Medicare Part B Premiums To Rise 2.7% In 2021, With Premiums For Highest-Income Couples Topping $12,000 A Year

When you're saving for retirement, keep in mind that Medicare premiums include surcharges for high-income earners.

Source: Forbes, by Ashlea Ebeling

The Centers for Medicare & Medicaid Services has announced Medicare Part B premiums for 2021, and the base premium increases just 2.7% from $144.60 a month to $148.50 a month. That $3.90 monthly increase compares to a big $9.10 monthly increase last year, after a $1.50 monthly increase the year before. Meanwhile high earners are still getting used to income-related surcharges that kicked into higher gear in 2018, and those have been bumped up again too. The wealthiest senior couples will be paying more than $12,000 a year in Medicare Part B premiums. Part B (the base and the surcharge) covers doctors’ and outpatient services.

The annual deductible for all Medicare Part B beneficiaries is $203 in 2021, an increase of just $5 from the annual deductible of $198 in 2020. What kept the increases n the Part B premiums and the deductible in check this year? As part of the short-term budget bill in October, Congress capped the increases. Yet Medicare spending is expected to grow this year as people seek care they may have delayed due to Covid-19, CMS says.

The CMS announcement comes after last month’s Social Security Administration’s COLA announcement: a 1.3% cost of living adjustment for 2021. The average Social Security benefit for a retired worker will rise by $20 a month to $1,543 in 2021, while the average benefit for a retired couple will grow $33 a month to $2,596. The higher Medicare Part B premium cuts into retirees’ monthly Social Security payments. Part B premiums typically are deducted from monthly Social Security checks.

While most of the 60 million Medicare recipients will pay the new $148.50 standard monthly premium, some will pay less because of a “hold harmless” provision that limits certain beneficiaries’ increase in their Part B premium to be no greater than the increase in their Social Security benefits.

CMS says 7% of Medicare recipients will have to pay income-related surcharges. The graduated surcharges for high-income seniors kick in for singles with modified adjusted gross income of more than $88,000 and for couples with a MAGI of more than $176,000. An individual earning more than $88,000, but less than or equal to $111,000, will pay $207.90 in total a month for Part B premiums in 2021, including a $59.40 surcharge. That’s up 2.7% from 2020, when they paid $202.4 total in a month, including a $57 surcharge.

By comparison, the wealthiest retirees—singles with $500,000 of income or more and couples with $750,000 of income or more—will face total premiums of $504.90 a month per person, including a $356.40 surcharge, in 2020. That comes to $12,117.60 a year f0r a couple.

The income-related premium surcharges apply to Part D premiums for drug coverage too.

CMS announced in July that the average basic premium for Part D, private health plans which cover prescription drugs, is $30.50 for 2021, down 12% from 2017. But it’s still important to shop around for a plan. Even as Part D premiums fall, there may be higher costs elsewhere, such as higher co-pays, narrower formularies, or a drug may not be covered altogether, says Mary Johnson, Social Security and Medicare policy analyst with The Senior Citizens League. The State Health Insurance Programs National Network lists places where you can get free help locally to compare plans. Medicare open enrollment runs from October 15, 2020 through December 7, 2020 for the 2021 plan year.

Insurers Slam CMS Proposal To Hasten Medicare Coverage Of Breakthrough Medical Devices

Insurers slam CMS proposal to hasten Medicare coverage of breakthrough  medical devices | FierceHealthcare

Source: Fierce Healthcare, by Robert King

A major insurance group blasted a proposed rule intended to grant faster Medicare coverage decisions on new breakthrough medical devices, saying the rule could lead to unsafe devices reaching seniors.

The rule, proposed by the Centers for Medicare & Medicaid Services (CMS) back in September, aims to address a lag time from when the Food and Drug Administration (FDA) approves a device and when CMS delivers a national coverage determination (NCD) that would determine whether Medicare covers it.

But America’s Health Insurance Plans (AHIP), the top insurance lobbying group, said there is a vital reason for that lag time.

The proposed pathway could result in a “less rigorous evidence-based coverage process and potentially result in premature coverage of unproven devices for the Medicare population,” AHIP said in comments on the rule. The comment period closed Monday.

The new pathway would only apply to devices that are cleared through the agency’s 510(k) pathway and have a breakthrough designation, which applies to devices that provide a better treatment for life-threatening or debilitating diseases. Under the 510(k) pathway, a device only needs to prove it is similar to another device on the market and bypasses more rigorous clinical studies.

Normally, it takes CMS nine to 12 months to finalize an NCD on a device after it clears the FDA.

AHIP commented that after a medical device is approved by the FDA, a plan’s medical policy committee evaluates its safety and efficacy.

“Absent an NCD, health insurance providers use evidence-based guidelines to develop medical coverage policies,” AHIP said.

However, the proposed pathway would act instead as an “interim NCD” with a less rigorous coverage process, the group commented.

AHIP was also concerned that the 510(k) pathway has sometimes been used to clear medical devices to enter the market without comprehensive safety evaluations.

If CMS decides to continue with the pathway in a final rule, AHIP wants the agency to add a process for stakeholders to evaluate the device for safety, efficacy and value before a Medicare coverage determination is made.

The Medicare Payment Advisory Commission (MedPAC), a panel that advises Congress and CMS on Medicare coverage issues, was also concerned about using the FDA’s approval process to determine Medicare coverage.

“The FDA’s role in the drug and device development process as a regulator is distinct and separate from the role of CMS as a payer,” the panel said in comments on the rule.

The panel said the FDA looks at whether a device is safe and effective for its intended use but may or may not include whether that device is safe for the Medicare population.

CMS should, at the very least, include a coverage with evidence development policy that would still gather clinical evidence on the device, MedPAC said.

The panel was also concerned with CMS’ decision to modify the definitions of “reasonable and necessary” in coverage determinations. Federal law requires Medicare Part A and B to cover items and services that are “reasonable and necessary” for diagnosis or treatment.

Factors used to make this determination include whether the device is safe and effective and is not experimental or investigational.

However, the proposed rule said that commercial insurance coverage could be used to meet the “reasonable and necessary” standard.

But relying on commercial coverage policies could result in coverage of services that don’t improve the outcomes for Medicare patients, MedPAC warns.

“The proposal circumvents Medicare’s coverage determination processes and could undermine Medicare’s evidentiary standard,” the panel added.

AHIP said CMS should not make any decisions based on how a single commercial plan covers a device.

“Coverage by a majority of health insurance providers or a majority of commercial enrollees would be more representative,” AHIP said.

The medical device industry also has concerns with the rule’s proposed definitions.

“Commercial insurance coverage decisions lack transparency and processes for stakeholder engagement and are not appropriate for inclusion in Medicare’s reasonable and necessary definition,” said the Advanced Medical Technology Association (AdvaMed), the leading device lobbying group, in comments.

However, AdvaMed cheered the moves to hasten coverage determination for breakthrough devices.

“CMS is sending a signal to the entire innovation ecosystem that taking the risk to develop new breakthroughs will be rewarded if those devices receive FDA marketing authorization and improve patient care,” the group said.

CMS Finalizes Price Transparency Rule Aimed At Health Plans

CMS finalizes price transparency rule aimed at health plans | BenefitsPRO

Source: BenefitsPRO, by Emily Payne

The Trump administration has taken the drive for health care price transparency a step further with the finalization of a new rule that will require health insurers and self-insured health plans to share details on pricing and cost-sharing.

The Transparency in Coverage rule builds on another highly publicized rule that will require hospitals to post their prices starting in January. Under the new rule, insurers and employer-sponsored health plans will be required to post in-network and out-of-network negotiated rates, “including an estimate of the individual’s cost-sharing liability for covered items or services furnished by a particular provider,” according to the rule. Grandfathered health plans will be exempt.

“President Trump is solving longstanding problems in our health care system; hidden health care prices have produced a dysfunctional system that serves special interests but leaves patients out in the cold,” CMS Administrator Seema Verma said in a statement. “Price transparency puts patients in control and forces competition on the basis of cost and quality, which can rein in the high cost of care. CMS’ action represents perhaps the most consequential health care reform in the last several decades.”

The new rule would go into effect on or after January 1, 2023, giving health insurers plenty of time to prepare for the list of requirements (or challenge it in the courts). The list includes creating online tools to help consumers understand out-of-pocket costs and negotiated rates for 500 “shoppable services,” expanding the list every year thereafter.

Healthcare Bluebook, whose experts were an active part of the policymaking, applauds the new rule. ” We believe this is an important win for consumers and employers and will help deliver a clearer picture of health care costs to support better decision making,” the company said in a statement. “ Our teams are already documenting potential additional requirements for our platform and developing a cost schedule and cost model.”

The news was also met with accolades from ERIC, the advocacy arm of ERISA. “The regulation comes not a minute too soon, as millions of Americans are struggling to pay inflated health care costs. Price transparency will empower patients to make more informed decisions while also driving competition among health care providers, reducing health care costs, and improving the quality of care,” James Gelfand, senior vice president of health policy, said in a statement.

According to the CMS, ” For the first time, most consumers will be able to get real-time and accurate estimates of their cost-sharing liability for health care items and services from different providers in real time, allowing them to both understand how costs for covered health care items and services are determined by their plan, and also shop and compare health care costs before receiving care.”

The rule also calls upon insurers to offer three different machine-readable files, addressing “ in-network provider negotiated rates, historical out-of-network allowed amounts, and drug pricing information.”

The rule also includes some good news for insurers: those who reward consumers for selecting lower-cost, higher-value providers will be allowed to deduct the amount of the savings passed on to the consumer when calculating their medical loss ratios,

PwC: Mental Health, Telehealth Sectors Spur Robust Deal Activity Despite COVID-19

PwC: Mental health, telehealth sectors spur robust deal activity despite  COVID-19 | FierceHealthcare

Source: Fierce Healthcare, by Robert King

Even though the COVID-19 pandemic continues to roil the healthcare landscape financially, mergers and acquisitions remain robust thanks to heavy interest in the mental health and telehealth sectors, one expert says.

Providers have faced major declines in patient volume since the onset of the pandemic. But experts at the firm PwC say financial constraints haven’t cooled deals in the healthcare space.

“This is an interesting recession with a tremendous amount of liquidity in markets,” said Manoj Mahenthiran, head of the private equity sector practice at PwC, in an interview with Fierce Healthcare. “What we are still seeing is that for the right assets, prices really haven’t gone down.”

A prior report from PwC released in July found that the number of deals among provider and payer industries declined in the first half of the year by 21% compared to the same period in 2019.

But there has been a major shift among certain sectors of the healthcare industry.

One of the hottest sectors is in behavioral health that has taken advantage of new flexibilities for telehealth.

“This whole pandemic has shone a spotlight on some of the mental health issues in the country that may have been taboo in the past,” Mahenthiran said.

Digital behavioral health startups raised $588 million in funding in the first half of this year, according to a report from venture capital fund Rock Health. That was on top of the record $5.4 billion in startup funding for digital health investments overall, the report found.

Investors are still very interested in the telehealth space even though there is uncertainty over what the regulatory outlook will be after the COVID-19 pandemic.

The Centers for Medicare & Medicaid Services gave more flexibility for providers to get Medicare reimbursement from telehealth, and providers embraced the technology to grant access for patients afraid of going to an office or hospital due to the pandemic.

But those flexibilities last through the COVID-19 public health emergency, which was recently extended.

“There is apprehension on what will this post-COVID environment look like and what will happen with reimbursements,” Mahenthiran said of investors in telehealth. “If things are delivered over this medium versus the office medium for sure that is definitely something that weighs on a lot of PE funds that are thinking about entering this space.”

But he countered that the popularity of telehealth will outweigh any changes in reimbursement rates.

“Their view so far is that the volume growth is going to far outweigh any such rate reductions,” Mahenthiran said. “It is definitely part of the calculus.”

Medicare And Medicaid To Cover Early COVID Vaccine

A nurse prepares to administer a flu vaccination shot to a woman at a free clinic held at a local library in Lakewood, California.

Source: Politico, by Dan Diamond and Adam Cancryn

The Trump administration this week will announce a plan to cover the out-of-pocket costs of Covid-19 vaccines for millions of Americans who receive Medicare or Medicaid, said four people with knowledge of the pending announcement.

Under the planned rule, Medicare and Medicaid will now cover vaccines that receive emergency use authorization from the Food and Drug Administration, the people said, which is a change from current policy. The regulations, which have been under development for weeks, are likely to be announced by the Centers for Medicare and Medicaid Services on Tuesday or Wednesday.

At least two Covid-19 vaccine developers have said they plan to apply for an emergency use authorization before the end of the year.

The administration is “working to ensure that no American has to pay for the vaccine,” said one official. The administration’s planned rule also will address other Covid-19-related issues, like expanding flexibility for Medicaid patients seeking care for the coronavirus, two people familiar with the plan said.

CMS did not respond to a request for comment about the plan or how it would pay for the cost of vaccines for the roughly 120 million Americans who receive health coverage through Medicare and Medicaid.

CMS Administrator Seema Verma teased the announcement earlier this month in remarks at the HLTH virtual conference.

“I think we’ve figured out a path forward,” Verma said on Oct. 13. “It was very clear that Congress wants to make sure that Medicare beneficiaries have this vaccine and that there isn’t any cost-sharing.”

“And so, stay tuned, you’ll see more from the agency on this very shortly,” Verma added.

Congress in March sought to mandate free coronavirus vaccine coverage as part of a broader Covid-19 relief bill. But under its current rules, the Medicare program doesn’t cover the cost of drugs authorized under emergency use designations — leaving millions of Americans at risk of facing expenses tied to the vaccine.

The Trump administration later determined that it could not fix the loophole through an executive order, setting off a scramble within the health department to find alternative solutions.

Earlier this month, the administration struck a deal with CVS and Walgreens to administer an eventual vaccine with no out-of-pocket costs to seniors and health workers in long-term care facilities. Yet that arrangement only covered a narrow slice of the nation’s more than 60 million Medicare enrollees.

Pfizer Suit Could Be an ‘Earthquake’ for Drug Pricing

Pfizer Suit Could Be an 'Earthquake' for Drug Pricing | Barron's

Source: Barron’s, by Eleanor Laise

Last year, Pfizer posted a billboard outside its midtown Manhattan headquarters showing a larger-than-life patient smiling at his partner. “Dedicated to the brave of heart,” it read.

The patient, Walter Feigenson, 72, of Portland, Ore., says he was paid roughly $1,000 for taking part in the launch of tafamidis—sold by Pfizer (ticker: PFE) under the names Vyndaqel and Vyndamax—a $225,000-a-year treatment for a potentially fatal heart condition. The price, which makes tafamidis the most expensive cardiovascular drug ever launched in the U.S., is “unconscionable” and “completely unjustified,” Feigenson said in an interview with Barron’s.

As a retired entrepreneur living on Social Security income of about $26,000 a year, Feigenson has his prescription covered through Medicare and funding from independent charities, filling in the gaps with free drugs he gets through a Pfizer program for lower-income patients. “I’m in a race to see if I can bankrupt Medicare faster than anybody else,” he says. “I’m not cheap.”

If Pfizer has its way, taxpayers could soon be on the hook for many more doses of tafamidis. In June, the pharmaceutical giant filed a lawsuit against the federal government in U.S. District Court for the Southern District of New York, seeking a judgment in favor of proposed patient-assistance programs that would allow the company to help cover tafamidis copays for many Medicare beneficiaries.

Such programs, which can be sponsored directly by drug companies or independent charities funded largely by the pharmaceutical industry, often cover much or all of patients’ out-of-pocket drug costs, leaving third-party payers such as insurers and Medicare to pick up most of the tab.

The case could reverberate far beyond Pfizer and patients prescribed tafamidis. Patient-assistance programs covering out-of-pocket costs remove a powerful market force—patients’ price sensitivity—that would otherwise push down drug prices, and drugmakers can use them to boost sales of pricey medications, researchers say. A ruling for Pfizer “would be a major earthquake” that could send drug prices soaring, with taxpayers footing much of the bill, says Ge Bai, an associate professor at Johns Hopkins Carey Business School and the Bloomberg School of Public Health, who has studied patient-assistance programs.

Pfizer’s lawsuit takes aim at federal policies that prohibit drugmakers from providing direct copay assistance to Medicare beneficiaries and restrict their funding of and communications with independent patient-assistance charities. Companies straying outside those policies risk violating federal anti-kickback laws, which prohibit them from offering anything of value to induce Medicare patients to purchase the company’s drugs.

Over the past few years, the Department of Justice has collected more than $1 billion in settlements from pharmaceutical companies, including Pfizer itself, that allegedly violated these prohibitions. A Pfizer victory in the tafamidis case could stymie such enforcement efforts, says Max Voldman, an attorney at Constantine Cannon who specializes in health-care industry fraud. A decision in the case could come early next year.

Pfizer and several other drugmakers involved in the settlements have said that their charitable giving helps people lead healthier lives and that all patients deserve access to their prescriptions.

The fact that Pfizer can’t offer the same type of support to Medicare patients that it provides to the commercially insured is a “fundamental inequity,” says Suneet Varma, global president of Pfizer’s rare-disease unit. “That’s what brought us to this point.” As for tafamidis’ price, he says it’s “responsible, because of the transformational value this delivers for patients and the size of the rare-disease population it treats.”

The legal battle is playing out as President Donald Trump and lawmakers of both parties look for ways to rein in Medicare Part D drug spending, which grew nearly 10% annually from 2009 to 2018, reaching $168 billion, according to the Medicare Payment Advisory Commission.

“Tafamidis is a canary in the coal mine” that will help determine the future pricing of similar drugs, says Dr. Dhruv Kazi, a cardiologist and health economist at Beth Israel Deaconess Medical Center in Boston. His research has found that treating all patients eligible for tafamidis—estimated at 120,000 people—would boost total annual U.S. prescription-drug spending by 9%, or $32 billion. If there’s one thing we’ve learned from the pandemic, he says, it’s that “even in wealthy countries like the U.S., ultimately health-care resources are limited, and we have to decide what to opt into and what to forgo.”

Many Medicare patients prescribed high-cost drugs know all about those unpleasant trade-offs, because Part D places no cap on their out-of-pocket spending. Even when they reach catastrophic coverage, they’re responsible for 5% of the drug costs, which is often unaffordable.

Independent patient-assistance charities have stepped into the breach, growing rapidly in the years after Part D took effect in 2006. These nonprofit organizations can take cash donations from drugmakers and use them to help cover Medicare patients’ copays and other out-of-pocket costs, so long as they’re following guidelines issued by the Department of Health and Human Services’ Office of Inspector General that are meant to ensure their independence. Drugmakers aren’t supposed to exert any control over the charities, for example, or receive data that can correlate their donations with sales of their own drugs.

From 2006 to 2015, total giving by major independent charities such as the Patient Access Network Foundation and HealthWell Foundation climbed more than 750%, to $1.4 billion, according to research by the U.S. Treasury’s Office of Tax Analysis. Since then, several charities settled Department of Justice allegations that they helped drug companies steer donations to patients taking their own drugs. Even so, five major patient-assistance charities gave a total of more than $1.1 billion to assist patients in 2018, according to Internal Revenue Service filings.

The programs help drive up drug prices and boost drugmakers’ profits, critics say. The median annual cost of drugs covered by the programs is $1,157, compared with $367 for drugs not covered, and off-patent brand-name drugs are more likely to be covered than their generic equivalents, according to a 2019 study by Bai and others that examined 274 disease-specific programs offered by the major independent charities.

A drugmaker’s $1 million donation to a charity that helps Medicare patients access high-price drugs “has the potential to generate up to $21 million for the sponsor company, funded by the U.S. government,” according to a 2017 Citigroup report. Drugmakers also get tax deductions for their contributions to the charities.

The charities tend to ignore patients who may most need their help, researchers say. Ninety-seven percent of the programs exclude the uninsured from eligibility, Bai’s study found, ensuring that their biggest donors, the drugmakers, get paid for each prescription the charities help cover. Uninsured patients may be eligible to receive free drugs directly from drugmakers, says Krista Zodet, president of the HealthWell Foundation. “One of the main reasons foundations like us are in place is that we can help Medicare patients” in ways that drug companies can’t, she says.

Tafamidis is the only Food & Drug Administration–approved treatment for transthyretin amyloid cardiomyopathy, or ATTR-CM, which causes the heart to stiffen and limits its ability to pump blood. Even before Pfizer filed its lawsuit, some doctors involved in tafamidis clinical trials took the unusual step of publicly criticizing its $225,000 price tag. Early this year, a JAMA Cardiology article co-written by a principal investigator in a tafamidis clinical trial called the drug a “particularly egregious example of price gouging.”

To determine tafamidis’ price, says Pfizer’s Varma, the company first considered the drug’s clinical value, which includes prolonging life and reducing hospitalizations.

CMS Expands List Of Telehealth Services That Can Get Medicare Reimbursement

CMS expands Medicare coverage for telemedicine due to COVID-19

Source: Fierce Healthcare, by Robert King

The Centers for Medicare & Medicaid Services (CMS) has added 11 new telehealth services that Medicare will reimburse, including cardiac rehabilitation services.

The additions, announced Wednesday, are part of the latest push by the agency to accelerate use of telehealth by removing reimbursement barriers. The agency is also giving support to state Medicaid and Children’s Health Insurance Program (CHIP) agencies to expand access to telehealth.

“Medicaid patients should not be forgotten, and today’s announcement promotes telehealth for them as well,” said CMS Administrator Seema Verma in a statement.

The expansion means that the 11 telehealth services will be reimbursed for the duration of the public health emergency amid the COVID-19 pandemic. The emergency declaration was renewed for another 90 days earlier this month.

Verma has hinted that some of the flexibilities to get Medicare telehealth reimbursement could remain after the pandemic.

The newly added services include certain neurostimulator analysis and programming services and cardiac and pulmonary rehab services. The additions mean Medicare will pay for a total of 144 telehealth services.

“Between mid-March and mid-August 2020 over 12.1 million Medicare beneficiaries—over 36%—of people with Medicare Fee-For-Service have received a telemedicine service,” CMS said in a release.

CMS also released a new toolkit (PDF) to give states more guidance on how to expand use of telehealth in Medicaid and CHIP. The toolkit gives examples to help states identify services that could be accessed via telehealth and how telehealth can be reimbursed after the public health emergency expires.

Newsom Tells Calif. To Not Expect ‘Mass Availability’ Of Vaccine Until 2021

Gavin Newsom wearing a suit and tie: FILE - In this June 26, 2020 file photo, Gov. Gavin Newsom holds a face mask as he urges people to wear them to fight the spread of the coronavirus during a news conference in Rancho Cordova, Calif.

Source: SF Gate, by Amy Graff

California Gov. Gavin Newsom said Monday under the best-case scenario, an extremely limited supply of a COVID-19 vaccine approved by the Food and Drug Administration will be available by November or December, countering President Donald Trump’s repeated assurance to the American people that a vaccine could be widely available before the year’s end.

Newsom expects California to receive 1 to 2 million doses in the first vaccine delivery, and this would be the amount needed to inoculate people working in the health care system.

A major inoculation effort — where anyone could go to their local pharmacy for a vaccine — is highly unlikely until next year, he said.

“It is simply unrealistic,” said Newsom. “We don’t anticipate mass availability until 2021.”

The governor said the big question now is whether vaccines will be widely available in the first, second or third quarter of 2021.

Newsom also announced at his regular Monday press briefing the state has created a task force made up of 11 scientists to conduct an independent medical review of the safety of any FDA-approved vaccine before administering it to Californians.

“We don’t take anyone’s word for it,” said Newsom, noting that experts on the review committee hail from top universities such as UC Berkeley and Stanford.

The state is 1 of 5 jurisdictions to submit an advance plan for vaccine distribution and as a result received $29 million from the federal government, the governor said. Under the state plan, the first phase of vaccine distribution would prioritize high-risk individuals including health care workers, seniors age 65-plus and long-term care, essential workers, those with disabilities, racial and ethnic minority groups, rural populations and incarcerated and detained individuals.

The state is also preparing to procure and distribute vaccine supplies such as syringes, alcohol pads and bandages. Other pieces of the plan look at vaccine storage that requires cold conditions, data management and public education.

KFF Analysis Reaffirms Payers’ Strong Financial Performance Amid COVID-19

KFF analysis reaffirms payers' strong financial performance amid COVID-19 |  FierceHealthcareSource: Fierce Healthcare, by Paige Minemyer

A new analysis from the Kaiser Family Foundation reaffirms an ongoing trend in the industry amid the coronavirus pandemic: insurers’ strong financial performance.

Despite the fact that many health plans are waiving the costs associated with COVID-19 testing and treatment, payers across most markets included in the study saw higher margins compared to 2019 and saw those margins increase over the course of the year.

Gross margins for group market plans went up by 22% over the first half of 2020, according to the study, an increase of $20 per member per month. Margins in Medicare Advantage (MA), which already tend to be higher than for other types of insurance, increased by 41% compared to 2019, or about $64 per member per month.

Margins typically grew more gradually prior to the pandemic, according to the report.

“Although we cannot measure profits directly, all signs suggest that health insurers in most markets have become more profitable so far during the pandemic,” the researchers wrote.

Another sign of how well insurers are doing through the pandemic is declining medical loss ratios, according to the study. Only for the individual market did MLRs hold steady at 72% compared to 2019, though these ratios were already quite low, and insurers are likely to issue record rebates.

The MLR among MA plans declined from 85% to 80%, and it declined from 81% to 78% in group plans, according to the study.

Insurers are obligated to pay rebates for these excess funds; in MA, they’ll be required to pay back any funds under 85%, and individual and group plans must meet thresholds outlined in the Affordable Care Act (ACA).

Rebates are calculated based on three years of performance, so in 2021 would include data from 2018, 2019 and 2020, according to KFF.

“Unless these patterns change substantially in late 2020, ACA medical loss ratio rebates in 2021 likely will be exceptionally large across commercial markets,” the researchers said.

Insurers did warn across the board that their strong performance in the first half of the year would likely be balanced out to some degree by an increase in care utilization.

Medicare Open Enrollment Starts This Week. Here Are 5 Trends To Watch

Medicare open enrollment starts this week. Here are 5 trends to watch |  FierceHealthcare

Source: Fierce Healthcare, by Paige Minemyer

Medicare open enrollment begins Thursday, and experts say to keep an eye on how insurers are offering supplemental benefits and the growth of telehealth.

Medicare Advantage (MA) enrollment has climbed annually for the past several years, particularly as baby boomers continue to age into the program. And that’s a trend that’s not likely to slow down, Adam Finkelstein, counsel at Manatt Health, told Fierce Healthcare.

Features that attract beneficiaries to the program, such as out-of-pocket caps and access to tailored chronic care management options, aren’t going away, he said. Plus, MA plans are growing their reach and becoming more available to members in more regions, also driving up enrollment, he said.

“I think the trends that have pushed beneficiaries toward Medicare Advantage plans are continuing and I don’t see any reason for them to stop,” Finkelstein said.

Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma said at a Fierce Healthcare event hosted last month that the feds are expecting a strong enrollment period as well. CMS is projecting the lowest premiums since 2007.

Here are the biggest trends to watch during open enrollment this year:

Number of beneficiaries in high-ranking plans declines

CMS says that 77% of beneficiaries who enroll in an MA plan this year will sign up for a plan with four stars or more. That’s down from the 2020 plan year, in which about 81% of beneficiaries enrolled in high-star plans.

CMS did tout improvement over time in the star ratings, however. In 2017, 69% of beneficiaries who enrolled in MA signed up for a plan with at least four stars.

In addition, the overall number of plans earning four stars or more has increased over the past several years, CMS said. In 2017, 45% of MA plans with prescription drug coverage earned high marks, while about 49% of such plans will earn four or more stars for 2021.

The overall average star rating is 4.06 out of 5 for the 2021 plan year, compared to 4.02 in 2017.

“The historically low premiums for Medicare Advantage plans this year would mean little if they didn’t come paired with high-quality care,” said Verma in a statement.

Telehealth, virtual care boom continues

One of the biggest storylines to come out of the COVID-19 pandemic was the explosion in telehealth use, and executives at major health plans say that has been influential in driving their plans for 2021.

Christopher Ciano, president of Aetna Medicare, said that the insurer will continue to offer telehealth visits for primary and behavioral healthcare needs at no cost-sharing for MA members through the end of the year, with that program potentially seeing an extension in 2021 if the public emergency continues.

He added that Aetna was able to pivot many of its programs to a virtual or telephonic option and intends to continue making those available in the coming year. Experts conducted home risk assessments virtually, and the insurer adapted its partnership with Papa and pharmacist consults to work telephonically as well.

He said that pandemic marked a “huge momentum shift” in conversation around telehealth.

“I don’t think we’d be in the telehealth space we’re in if we didn’t have COVID,” Ciano said.

Mike Polen, senior vice president and CEO of Medicare Solutions at Centene, said MA insurers are looking for various ways to allow consumers to engage in their own care, and telehealth and remote options are a key part of that.

Supplemental benefits continue to blossom

CMS allowed additional flexibilities for supplemental benefits that target beneficiaries’ social needs beginning in the 2019 plan year, and interest in offering these solutions has only grown going into 2021.

For example, Ciano said Aetna began piloting a benefit in 2020 that offered members a stipend for tools to avoid falls, such as grab bars. Success with that program has led the insurer to expand it to more plans for 2021.

Polen said that Centene and other insurers in the MA market have invested heavily in piloting various initiatives, and the challenge is now communicating clearly which ones members have access to.

“The approach that we’re taking is to really focus on those benefits that are the most impactful for the members, and make those as easy as possible to access,” he said.

A group of beneficiaries that will be of particular interest for these initiatives moving forward is people with end-stage renal disease, who will be eligible to enroll directly in MA plans for the first time beginning with this open enrollment period.

Finkelstein said that it’s likely some end-stage renal disease patients will hold out to see how their plan offerings shape up, and that some insurers are planning for these members more quickly than others. Humana, for instance, announced last week that it will take its partnership with Fresenius Medical Care into 39 more states.

“My sense is that there are plans that are out there that are making a concerted effort to design their plans in a way to cater to these beneficiaries,” Finkelstein said.

Insulin savings model draws plenty of interest

A program to watch going into 2021 is CMS’ Senior Savings Model, in which standalone Part D plans and MA plans with prescription coverage agree to cap insulin costs for seniors. CMS said that 88 insurers have inked deals to participate, which Finkelstein said means there are options available in this program for beneficiaries nationwide.

CMS notes that a third of Medicare beneficiaries are diabetic, which means the model would reach a significant number of seniors. Finkelstein said it is one of the “absolute success stories of 2021,” as the number of organizations signing on is high for a CMS demonstration.

“This level of participation is unprecedented,” Finkelstein said.

Big-name payers including UnitedHealthcare, Aetna, Cigna, WellCare and Humana have signed on to participate in the program across multiple states, as have a number of regional health plans.

Ciano said that Aetna is hoping to take lessons from participating in the program in Florida and go from there. Steve Warner, senior vice president of MA at UnitedHealthcare Medicare & Retirement, told Fierce Healthcare that insulin costs are a consistent challenge and that the model is a promising solution.

“What we’re doing with insulin is big,” Warner said. “I think we’ve pushed pretty far.”

Last Updated 12/02/2020

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