Medicare Advantage insurers are pushing into new territories and introducing new benefits in 2021, as they try to attract more members in the rapidly growing, lucrative market.
UnitedHealthcare on Thursday laid out plans to sell coverage in nearly 300 new counties, including four new states, marking its biggest geographic expansion in five years that enables it to reach an additional 3.2 million people eligible for Medicare. Cigna Corp. announced its largest expansion to date, which will see it enter 67 new counties.
National insurers Aetna and Humana also announced plans to reach more seniors, while newcomers are throwing their hats in the ring. Walmart is pairing up with startup Clover Health to offer co-branded Advantage plans in eight Georgia counties.
Most big insurers also unveiled new benefits, including broader access to telehealth for more types of services in a nod to how the COVID-19 pandemic has changed to way patients interact with their doctors. UnitedHealthcare, for instance, is giving all Advantage members who aren't in special needs plans access to virtual behavioral health visits without a copay. Most of the company's Medicare members already had access to no-cost virtual visits for general medicine.
"We had a percentage of members in 2020 that had access to virtual behavioral benefits, but given the acceleration of the pandemic, we realized the importance of offering it more broadly," said Steve Warner, the insurer's senior vice president of Medicare Advantage.
For years, Medicare Advantage has been the hottest market in health insurance. The business has grown faster than any other corner of the sector, as baby boomers become eligible for Medicare at fast clip. Seniors are increasingly choosing the privatized version of original Medicare, because they are used to having managed care through their jobs.
Medicare Advantage must offer all the benefits included in traditional Medicare, but can offer extra benefits as well, such as dental and vision coverage. The Trump administration in recent years has extended more flexibility to Advantage plans to offer benefits that address patient's social needs and that go beyond medical care, such as home-delivered meals and transportation.
The federal government said last week that it expects Medicare Advantage enrollment to grow about 10% in 2021 to 26.9 million, which means that four in 10 Medicare beneficiaries would have coverage from an Advantage insurer. A decade ago, only a quarter of Medicare members, or about 11 million, had Medicare Advantage.
Margins on Medicare Advantage plans typically run at about 4% to 5%, while Medicaid margins are lower at 2% to 3%. Group employer business generally comes with high margins, but that segment of the industry isn't growing much. The number of people under age 65 with job-based coverage was about 156 million in 2018, the same as it was in 1998, according to the Peterson-KFF Health System Tracker.
According to CMS, Advantage members will have more plan choices next year. There will be 4,800 plans in the Medicare Advantage market, with an average of 47 plans per county, up from 39 plans this year. People with end-stage kidney disease will also be able to enroll in the program for the first time in 2021.
UnitedHealthcare will start offering Advantage coverage in Delaware, Michigan, Mississippi and Montana and will offer more than 100 new plans in new and existing markets. Warner said many of the new plans have $0 premiums and are local preferred provider organization plans, a growing area of the Advantage market.
In addition the new markets Cigna is entering in Ohio, Virginia, Oklahoma, Utah and New Mexico, the insurer said it is also expand PPO plans in 154 counties within its existing footprint. PPOs offer an out-of-network benefit while health maintenance organizations normally do not.
Humana said it will offer HMOs in 125 new counties and introduce local PPO plans in 98 new counties, helping it reach an additional 3 million people eligible for Medicare. Aetna is pushing into 115 new counties across the country to reach an additional 1.9 million people eligible for Medicare.
Most large insurers are offering more telehealth benefits. Healthcare practitioners and patients across the country turned to virtual care during the coronavirus crisis when hospitals and medical practices postponed non-urgent care. CMS said more than 94% of Advantage plans will offer additional telehealth benefits next year, up from 58% of plans in 2020.
Humana said all of its Medicare Advantage customers will be able to use telehealth for primary care, urgent care, and outpatient behavioral health without paying a copay. Cigna said it is providing no-cost behavioral health visits to all members, and is adding virtual physical therapy as a covered benefit in its plans.
Insurers are also broadening access to benefits that help with non-clinical needs. Cigna, Humana and UnitedHealthcare are all making it easier for certain members to buy healthy foods with monthly allowances. Open enrollment for Medicare begins Oct. 15 and lasts through Dec. 7.
