Medicare Advantage spends a lot of money to cover the most expensive patients
CMS will close similar plans (any Medicare Advantage plan with more than 80% of a doubly eligible population) in 2023, and those enrolled will move to D-SNP. This impending change has helped drive insurers’ interest in these plans, Phillips said.
A broader focus by the healthcare industry on addressing the social determinants of health and advancing values-based care has also contributed to the growth of the D-SNP, Rizer said.
The dual-eligibility population, which tends to use more medical services than others, has historically been opposed to managed care plans, but that may be changing, Rizer said. “In recent years, we’ve also seen a more innovative set of additional benefits that can be especially appealing to dual eligible people who could drive growth,” he said.
States using Medicaid managed care have also accelerated D-SNP adoption, Rizer said. A growing number of states require that insurers offering Medicaid managed care contracts also offer D-SNPs. The goal is to better integrate care for doubly eligible beneficiaries, he said.
Medicaid record enrollment during the COVID-19 pandemic also accelerated the adoption of D-SNP by industry, said Nick Herro, director of the Chartis Group.
Insurers also have a financial interest in offering these products.
CMS pays more Medicare Advantage insurers to take on D-SNP risk. In addition to receiving a risk-adjusted payment based on the number of conditions members have, the plans receive improved payments to take into account the complexity of caring for this population, through a measure called the categorical adjustment index. Some state Medicaid agencies also offer Medicare Advantage insurers an additional reimbursement to provide more benefits.
“The form follows finances,” Phillips said. “Most insurers have found that it’s a way to improve profitability because of slightly increased payments, and also because you can coordinate services and networks more efficiently.”
Four of Medicare Advantage’s largest insurers control nearly 75 percent of the special needs plan market, with UnitedHealthcare, Humana, Centene and Anthem covering more than 3 million people together, according to Chartis Group data. UnitedHealthcare is the market leader: the $ 12 billion insurer had 1.6 million members of the special needs plan earlier this year, Chartis Group found.
While these figures include people enrolled in all kinds of special needs plans, Herro said D-SNPs account for the lion’s share, with beneficiaries enrolled in other types of SNPs accounting for less than 5%.
The growing patient population and the potential for lucrative returns has attracted new entrants, in addition to the expansions of legacy insurers.
From 2021 to 2022, Aetna increased enrollment in the special needs plan at the fastest pace in the industry, with the $ 5 billion insurer seeing enrollment increase 108.9% year-on-year to 130,573 members early of 2022.
Geographic expansion is the insurer’s main growth strategy, said Laura Esslinger, national vice president of Aetna’s dual-eligible segment. In 2019, the company operated D-SNP in nine states. Today, it offers dual special needs plans in 28 states and more.
To differentiate itself, Aetna expands the benefits that complement family budgets. The insurer offers healthy eating cards, utility assistance, no drug copayments, and an over-the-counter benefit that registrants can use to purchase specific health and wellness products at CVS outlets.
The insurer has also focused on improving its care model by hiring local care managers to help patients access community resources, such as affordable housing, Esslinger said.