Overview

In an increasingly competitive Medicare Advantage (MA) marketplace,¹ supplemental benefits are one of the primary ways Medicare Advantage organizations (MAOs) can differentiate their plans from competitors’ plans. A supplemental benefit is an additional benefit MAOs cover for their beneficiaries, but which is not covered under traditional fee-for-service (FFS) Medicare. MAOs offer these benefits to attract Medicare-eligible individuals to their plans. Supplemental benefit coverage can either be mandatory, meaning all enrollees in a particular plan receive coverage, or optional, meaning all enrollees in a particular plan can elect to receive coverage for an additional premium.² Due to recent Centers for Medicare And Medicaid Services (CMS) demonstration programs and expansions in supplemental benefit flexibilities,^3,4,5 MAOs may also limit mandatory supplemental benefits to plan enrollees who meet certain conditions, such as having a diabetes diagnosis. These types of benefits are only offered to a specific subset of a plan’s population, and therefore are not part of this analysis. This analysis focuses on mandatory supplemental benefits offered by Dual Eligible Special Needs Plans (D-SNPs) from 2019 to 2023.

Supplemental benefits are particularly important for D-SNPs for a few key reasons:

• Cost sharing for dual-eligible individuals is generally covered by Medicaid, so lowering traditional Medicare-covered cost sharing does not have an impact on a dual-eligible individual’s out-of-pocket cost. Therefore, D-SNPs typically do not enhance Medicare-covered benefits.
• D-SNPs typically target a $0 premium after government premium subsidies, and there is minimal competition on premium for dual-eligible members.

Because D-SNPs typically do not attract beneficiaries by enhancing Medicare-covered benefits or reducing beneficiary premium, supplemental benefits are the key distinguishing plan design factor in the D-SNP market.

Analysis

We utilized publicly available data from CMS for this analysis. The 2019 through 2022 membership is based on February plan enrollment, and the 2023 membership is based on January 2023 enrollment.⁶ Benefit data for all years was summarized from the plan benefit packages (PBPs) published by CMS for each year.⁷ Additional benefits offered under Medicaid are not considered in this article. Supplemental benefits offered as part of nonuniform benefit packages—Value Based Insurance Design (VBID), Uniformity Flexibility (UF), and Special Supplemental Benefits for the Chronically Ill (SSBCI)—are not included in this analysis. Milliman has authored other papers discussing these benefits.^8,9 This analysis does not consider whether or not supplemental benefits were offered as part of a combined benefit package. Milliman has authored a separate paper on combined benefit packages in the MA market.¹⁰ Please note that the scales in the following figures do not always start at 0% to improve visualization of benefits with high prevalence.

Vision, hearing, and dental benefits are among the most common supplemental benefits historically offered by MA plans. Figure 1 shows the percentage of beneficiaries in D-SNPs from 2019 to 2023 with coverage for these benefits.

MAOs offered these benefits to a very high percentage of D-SNP beneficiaries from 2019 to 2023 with modest increases in coverage over the first four years. While the 2023 coverage percentages remained high, dental and hearing benefits saw small decreases in coverage from 2022 to 2023. Comprehensive dental and preventive dental coverage saw the biggest decrease, with coverage changing from 96% to 94% for comprehensive in 2023 and from 90% to 87% for preventive in 2023. Hearing exams and hearing hardware had a 1% decrease in coverage from 2022 to 2023.

Supplemental benefit prevalence varies significantly between national and regional MAOs. National players are defined as those that have more than 500,000 beneficiaries in total (including all enrollment types),¹¹ and regional players are the remainder. There was a large increase in 2020, slight growth from 2020 to 2022, and a small decrease in 2023 of preventive dental offerings driven by the national players, which now have 93% prevalence for preventive dental benefits in the D-SNP market in 2023. Regional players, on the other hand, saw a marked decrease in beneficiaries covered by this benefit in 2021, slight growth from 2021 to 2022, and a significant decrease in coverage from 77% in 2022 to 68% in 2023. The reduced prevalence of preventive dental coverage, along with the other common supplemental benefits that saw a decrease in 2023, is due to the prevalence of benefits offered by regional carriers. Figure 2 shows all common supplemental benefits are more prevalent in national carriers. Preventive dental is the largest difference between coverage.

MAOs can offer numerous additional supplemental benefits beyond vision, hearing, and dental. Figure 3 shows the percentage of beneficiaries in D-SNPs from 2019 to 2023 with coverage for other common supplemental benefits, including over the counter (OTC) benefit cards, transportation, podiatry services, meals (post-acute), and acupuncture.

Figure 3 shows OTC benefit cards decreased in prevalence for the past two years; the coverage percentage went from 99% to 85% from 2021 to 2023:

• This is driven by a change in how some D-SNPs are entering OTC benefit cards in their PBPs. An increasing number of plans are offering OTC benefit card coverage in a combined benefit structure, including a nonuniform benefit, such as a VBID, UF, or SSBCI package.¹³
• Nonuniform benefits are not included in this analysis and, as a result, benefit prevalence in Figure 3 appears to drop in recent years when reviewing this information in the context of uniformly offered OTC benefit cards.
• For D-SNP plans offering OTC benefit cards as a uniform benefit, the average monthly benefit increased from $84 to $129 from 2021 to 2023.

Additional takeaways from Figure 3 include:

• Fitness is the most prevalent benefit displayed in Figure 3, with 97% prevalence in 2023 and offered to nearly all D-SNP plans at $0 cost sharing.
• Transportation and podiatry services have seen modest gains from 2019 to 2023.
• Meal coverage has achieved steady gains in recent years and landed on 87% coverage in 2023.
• Acupuncture coverage has hovered around 50% prevalence, with an increase of over 10% from 2021 to 2022 due to a large carrier in the market adding acupuncture coverage to its plans.

Multiple supplemental benefits fall under the 14c “Other Defined Supplemental Benefits" category in the PBP. Fitness is by far the most common 14c benefit and is displayed in Figure 3 as a result. The most common other 14c benefits are health education, nutritional/dietary benefit, smoking cessation, and remote access technologies (RAT) – nursing hotline. These benefits have maintained their prevalence rate with little change over the last five years, with RAT – nursing hotline at 80% and the other three benefits around 20% to 30% in 2023.

Combined benefit structures give plans flexibility to combine multiple benefits under a single maximum plan benefit limit, a single visit limit, or varying allowances by benefit within the package. A combined limit across preventive and comprehensive dental is by far the most common combined benefit limit and has been offered with a high prevalence in the market for years. Non-dental-only combined benefits, such as a combined limit across dental, vision, and hearing, for example, have been increasing in market prevalence in recent years.¹⁴ Plans can also design their combined benefits to allow members to use the allowances on member cost sharing. This is similar to the reduction in cost-sharing (RICS) benefit, which is specifically a dollar allowance that beneficiaries can use to cover their cost sharing on benefits included in the RICS package. Figure 4 shows the change in prevalence for combined benefits and RICS benefits from 2022 to 2023. The combined benefit figures exclude dental-only combined benefit packages.

Figure 4 shows that combined benefits increased to 67% prevalence in 2023, while RICS prevalence fell to 10%. The reason for high growth in combined benefits and the decrease to RICS benefits may be that combined benefit packages can be used to cover member cost sharing, similar to RICS, while allowing greater flexibility than RICS benefits provide. In particular, for the D-SNP population, many of the benefits offered to these beneficiaries include no cost sharing, so a RICS benefit may be less attractive if they are not liable for cost sharing to begin with.

The definition of “primarily health-related benefits”¹⁵ was expanded starting in the 2019 bid cycle to cover services used to:

• Diagnose
• Compensate for physical impairments
• Ameliorate the functional/psychological impact of injuries or health conditions
• Reduce avoidable emergency and healthcare utilization

This includes adult day care, home-based palliative care, in-home support services, support for caregivers, and therapeutic massage (for pain management). The percentages of beneficiaries in D-SNPs with coverage for these expanded primarily health-related benefits in 2022 and 2023 are displayed in Figure 5.

While D-SNPs could provide a subset of these types of benefits prior to the expansion of primarily health-related supplemental benefits, D-SNP MAOs provide these services to a relatively low percentage of beneficiaries compared to the other supplemental benefits discussed above. Benefit prevalence is higher for D-SNPs than general enrollment plans for in-home support services by a significant margin, as well as therapeutic massage. From 2022 to 2023 in-home support services coverage increased from 20% to 32%, which was larger than the corresponding 5% increase for general enrollment plans.

Methodology

In performing this analysis, we relied on the 2023 Milliman MACVAT®. The Milliman MACVAT contains MA plan details and benefit offerings for 2019 through 2023. The Milliman MACVAT uses publicly available data released by CMS, which is then compiled, sorted, and summarized into a user-friendly format. We used the February membership from each applicable year (2019 through 2022) except 2023, for which we used the January 2023 enrollment. This analysis includes dual-eligible MA plans only.

Caveats and limitations

Jordan T. Laktas, Mary G. Yeh, and Julia M. Friedman are actuaries for Milliman, members of the American Academy of Actuaries, and meet the qualification standards of the Academy to render the actuarial opinion contained herein. To the best of our knowledge and belief, this information is complete and accurate and has been prepared in accordance with generally recognized and accepted actuarial principles and practices.

The material in this report represents the opinion of the authors and is not representative of the view of Milliman. As such, Milliman is not advocating for, or endorsing, any specific views contained in this report related to the Medicare Advantage program.

This report is intended to summarize supplemental benefits offered by MA plans from 2019 through 2023. This information may not be appropriate, and should not be used, for other purposes. We do not intend this information to benefit, and assume no duty of liability to, any third party that receives this work product. Any third-party recipient of this report that desires professional guidance should not rely upon Milliman’s work product but should engage qualified professionals for advice appropriate to its specific needs.

The credibility of certain comparisons provided in this report may be limited, particularly where the number of plans in certain groupings is low. Some metrics may also be distorted by benefit changes in a few plans with particularly high enrollment.

In preparing our analysis, we relied upon public information from CMS, which we accepted without audit. However, we did review it for general reasonableness. If this information is inaccurate or incomplete, conclusions drawn from it may change.

¹ Friedman, J.M., Swanson, B.L., Yeh, M.G., & Cates, J. (February 2020). State of the 2020 Medicare Advantage Industry: As Strong as Ever. Milliman Research Report. Retrieved March 17, 2023, from https://www.milliman.com/en/insight/state-of-the-2020--medicare-advantage-industry-as-strong-as-ever.

² CMS (April 22, 2016). Medicare Managed Care Manual: Chapter 4: Benefits and Beneficiary Protections. Retrieved March 17, 2023, from https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/mc86c04.pdf.

³ CMS. Medicare Advantage Value-Based Insurance Design Model. Retrieved March 17, 2023, from https://innovation.cms.gov/innovation-models/vbid.

⁴ CMS (April 27, 2018). HPMS Memo. Retrieved March 17, 2023, from https://www.cms.gov/Research-Statistics-Data-and-Systems/Computer-Data-and-Systems/HPMS/HPMS-Memos-Archive-Weekly-Items/SysHPMS-Memo-2018-Week4-Apr-23-27.

⁵ CMS (April 24, 2019). Implementing Supplemental Benefits for Chronically Ill Enrollees. Retrieved March 17, 2023, from https://www.cms.gov/Medicare/Health-Plans/HealthPlansGenInfo/Downloads/Supplemental_Benefits_Chronically_Ill_HPMS_042419.pdf.

⁶ CMS. Monthly Enrollment by Contract/Plan/State/County. Retrieved March 17, 2023, from https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MCRAdvPartDEnrolData/Monthly-Enrollment-by-Contract-Plan-State-County.

⁷ CMS. Benefits Data. Retrieved March 17, 2023, from https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MCRAdvPartDEnrolData/Benefits-Data.

⁸ Murphy-Barron, C., Buzby E., & Pittinger, S. (March 21, 2022). Overview of Medicare Advantage supplemental healthcare benefits and review of Contract Year 2022 offerings. Retrieved on March 20, 2023 from https://www.milliman.com/en/insight/overview-of-ma-supplemental-healthcare-benefits-review-2022-offerings.

⁹ Murphy-Barron, C., Pelizzari, P.M., & Regan, B. (February 2019). The Medicare Advantage Value-Based Insurance Design Model: Overview and Considerations. Retrieved March 17, 2023, from https://www.milliman.com/en/insight/the-medicare-advantage-value-based-insurance-design-model-overview-and-considerations.

¹⁰ Friedman, J.M., Yeh, M.G., & Yen, I. (January 2023). 2023 Combined Benefits in Medicare Advantage – Tracking Benefit Strategy and Options. Retrieved March 17, 2023, from https://www.milliman.com/en/insight/2023-combined-benefits-in-medicare-advantage-tracking-benefit-strategy.

¹¹ Anthem, Centene Corporation, CIGNA, CVS Health Corporation, Humana, Kaiser Foundation Health Plan, and UnitedHealth Group are national players for this analysis due to their total enrollment counts.

¹² Note: The OTC benefit card prevalence is driven by a change in how some D-SNPs are entering OTC benefit cards in their PBPs as a combined benefit, including a nonuniform benefit, which impacts the results shown in Figure 3.

¹³ Friedman, J.M., Yeh, M.G., & Yen, I. (January 2023), op cit.

¹⁴ Ibid.

¹⁵ CMS (April 2, 2018). Announcement of Calendar Year (CY) 2019 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies and Final Call Letter. Retrieved March 17, 2023, from https://www.cms.gov/MEDICARE/HEALTH-PLANS/MEDICAREADVTGSPECRATESTATS/DOWNLOADS/ANNOUNCEMENT2019.PDF.