How Medicare Advantage Plans Can Increase Consumer Satisfaction

Medicare Advantage plans are more likely to achieve high satisfaction scores when they offer a consistent product message and brand experience and have control over the delivery of care, according to a J.D. Power study. Members frequently choose a plan they understand and find easy to work with. The study measures member satisfaction with Medicare Advantage plans based on six factors in order of importance: coverage and benefits (26%); customer service (20%); provider choice (15%); cost (14%); information and communication (13%); and claims processing (13%).

Improving communications with enrollees is one of the greatest opportunities for health plans to improve member satisfaction. It’s the only factor in the study that has not seen a significant improvement in member satisfaction. Valerie Monet, director of the insurance practice at J.D. Power, said that many plans have multiple product design features and come with technical manuals that are 20 pages or longer. Expecting members to be experts on these services and benefits is a losing battle for the plan and the member. Members expect their plan to provide guidance, ranging from assistance in selecting a doctor to helping them understand prescription costs.

Forty-eight percent of members agree strongly that their health plan is a trusted partner in their health and wellness, which increases satisfaction by 166 points. Satisfaction is 136 points higher among the 89% of members who completely understand how to find a doctor under the plan. Satisfaction is 110 points higher among the 88% of members who say their doctor spends the right amount of time with them.

Members expect immediate attention or advice when they call their health plan provider. Forty-one percent of those who called their plan had to give the same information more than once to get their issue resolved. Only 35% of members said that customer service provided all of the information they needed on the costs of prescription medications. Ninety-one percent of customers who are delighted with their Medicare Advantage plan (satisfaction scores of 901 or higher), say they will definitely renew their policy, and 89% will definitely recommend their plan to family and friends. Loyalty drops to 71% and advocacy to 66% among members who are pleased with their plan (scores of 751-900). Plans garnered the following member-satisfaction scores:

  • Kaiser Permanente 851
  • Highmark 791
  • Humana 782
  • UnitedHealthcare 775
  • Cigna 774
  • Aetna 773
  • Anthem 765
  • Health Net 756
  • WellCare 742

In 2016, members reported an average increase of $117 in annual premiums to $1,497. They also have more out-of-pocket expenses. On average, member deductibles are $1,705 in 2016, a $310 jump from 2015. Satisfaction is 136 points higher when members completely understand their out-of-pocket costs. Monet said that members are more satisfied and see the value of their plan when they have a better understanding of how much they are paying and what the costs cover.” For more information visit http://www.jdpower.com/resource/us-medicare-advantage-study.

Health Insurers Increase Debt in Wake of the ACA

Since 2011, U.S. health insurers have nearly doubled their borrowing levels due to the Affordable Care Act (ACA), according to a report by A.M. Best. With traditional health insurance products, insurers receive full premium payment every month before paying any claims. But that’s not the case with exchange products. In the first few years of the exchanges, insurers relied heavily on risk-adjustment, reinsurance, and risk corridors. The timing of paying direct premium subsidies fluctuated significantly. So health insurers had to pay the claims because their liquidity was under pressure. They turned to borrowing to alleviate this pressure. A.M. Best has not seen any significant rating pressures due to borrowing. However, heavy reliance on borrowed funds could put pressure on ratings if it reduces financial flexibility or slows the growth of capital and surplus. However, financial institutions see the use of borrowed funds as favorable since many top borrowing insurers are very big, highly capitalized, and highly rated, according to the report. 

CBO updates ACA cost projections

Over the next 10 years, the Affordable Care Act will cost $1.34 trillion, according to the Congressional Budget Office, up 11% from projections a year ago, mostly because of higher-than-expected enrollment in Medicaid. The law gave 22 million people access to coverage they otherwise would not have had, the report found, and the cost of providing that coverage from 2016 to 2019 will be $465 billion, 25% less than projected when the law was passed. The New York Times (free-article access for SmartBrief readers) (3/24), San Francisco Chronicle (free content)/The Associated Press (3/24)

PBMs Say They Increase Competition and Reduce Rx Costs

Testifying before the House Committee on Oversight and Government Reform, Pharmaceutical Care Management Association (PCMA) president and CEO Mark Merritt outlined ways to increase competition and lower prescription drug costs. The Committee is examining methods and reasoning behind recent drug price increases at a hearing titled, Developments in the Prescription Drug Market.

PBMs administer prescription drug plans for more than 266 million Americans who have health insurance from a variety of sponsors including: commercial health plans, self-insured employer plans, union plans, Medicare Part D plans, the Federal Employees Health Benefits Program, state government employee plans, managed Medicaid plans, and others.

PBMs are projected to save employers, unions, government programs, and consumers $654 billion—up to 30%—on drug benefit costs over the next decade according to new research. PBMs reduce drug costs by doing the following:

  • Negotiating rebates from drug manufacturers.
  • Negotiating discounts from drugstores.
  • Offering more affordable pharmacy channels.
  • Encouraging use of generics and more affordable brand medications.
  • Managing high-cost specialty medications.
  • Reducing waste and improving adherence.

Merritt said, “There is a growing use of bait-and-switch copay assistance marketing programs that encourage patients to ignore generics and start on more expensive brand drugs.” Unlike programs for the poor and uninsured, copay offset programs are designed to encourage insured patients to bypass less expensive drugs for higher cost branded drugs. Such practices are considered illegal kickbacks in federal programs and have long been under scrutiny by the Health and Human Services Office of Inspector General (OIG).

PCMA outlined several potential solutions for high drug prices that policymakers could consider, including:

  • Accelerating FDA approvals of “me-too” brands against drugs that face no competition.
  • Accelerating FDA approvals of generics to compete with off-patent brands that face no competition.
  • Creating a government watch list of all the off-patent brands so potential acquirers are aware that policymakers can monitor these situations.
  • Making copay coupons an illegal kickback for all insurance that gets any federal subsidy.

More Companies Increased Contributions to Help Employees Pay Premiums

HelathCareMoney

Companies are more likely to have added or increased contributions to their employees’ premiums this year compared to the last two years, according to a study by the Transamerica Center for Health Studies (TCHS). The study of 1,500 employers was conducted by the Harris Poll from August 14 to September 3. Forty-four percent of companies expect their healthcare costs to increase in the next 24 to 36 months.

Most employers are trying to keep constant their contribution to employees’ premiums (57%), deductibles (60%), and co-pays/coinsurance (58%). Thirty percent want to maximize their contributions to employees’ premiums to help manage health insurance costs. TCHS Executive Director Hector De La Torre said, “The anticipated increase in healthcare costs correlates to improved quality for many employers.” Forty percent expect the quality of health insurance they offer employees to improve in the next 12 to 36 months while only 10% expect the quality to decline. Companies are most concerned about managing healthcare costs related to cancer (71%), drug expenses (69%), and diabetes and obesity (68%).

Sixty-one percent of employers offer wellness programs. Forty-nine percent of employers that have had a wellness program in the past 12 months say that saving money was the motivation. Eighty-two percent of companies say their wellness program improved workers’ health; 80% say it improved productivity and performance, and 71% say it reduced healthcare costs. De La Torre said, “Providing the best healthcare benefit package possible remains the top healthcare-related priority for employers. Interestingly, employers that offer healthcare benefits are more likely to anticipate profitability, hiring and wage increases in the next two years.”

The Medicare Advantage Market in 2016

A total of 2,174 Medicare Advantage (MA) plans are in the market lineup for 2016, an increase of 90 plans over 2015, according to a report by Mark Farrah Associates. Researchers looked at data from Centers for Medicare & Medicaid Services (CMS). The Medicare market continues to be a key target for health insurance business with more than 17.6 million beneficiaries enrolled in a Medicare Advantage plan and another 37 million eligible.

Many Medicare Advantage plans are designed to be marketed in targeted regions while others are approved to be offered nationwide. For 2016, HMOs continue to be the dominant plan type; comprising 67% of plan offerings. The number of distinct HMO plans will increase to 1,463 for 2016.

2016 Medicare Advantage Preview

MA Plan Type 2015 Plan Count 2016 Plan Count 2016 %
HMO 1,358 1463 67%
Local PPO 521 516 24%
Cost 86 81 4%
PFFS 69 63 3%
Regional PPO 43 47 2%
MSA 7 4 0%
Total 2,084 2,174 100%
Source: Mark Farrah Associates.

Open enrollment will begin on October 15, 2015, and competitors are gearing up to promote 2016 benefit plans. As Medicare companies finalize sales and marketing strategies, they look forward to the release of the Medicare Plan Finder data on or around October 1. The Plan Finder is an online tool that helps seniors shop select new Medicare plans. It is also a rich market analysis resource for the industry. Analysts within Medicare plans use the detailed benefit attributes including benefit copays and cost sharing, plan by plan, to assess competition and opportunity, county by county.

What You Need to Know for Medicare Fall Open Enrollment

Medicare’s Fall open enrollment occurs from October 15 to December 7, and is the time of year when people with Medicare can make unrestricted changes to their coverage. As we approach Fall open enrollment, the Medicare Rights Center offers the following important updates for 2016:

  • Part B Premiums May Increase for Some
    The standard Part B Premium is expected to remain stable for 70% of Medicare beneficiaries at $104.90 per month; it may increase to $159.30 per month for the remaining 30%. This group includes people who enroll in Medicare during 2016 and people who do not collect Social Security benefits. Also affected by this increase are beneficiaries who pay a higher, income-related premiums based on their income, according to the Medicare Trustees report. Final 2016 Part B premiums will be announced in the fall. People with Medicare should consider the final premium amounts as they make plan selections during open enrollment.
  • There Are More Four-Star and Five-Star Plans
    In 2015, 61% of Medicare Advantage plans are rated from four to five stars in Medicare’s Star Quality Rating. This is up from 52% in 2014 and 37% in 2013.

Medicaid Poses Increasing Risks to State Budgets

A rebound in healthcare spending and a shift in federal support will put more pressure on U.S. states’ long-term budgets, Fitch Ratings says. While state and local Medicaid spending growth will remain below historical levels, Fitch believes it will still outpace revenue growth, forcing states to make challenging budgetary decisions. Fitch expects most states to accelerate efforts to slow Medicaid spending and take other budgetary actions. If they do not, they face long-term budget imbalances.

The Centers for Medicare and Medicaid Services (CMS) expects state and local Medicaid spending growth to average 6.3% annually from 2014 to 2024. The increase is partially due to normalization after recession era rates bottomed at 5.2% in 2007, as well as the downshift in federal funding for the Medicaid expansion that will begin in 2016.

However, spending growth will remain below historical trends.  Fitch says that states have had some success in controlling growth in Medicaid spending, though the challenge remains substantial. Implementing managed care has been a key initiative for a number of states. From 2001 to 2013, Medicaid managed care spending increased at nearly double the rate of total Medicaid spending. Fitch says that the shift toward managed care is likely to continue.

Several states have reported net budgetary gains from ACA expansion that could offset those increased costs. CMS expects overall health spending growth to accelerate to 5.8% annually through 2024, up from 4% in 2007. The recession and its aftermath played a key role in suppressing costs in recent years.

Consumers See Massive Increase in Health Care Costs

While the U.S. government has become an even more dominant force in the nation’s health care system, individuals are taking on a greater share of the costs, according to the latest index byU.S. News & World Report. Though data from the Affordable Care Act are not measured in the first iteration of the index, the federal government’s expanded role is already apparent. Government-sponsored health care, including Medicare and Medicaid, have grown at a faster rate than private health insurance. The percentage of people under 65 with public health insurance coverage increased from 12.9% in 2000 to 23.8% in 2013. Private health insurance coverage decreased from 71.8% to 61% during the same period.

Americans have taken on a higher burden of health care costs, spending 1.7 times more out-of-pocket on health care by 2013. The average cost of deductibles more than doubled over a decade. The percentage of premiums paid by employees increased 4% for single and family plans. Meanwhile, there has been a 55% growth in consumers’ prescription drug  prices.
In 2012, the U.S. spent 17.9% of its GDP on health care, more than any other developed nation.

Eliminating Subsidies Would Increase the Number of Uninsured

Ending ACA subsidies would increase premium costs in the individual exchanges by as much as 43% and cause enrollment to drop 68%, according to a RAND study. The tax subsidies have been challenged, in federal courts across the country, on the grounds that the wording of the law only allows aid to people who buy policies through state-run exchanges. “If subsidies are eliminated entirely, our research predicts substantial disruption in the individual health insurance market,” said Christine Eibner of RAND.

Replacing subsidies with vouchers would make the health insurance exchanges more sensitive to changes in the age mix of those enrolling. For example, with vouchers instead of tax credits, each 1% reduction in young adult enrollment would trigger a premium increase of about three-quarters of 1% on the insurance exchanges. A 1% reduction in young adult enrollment would trigger less than one-half of 1% – with the ACA’s tax credit structure. For more information, visitwww.rand.org.

Last Updated 06/19/2019

Arch Apple Financial Services | Individual & Family Health Plans, Affordable Care California, Group Medical Insurance, California Health Insurance Exchange Marketplace, Medicare Supplements, HMO & PPO Health Care Plans, Long Term Care & Disability Insurance, Life Insurance, Dental Insurance, Vision Insurance, Employee Benefits, Affordable Care Act Assistance, Health Benefits Exchange, Buy Health Insurance, Health Care Reform Plans, Insurance Agency, Westminster, Costa Mesa, Huntington Beach, Fountain Valley, Irvine, Santa Ana, Tustin, Aliso Viejo, Laguna Hills, Laguna Beach, Laguna Woods, Long Beach, Orange, Tustin Foothills, Seal Beach, Anaheim, Newport Beach, Yorba Linda, Placentia, Brea, La Habra, Orange County CA

12312 Pentagon Street - Garden Grove, CA 92841-3327 - Tel: 714.638.0853 - 800.731.2590
Email:
Jay@ArchApple.com
Copyright @ 2015 - Website Design and Search Engine Optimization by Blitz Mogul