One of the most common benefits Medicare Advantage offers could go away if Democrats succeed in adding dental coverage to traditional Medicare, but experts say the impact on enrollment could be negligible due to the variety of other MA benefits.
Nevertheless, the insurance industry is still worried about how exactly the benefit change would affect MA payments.
Congressional Democrats are hoping to add dental, vision and hearing benefits to traditional Medicare as part of a $3.5 trillion infrastructure package. Dental coverage is a popular benefit offered by MA plans, as recent data show that 94% of MA enrollees are in plans with access to dental coverage.
A recent analysis from Kaiser Family Foundation showed that 47% (23.6 million) of all Medicare beneficiaries don’t have dental coverage.
But shifting this benefit from MA to traditional Medicare may not lead to a dip in enrollment in the program, which has grown in popularity in recent years, experts say. MA enrollment swelled to 26 million this year and is expected to grow in the coming decade.
Dental coverage is a “key part of the benefit, but there are other reasons why folks enroll in MA plans,” said Tom Kornfield, senior consultant with Avalere, in an interview with Fierce Healthcare.
If someone leaves MA for traditional Medicare, they will still likely need to have a Medicare supplemental plan for cost-sharing where premiums tend to be higher than in MA and need a standalone prescription drug plan, he added.
Other benefits could keep MA enrollees in their plans, including the out-of-pocket cap or a gym membership, said Adele Shartzer, senior research associate for think tank Urban Institute’s Health Policy Center.
“If you level the playing field a bit between benefits and traditional Medicare and MA you may get some shifting of enrollment,” she said. “The degree to which that happens depends on why people are enrolling in MA to begin with.”
Kornfield said there wasn’t a shift away from MA more than 15 years ago when the Medicare Part D prescription drug benefit was created. The creation of the benefit didn’t lead to a massive shift away from MA and into private, standalone Part D coverage.
But insurers are closely watching how exactly Democrats draft the legislation to add the benefits. Committees are now putting together the exact policy language, and lawmakers are expected to consider the package this fall.
Major insurance group America's Health Insurance Plans (AHIP) cautioned Congress last month that any additional benefits to traditional Medicare will require a change to the benchmark that calculates MA payments. The benchmark is based on traditional Medicare spending in a geographic area.
AHIP is concerned that if Congress adds the benefits to Medicare without any changes to the benchmark, then an MA plan could have 48% to 73% fewer rebate dollars, which are used to fund supplemental benefits that can address health disparities.
An MA plan submits a bid on the costs for providing services to beneficiaries, and the benchmark is based on the equivalent costs if the beneficiary was in traditional Medicare. If a bid is below that benchmark, the plan will get a rebate for the difference.
“The concern being expressed that if it is not part of the benchmark then could create real challenges for MA plans,” Kornfield said.
AHIP was also concerned that Congress could use MA to pay for the new benefits.
“We look forward to engaging with Congress on any detailed proposals to add dental, hearing and vision benefits to original Medicare that equally meets the needs of all beneficiaries, both those receiving benefits under original Medicare and those who chose Medicare Advantage,” the group told Fierce Healthcare in a statement.
Shartzer said it appears likely Congress will address the benchmark issues in the final legislation.
“I think they are cognizant of that fact,” she said. “When you start affecting payments, obviously that is going to be a big deal to plans.”