased slightly between 2020 to 2021."

Moving from cost-sharing to cost control, prior authorization (PA) is a well-established practice in the MA program, applying to 99% of MA enrollees. These range from inpatient hospital and skilled nursing facility stays to diagnostic procedures to select vision, hearing, and dental services. Ninety percent or more of MA enrollees require PA for the services named above as well as for durable medical equipment, part B drugs, non-emergency ambulance services, diabetic supplies and services, and home health. PA can also apply to services one might not consider, such as podiatry (required across 63% of MA plans).

Benefit design

An advantage of MA—one that has built the Medicare private market—is enrollee access to benefits traditional Medicare does not offer. These typically include vision, hearing, dental, and fitness benefits with more than 90% of plans offering these supplemental benefits in 2021. Such benefits may also include over-the-counter products; meal, transportation, and in-home support services; and the telehealth, remote-access, and remote monitoring services that have become critical during the coronavirus pandemic.

KFF notes: "Though these benefits are widely available, the scope of specific services varies … Plans also vary in terms of cost sharing for various services and limits on the number of services covered per year and many impose an annual dollar cap on the amount the plan will pay toward covered services."

As Medicare Advantage continues to expand that scope—with services such as acupuncture, gym membership, and healthy food incentives growing—the program will also grapple with what traditional Medicare expansion might mean. As KFF writes: "As Medicare Advantage takes on an even larger presence in the Medicare program … [it will] be important to monitor how well beneficiaries are being served in both," notes Kaiser Family Foundation. Proposals include lowering Medicare eligibility to age 60 and the addition of vision, hearing, and dental benefits. Simultaneously, however, have been proposals to use Medicare Advantage's private model over a public solution to help achieve Medicare for All.

Health Affairs writes: "Under some proposals, President Joe Biden’s Medicare-like public option would be replaced with private insurance options. Either MA plans would be allowed to compete for non-Medicare business on the insurance exchanges, or insurers would negotiate prepaid contracts with providers, using government funds."

Continuing that "Medicare Advantage may or may not be an ideal policy lever to pull" in light of continued needed analysis on MA's cost, quality, and access landscape compared to traditional Medicare, these are critical questions at the cusp of the 2022 AEP season. Watch for HealthLeaders' upcoming story on how new individual payer offerings compare to 2021 trends.