From Healthcare to Aging Care: How Medicare is Being Transformed

The State of Supplemental Benefits in 2023

A Bit of History

When the CHRONIC Care Act passed in 2018, it barely received notice. But buried within it was one of the most important changes to Medicare since Lyndon B. Johnson created the program: authorization of Special Supplemental Benefits for the Chronically Ill (SSBCI). With SSBCI, for the first time Medicare Advantage (MA) plans could not only pay to treat chronic disease, they could pay for things like rides, food, and home modifications that help prevent poor health outcomes. 

That might seem like a small thing. But with the American population rapidly aging — by 2040 more than 80 million Americans will be older than 65 — and with 95% of Medicare beneficiaries having a chronic disease, SSBCI opened up billions in federal funding to help individuals with unmet aging needs. In so doing, SSBCI shifted Medicare Advantage from being a program primarily focused on healthcare for aging to a program focused on healthy aging holistically.

Fast Forward > Today

Today, plans and beneficiaries are rallying around these expanded benefits. More than half of all Medicare beneficiaries - 31M individuals - are now enrolled in Medicare Advantage plans, and 99% of these plans offer supplemental benefits for categories like healthy groceries, meals and home modification. In 2022, 21% of MA plans offered SSBCI and beneficiaries took notice: research shows that after price and provider access, supplemental benefits are the top factor beneficiaries choose plans based on. (With many plans now offering zero dollar premiums and PPO networks, this means that supplemental benefits are the top factor). And health plans report that use of supplemental benefits is one of the top predictors of member retention, satisfaction and CAHPS ratings. 

At least 51% of older adults have at least one unaddressed aging need that negatively impacts their health and wellbeing, and these aging needs are correlated with poor health choices, with more than 50% of older adults not seeking appropriate preventive care services like annual wellness visits (AWVs) or cancer screenings. But for most members, supplemental benefits are too hard to access and use. It’s not uncommon for members with complex aging needs to be unaware of relevant benefits or to not know how to navigate a benefit program’s onboarding or qualification process. This helps explain why, at many plans, fewer than 3% of those eligible use their transportation benefit, yet 32% of older adults lack access to good transportation. The same pattern plays out across food, durable medical equipment (DME), dental, hearing and more. Historically, plans could accept this poor performance. But in a world with CAHPS driving 33% of Stars bonuses and members are increasingly choosing plans based on supplementary benefit quality, barriers to access are no longer something plans can afford.

Opportunity Abounds

In recent years, the Medicare Advantage sector has leaned heavily into prioritizing programs, benefits, and partners offering a quantifiable impact on Star ratings. While Star ratings are critically important, any impact from a Stars-related investment won’t be realized until 1-2 years time - at the earliest - given the nature of rescoring. 

But health plan leaders need to be delivering results now. As competition within the MA space continues to increase, there is a much more present and pressing opportunity: driving member retention and AWV completion in this calendar year. Members are more likely to complete high value action like their AWV if barriers to care have been addressed. 

According to a 2022 McKinsey & Company survey of Medicare Advantage members about their plan onboarding experience, only 19% of members were asked to provide any information or complete a health assessment beyond basic plan demographics. Only 5% reported that they were asked about social needs, and less than 10% said that their plan helped them enroll in additional benefits. But nearly 50% of the same surveyed members reported a high level of interest in learning about new benefits and programs and 43% expressed interest in signing up for rewards programs. 

This means plans looking to maximizing their return on investment for expanded supplemental benefits offerings and drive gap closures need to:

• Target benefits to the right members at the right time
• Link those benefits to quality initiatives and preventive care
• Close the “last mile” gap to help members actually accomplish the desired task
• Coordinate with caregivers and primary care providers
• Engage non/under-engaged members

Underperformance on any of these fronts leads to worse outcomes, lower quality of care, higher churn, lost revenue, and poor member experience. For Medicare Advantage to live up to its promise as a healthy aging program, the gap between member interest in supplemental and SSBCI benefits and actual adoption needs to close - rapidly.