Aetna's vice president and head of Medicare Part D shares insights into Medicare Advantage's growth ahead of the annual enrollment period (AEP).
Medicare Advantage plans will welcome an influx of new beneficiaries when the AEP opens this month, adding to the momentum towards the private sector offering.
No longer a small piece of the Medicare pie, Medicare Advantage has grown at a steady rate and now accounts for nearly half (48%) of the eligible Medicare population, according to data by Kaiser Family Foundation.
Terri Swanson, Aetna vice president and head of Medicare Part D, spoke with HealthLeaders about the Medicare Advantage surge and Aetna's plan to bring in members, as well as the shifting payer landscape.
Aetna has more than 3.2 million beneficiaries enrolled in a Medicare Advantage plan and recently announced its 2023 Medicare offerings ahead of the AEP, which runs from October 15 to December 7.
This transcript has been edited for clarity and brevity.
HealthLeaders: What do you attribute the Medicare Advantage boom to?
Swanson: It's grown for a couple of different reasons. First of all, the demographics is growing. You've got over 10,000 people aging into Medicare every day nationally. The other thing is more and more people are learning about Medicare Advantage. Because, as Medicare Advantage plans, we're able to manage the all-in, totality of members' health benefits, we've been able to invest in other kinds of benefits that original Medicare doesn't offer. So people who come to Medicare Advantage can get things like dental, vision, hearing. Now there's even more supplemental benefits as CMS has changed some of the regulations over the last few years to give plans more flexibility in terms of what we can offer people that will assist in maintaining or improving their health.
HL: What is driving Aetna's Medicare Advantage strategy?
Swanson: We've had really strong growth over the last number of years and we expect to continue on that trajectory. One of the things we work on every year is to make sure we have a product portfolio that has something for everyone. The Medicare population and particularly the people driving Medicare Advantage are very diverse. Minorities comprise over a third of Medicare Advantage beneficiaries, versus closer to 15% on the fee-for-service side. Medicare Advantage beneficiaries tend to be low-income. Many are dual eligible, which is a large and growing sector of the business. And they're medically complex with multiple chronic conditions. So our product strategy is to make sure we have products for that diverse spectrum of people.
HL: What factors are driving competition the most and how have those evolved?
Swanson: The marketplace is incredibly competitive and that's actually one of the things I like about it, to be quite honest. It's really competitive because you have companies like ours and our peers in the industry, who are very focused on growth. So we want to bring something to the market that beneficiaries will like. We want to meet their needs, we want to innovate, and continuously innovate to keep upping our game. In the grand scheme, that's how our country really benefits from having the private sector involved in things like Medicare Advantage plans.
There are tons of plans available, something like 4,000-plus nationally, the momentum is not going to slow down. With the different kinds of benefits we're now allowed to offer, we can just give beneficiaries things they can't get in a traditional Medicare fee-for-service plan.
HL: In general, what do you identify as the biggest challenges facing payers in the near future?
Swanson: There are a lot of changes coming. The Inflation Reduction Act that was recently passed has a lot of changes for Medicare and particularly Medicare Part D. All of us have to navigate those changes and pivot. It will be good in the long term but it's a lot of regulatory change and that’s always challenging. It's a feature of our business. That particular set of changes is the most significant set of changes for Medicare Part D since its inception in 2006.
The other thing is, with the nature of our changing membership base, the expectations are much higher. We talk about things often in terms of not wanting to necessarily judge ourselves relative to other insurance providers, but our members are going to judge us based on every other digital experience they have. So we are very aware that people expect our online experience to be like Amazon, like Google, like Uber or other services they use that are purely consumer services. So as CVS Health and certainly Aetna as part of that, we are very focused on making sure the member experience is as great as it can possibly be, whether that's digital on the phone or in one of our in-person locations. That rising tide of expectation is something that the entire industry needs to step up in and do right by our members.
“We want to bring something to the market that beneficiaries will like. We want to meet their needs, we want to innovate, and continuously innovate to keep upping our game. In the grand scheme, that's how our country really benefits from having the private sector involved in things like Medicare Advantage plans.”
Terri Swanson, vice president and head of Medicare Part D, Aetna
Jay Asser is the contributing editor for strategy at HealthLeaders.