Medicare Advantage carriers are designing plans for underserved populations that address specific healthcare needs while also finding a way to differentiate their business from competitors.
Tailoring Medicare Advantage plans for specific populations is an emerging trend that could become part of these companies' long-term strategies and prompt other industry players to follow suit.
SCAN Health Plan for the first time will offer a women-specific product in partnership with Los Angeles-based Cedars-Sinai in 2024. And the nonprofit insurer is again offering its LGBTQ+ plan in partnership with Included Health, which combines virtual care, navigation and community-based services. Tech-enabled health insurance startup Alignment Health is again offering its tailored plans for the Asian American and Hispanic communities. Clever Care Health Plan, a Medicare Advantage plan company that incorporates Western and Eastern medicine, continues to offer plans for Asian Americans.
These insurers are hoping to lead the way in tailoring benefit designs, including supplemental benefits, to address specific population needs.
“Diversity is really something that should not just be reflected in your employee population and your membership population, but it also should be reflected in your product design and implementation,” said SCAN CEO Dr. Sachin Jain.
Members of SCAN’s women’s plan, called SCAN Inspired, will have access to benefits including $0 estrogen therapy, weight-management program reimbursement and access to fitness studios and virtual workout classes designed for women. SCAN Affirm, the company’s LGBTQ+ plan, offers members access to drugs more commonly used by the transgender community at a preferred price tier and care navigation to providers that focus on this population.
Customizing offerings toward people of specific ethnicities, sexual orientations and gender identities could be one way to capture more members, especially as enrollment in Medicare Advantage is expected to continue growing in 2024 and will account for half of all people enrolled in Medicare, the Centers for Medicare and Medicaid Services projects.
In addition, data show minority populations tend to favor Medicare Advantage plans. Nearly 30% of Medicare Advantage beneficiaries are Black, Latino and Asian, compared with 17% in fee-for-service Medicare, according to a report by healthcare consulting firm ATI Advisory. Black and Latino adults also have higher enrollment rates in Medicare Advantage than the traditional program.
“We want to make sure that we're serving as many backgrounds and cultures across the spectrum so that there is diversity and flexibility around ... the products that they're choosing,” said Dawn Maroney, CEO of Alignment Health Plan and president of markets for Alignment Health. “Of course, they will have the option to enroll in any plan, but this gives them that special touch with customization around it.”
Better Medicare Alliance, a nonprofit coalition of health systems, health insurers and advocacy organizations, supports this emerging trend and points to the benefits of receiving care from culturally competent providers.
“There's a comfort and a trust level that gets developed in building a plan that addresses specific populations, allowing for their unique needs to be being monitored and addressed," said Susan Reilly, a spokesperson for the alliance. "Particularly for communities that experience language barriers, it’s extremely beneficial to have access to clinicians and administrative employees who speak your language.”
While it's early, reaction to this trend has been mixed from those working at these companies, the provider networks and the academic community. Jain has specifically seen pushback related to its LGBTQ+ plan.
“We have one provider group that was a longstanding partner that decided they didn't want to participate with us. We've had employees who've been unhappy that we've gone this direction, but we are proceeding forward because we know it's the right thing to do for the older adult population,” he said.
While experts agree it is good to see carriers cognizant of certain populations that may be underserved by traditional insurance plans, some are concerned about the financial motivation from insurers offering these products.
It could be that carriers think they will get paid more from Medicare per member per month for these enrollees than they will actually cost, said Mark Meiselbach, a professor in the health policy and management department at the Johns Hopkins University Bloomberg School of Public Health.
“On average, Hispanic beneficiaries cost less on average in healthcare costs than white beneficiaries, so it could be that they think that this might be one way to sort of beat the risk adjustment,” Meiselbach said.
These specialized plans could also have adverse effects on the beneficiaries they serve, experts said. Some beneficiaries may be tempted to enroll in a plan that caters to their ethnicity, sexual orientation or gender identity, but selecting the most appropriate plan is multi-faceted.
“The concern I have is that someone is overly swayed by this and doesn't look at, for example, the drugs that are included with the Part D plan aspect of their Medicare Advantage plan," said Mireille Jacobson, a health economist at the University of Southern California’s Schaeffer Center for Health Policy and Economics and an associate professor in the USC Leonard Davis School of Gerontology. "That's something they face monthly, and they kind of choose a sub-optimal plan in terms of what drugs are covered or how much out-of-pocket costs they'll face.”
Another concern is that carriers will prioritize certain provider characteristics over others when developing a provider network. For example, prioritizing a provider’s language over whether they are board-certified could be at the cost of the overall quality of the provider, said Dr. Jose Figueroa, an assistant professor of health policy and management at the Harvard T.H. Chan School of Public Health.
“Is the motivation for the quick buck and getting as many people as possible? Or is it really to take care of the people? My concern is that, as they're building out these networks, are they prioritizing things that seem attractive to patients at the cost of quality of care. That is something that we'll have to follow and make sure that that doesn't happen,” Figueroa said.
Medicare Advantage organizations have also come under scrutiny for denying millions of requests for care annually, including those for medically necessary care, according to a Health and Human Services Department’s Office of Inspector General report published in April 2022. Health insurance companies marketing Medicare Advantage plans for diverse populations could mean patients, who have historically faced barriers within healthcare, having to deal with prior authorizations and higher rates of denials compared with traditional Medicare, Figueroa said.
Experts are hoping to see more research on how these tailored plans affect patient health outcomes and access to care, but executives at SCAN and Alignment Health said they believe this is an effective business strategy that will lead to better health outcomes.
“We’re frankly hoping to inspire the broader industry to think differently about the older adult population and start to think about it in terms of segments and offer specific services,” Jain said.