Throughout the year, Medicare eligible individuals are bombarded with TV, print, and internet advertisements about extra benefits they can receive by joining plans. Yet, while supplemental benefits aim to enhance the health outcomes of enrollees, there is a concerning lack of knowledge about how many Medicare enrollees are actually receiving these benefits, to what extent, and whether they are equitably accessible. This knowledge gap is especially worrisome as these supplemental benefits are more widely offered in Medicare Advantage plans serving individuals who are dually eligible for Medicare and Medicaid, and who are disproportionately people of color and people with disabilities and may already have access to similar services through Medicaid.
Medicare Advantage Plans and Supplemental Benefits: An Overview
Medicare Advantage (MA) plans are privately operated insurance plans that partner with the Centers for Medicare & Medicaid Services (CMS) to administer Medicare benefits. While private plan options have been around since the inception of Medicare, their growth skyrocketed in the 2000s due to policy changes that incentivized plans to enter the market. Today, nearly half of all Medicare enrollees receive their Medicare coverage through MA plans, and projections estimate that enrollment will reach 70% by 2030.
MA plans are required under federal law to cover all benefits available in Original Medicare and have the option to offer supplemental benefits not covered by the traditional program. Supplemental benefits are financed by rebates CMS pays to plans, which have increased significantly over recent years. Prior to 2019, MA plans primarily offered dental, vision, hearing, and gym memberships as supplemental benefits. Under pre-2019 rules, any supplemental benefits that a plan offered had to be made available to all plan enrollees. Then in 2019, Congress and CMS authorized MA plans to expand the types of supplemental benefits they offer and to tailor those supplemental benefits to targeted populations enrolled in the plan. Currently plans can offer two categories of supplemental benefits:
Primarily Health-Related Supplemental Benefits
In 2019, CMS expanded the definition of primarily health-related benefits to encompass services used for diagnosis, prevention, or treatment of illnesses or injuries; compensation for physical impairments; improvement of functional/psychological impacts of health conditions; and reduction of avoidable emergency and healthcare utilization. In addition to traditional benefits like dental, vision, hearing and gym memberships, plans can now offer additional non-medical services such as personal care, home modifications, caregiver supports, adult day care, home-based palliative care, and more.
Special Supplemental Benefits for the Chronically Ill
Since 2020, MA plans have been authorized to provide Special Benefits for the Chronically Ill (SSBCI) under the CHRONIC Care Act. These benefits can be both primarily health-related or non-primarily health-related and plans can offer different benefits to different populations. For instance, a plan could offer indoor air quality equipment to individuals with chronic heart failure, while providing meals to enrollees with diabetes. Plans can also bundle benefits together where the member chooses which benefits they want to pay for using a flexible spending account with a fixed spending limit.
The Need for Data and Transparency
Given the tremendous flexibility that plans now have in designing their offerings and the significant growth of enrollment in MA plans, close monitoring is needed to ascertain whether members actually receive the benefits plans are marketing to enrollees and whether they are having an impact on the health and well-being of plan enrollees. Regrettably, there is currently little to no data available on the actual utilization of these benefits by Medicare enrollees, despite the substantial federal funding plans receive to offer them.
This data gap becomes even more concerning in the context of MA plans serving individuals who are dually eligible for Medicare and Medicaid. These plans – known as Duals Special Needs Plans (D-SNPs) -receive higher federal payments to serve this population, which is more likely to have complex care needs and disproportionately includes people of color and people with disabilities. For dually eligible individuals, some MA supplemental benefits may overlap with Medicaid benefits to which they already entitled, limiting the value of the supplemental benefits offered by the plan. Instead of increasing access to services, the supplemental benefits may sometimes create barriers to accessing the Medicaid benefits to which they are entitled. For example, dually eligible people who have access to comprehensive dental through Medicaid often report significant barriers to receiving dental treatment at all when their Medicare Advantage plan is also offering some dental coverage. Addressing current data deficiencies is particularly important to better understand how supplemental benefits are working for dually eligible individuals, to promote equitable access to essential care for this population, and to foster comprehensive monitoring practices.
Supplemental Benefits Data: What We Know and Don’t Know
The existing data on supplemental benefits is limited in scope. Researchers know the number of plans offering these benefits, their regional presence, and the types of benefits they offer. Although this limited data reveals intriguing trends, it fails to paint a comprehensive picture. Here are a few key insights:
- The number of plans offering new supplemental benefits has increased by 250% since 2020, from 626 plans to 2,207 plans in 2023.
- In 2023, plans offer at least one new supplemental benefit in the majority of counties across the country. However, rural areas, particularly in California, Colorado, Kansas, Montana, Nebraska, Nevada, Oregon, Texas, and Wyoming, have fewer plans offering these new benefits.
- MA plans are offering SSBCI benefits in areas with higher social vulnerability and greater diversity.
- There are variations in the types of supplemental benefits offered by plans due to a number of factors including the cost of the benefit and the administrative barriers plans face in implementing the benefit. For example:
- 71% of plans offer food and produce, while only 4% of plans offer structural home modifications since structural home modifications can be very costly and the vetting process of providers who complete home modifications is more complex.
- 76% of plans offer In-Home Support Services, while 3% of plans offer adult day health services likely due to the ongoing impact COVID-19 had on the availability of adult day health services.
- Medicare Advantage Special Needs Plans are more likely to offer the new supplemental benefits compared to standard MA plans.
- The number of plans offering specific benefits for targeted diseases has increased. For instance, plans offering benefits for people with dementia increased from 9 in 2020 to 165 in 2022.
While we know what plans are offering, there is a lack of data on who is receiving these services and to what extent. We don’t have information about the number of enrollees utilizing these benefits, their demographic characteristics, and whether disparities in access exist based on age, disability, race, ethnicity, primary language, region, dual eligibility status, and other demographics. Demographic data is essential since current data already demonstrates disparities in access to care in Medicare Advantage based on race and other demographic factors.
The absence of this basic data not only hampers analysis of access but also, importantly, quality of services. Utilization data is a fundamental first step toward any efforts to determine whether particular supplemental benefits are improving the health and well-being of Medicare enrollees. For example, although 1,029 plans in 2023 offer in-home support services, CMS does not collect information about how many plan members use the benefit or their demographic characteristics, information that is vital to assessing whether this benefit is helping members remain living at home and connected to their communities. Similarly, as of 2021, 94% of people enrolled in an MA plan were in a plan that offered some level of dental coverage. Yet, CMS does not require plans to report on how many people use the benefit, making it impossible to determine if the benefit is improving the oral health of plan members or whether plans have an adequate network of dental providers.
Recognizing the need for improved transparency, CMS has taken recent steps to address the lack of data on supplemental benefits. Starting this year, MA plans will be required to report their expenditures for supplemental benefits as part of their medical loss ratio reporting. This year, CMS has also proposed collecting utilization data for supplemental benefits to begin in 2024. CMS did not, however, propose to require plans to report utilization data with accompanying demographic information. The absence of demographic information would limit the ability of CMS and other stakeholders to evaluate whether there are disparities in access to and utilization of these benefits. It is also essential that any data that CMS collects is made publicly available for policymakers, advocates, and researchers to analyze. This data is also key for Medicare enrollees who must consider a complex set of factors in making a choice of whether to enroll in an MA plan and which one.
The availability and impact of supplemental benefits in Medicare Advantage plans require close monitoring and transparency. As more individuals rely on MA plans for their Medicare coverage, understanding the utilization, accessibility, and equitable distribution of these benefits becomes increasingly important. To address current gaps, it is essential to prioritize data collection on service utilization and demographic information, enabling a thorough examination of access and utilization disparities among Medicare enrollees. Such efforts will allow for a comprehensive evaluation of these benefits and help ensure that all eligible individuals can access and utilize them effectively. CMS should also continue to work with stakeholders to determine what data to collect from MA plans to evaluate whether supplemental benefits are improving the health outcomes and well-being of Medicare enrollees.