A ARP PUBLIC POLICY INSTITUTE DECEMBER 2018 Insight on the Issues Supplemental Benefits under Medicare Advantage– Part 1: An In-Depth Look at What They Are Today Claire Noel-Miller and Jane Sung AARP Public Policy Institute INTRODUCTION Medicare and Medicaid Services (CMS)8 and enacted Medicare beneficiaries have a choice of traditional by the Bipartisan Budget Act of 20189 earlier this year. Medicare1 or private Medicare Advantage2 This Insight on the Issues is the first of two reports (MA) plans.3 In 2017, the number of Medicare that examine MA’s supplemental benefits. In this beneficiaries enrolled in MA plans reached paper, we set the stage to discuss the impact of 19 million, 4 or about one in three people with impending changes to MA supplemental benefits Medicare nationwide. With a steadily increasing by explaining how supplemental benefits have share of Medicare’s population opting for MA worked in recent years. In doing so, we present new and growth projected to continue,5 MA’s already data on the supplemental benefits that MA plans important role within the Medicare program will offer. In a forthcoming Insight on the Issues, we will only increase in coming years. detail upcoming changes to the rules that govern Medicare Advantage, otherwise known as Medicare supplemental benefits, discuss possible implications Part C, must cover all the benefits that traditional for MA enrollees, and propose policy options to Medicare covers under its hospital insurance ensure strong consumer protections as MA plans (Part A) and medical insurance (Part B).6 However, implement these changes. MA plans can also offer additional benefits outside those covered in traditional Medicare. Collectively SUPPLEMENTAL BENEFITS DEFINED known as supplemental benefits, these extra services Each year MA insurers decide which, if any, have commonly included benefits such as dental, supplemental benefits they will include in their vision, and hearing. Supplemental benefits are a key health plans. For CMS to approve supplemental difference between MA and traditional Medicare,7 benefits in plan years 2018 and earlier, benefits had and their availability may be one important reason to meet certain requirements:10 why some beneficiaries opt for MA. Not already covered by traditional Medicare— Starting in 2019, there will be significant changes Supplemental benefits commonly include services to MA supplemental benefits, with important that traditional Medicare does not cover at all. consequences for consumers. These changes will For example, traditional Medicare does not cover implement new policies established by the Centers for preventive vision benefits, but MA plans may offer A ARP PUBLIC POLICY INSTITUTE DECEMBER 2018 them as supplemental benefits. In other cases, plan’s basic benefit package and cover every person supplemental benefits extend traditional Medicare’s enrolled in the plan,18 or they can offer it to all benefits. For example, traditional Medicare covers enrollees as a separate optional policy19 (i.e., an a limited number of visits for smoking cessation insurance policy rider). counseling, but MA plans may cover more Those two means of offering supplemental counseling sessions than traditional Medicare as benefits are significant because they each have a supplemental benefits. Supplemental benefits can different funding mechanism. Insurers can pay for also extend coverage of certain services included in supplemental benefits that are part of the MA plan’s traditional Medicare to people who do not qualify under traditional Medicare’s rules.11 basic benefit package by charging all enrollees a plan premium and/or cost sharing. Insurers can Primarily health-related—Prior to 2019, CMS also pay for these types of benefits (fully or in part) had interpreted the requirement that supplemental through the plan’s rebate dollars20 —a payment21 benefits be “primarily health-related” relatively that MA plans receive when their bid to provide narrowly, to mean that the benefit’s primary purpose Part A and Part B benefits22 is lower than what CMS must be to “prevent, cure or diminish an illness or estimates it would be under traditional Medicare injury.”12 (This definition will change beginning in (known as the benchmark23). In contrast, insurers plan year 2019. We will examine this change and its can finance optional supplemental benefits only implications in a companion Insight on the Issues.) through a “rider premium” and/or cost sharing paid Uniformity and Nondiscrimination—In offering only by enrollees who elect the optional benefit. supplemental benefits, insurers must also meet Rider premiums and cost sharing could be in uniformity and nondiscrimination requirements.13 addition to any plan premium and/or cost sharing. Prior to 2019, the uniformity rule required that MA plans cover the same supplemental benefits SUPPLEMENTAL BENEFITS: ANALYSIS OF SCOPE, for all enrollees in a service area14 and charge the AVAILABILITY, AND PREMIUMS same premium and cost sharing to all enrollees.15 Having a clear understanding of how MA’s In addition, MA plans have not been allowed to supplemental benefits have worked so far is crucial vary benefits based on factors such as a person’s as insurers start to implement new policies for next health, preexisting condition, age, race/ethnicity, year. To further that understanding, we conducted or disability. However, these requirements are an in-depth examination of MA plans’ supplemental changing starting in 2019. benefits and the premiums enrollees pay for them. Benefits not allowed—Under CMS’s pre-2019 Our analysis is based on 2017 MA plan data (see interpretation of “primarily health-related,” benefits appendix for Methods) that have information on intended for daily maintenance or comfort do not each MA plan’s supplemental benefits, enrollment qualify as supplemental benefits. As such, benefits numbers, service area, and plan premiums.24 like maid services, smoke detectors, or massages have This gives us insights into how MA plans offered not been allowed as supplemental benefits.16 CMS has supplemental benefits and the extent to which also ruled out supplemental benefits that cover long- consumers enrolled in plans with supplemental term services and supports such as in-home assistance benefits prior to 2019. and services to a person other than the enrollee, Our top-level findings are the following: including caregivers.17 New rules for plan years 2019 and beyond will change the scope of benefits that • MA plans can offer a broad scope of insurers are allowed to offer as supplemental benefits. supplemental benefits. HOW MEDICARE ADVANTAGE PLANS FINANCE • There is wide variation in MA plans’ offering of each supplemental benefit. SUPPLEMENTAL BENEFITS MA insurers can offer each supplemental benefit • MA plans’ supplemental benefits offerings vary in one of two ways: they can include it in the widely by geographic location. 2 A ARP PUBLIC POLICY INSTITUTE DECEMBER 2018 • In most cases, MA plans with supplemental Wide variation exists in MA plans’ offering of each benefits are less likely to charge a plan premium supplemental benefit than plans without such benefits. MA plans vary in which supplemental benefits they offer. Consequently, MA enrollees may or may Following is a look at those findings in greater depth. not have access to a given supplemental benefit, MA plans can offer a broad scope of supplemental depending on the plan they select. benefits A relatively large share of MA enrollees were in Insurers can include a variety of supplemental plans with supplemental benefits (table 2). For benefits in their MA plans. People are commonly example, about 80 percent of MA enrollees were aware that MA plans can cover supplemental in a plan that included some vision or preventive benefits such as dental, vision, and hearing benefits. health coverage; more than 60 percent of MA However, under pre-2019 rules, MA plans could enrollees were in a plan with some dental or offer many more types of supplemental benefits (see hearing benefits. table 1 for a full list). Across the nation, the vast majority of MA plans Dental, vision, and hearing include supplemental benefits (table 2). More than 8 MA plans can include a variety of benefits in out of 10 plans offer some type of vision benefits and their dental, vision, and hearing coverage. For about 7 out of 10 plans have some dental or hearing example, dental benefits can range from limited coverage. Other categories of supplemental benefits are also common: 86 percent of plans have some coverage for preventive care (e.g., dental x-ray, form of preventive care benefit and 86 percent have oral exam, cleaning) to comprehensive coverage auxiliary benefits. The least common category of for treatments that maintain or restore dental supplemental benefit in MA plans is clinical services: health (e.g., diagnosis, treatment for missing teeth 42 percent of plans offer that type of benefit. or prosthodontics, treatment for gum diseases, periodontics). Supplemental vision benefits can The five specific supplemental benefits that insurers include a basic eye exam or they can also cover were most likely to include in their MA plans are eyewear (e.g., contact lenses, eyeglass frames, eye exams (83 percent), emergency coverage abroad eyeglass lenses). Similarly, hearing benefits range (77 percent), gym membership (75 percent), remote from a hearing exam (routine exam or evaluation access technology34 (70 percent), and oral (dental) for a hearing aid) to coverage for hearing aids. exams (67 percent). At the other extreme, MA plans were very unlikely to offer supplemental benefits Preventive care, clinical services, and auxiliary services such as personal emergency response systems In addition to dental, vision, and hearing benefits, (1 percent), alternative therapies35 (2 percent), MA plans can offer supplemental benefits under bathroom safety devices (2 percent), or in-home three other broad categories: preventive health care medication reconciliation following a hospital stay benefits, clinical services, and auxiliary services. (3 percent). See appendix table A1 for prevalence The preventive health category has the largest figures on all MA supplemental benefits. number of benefits, and includes fitness benefits.25 MA plans’ supplemental benefits offerings vary Under certain circumstances, MA plans can offer widely by geographic location other preventive health benefits such as nutrition Taken together, plan-to-plan differences in counseling,26 bathroom safety devices,27 or personal supplemental benefit offerings result in important emergency response systems.28 Clinical services are geographic disparities in the share of MA plans supplemental benefits that cover chiropractic care,29 with supplemental benefits. For example, there foot care, acupuncture,30 and other alternative are significant differences by state in MA plans’ therapies.31 Finally, MA plans can cover auxiliary offering of dental benefits—with the percentage services such as emergency coverage abroad, of MA plans offering any benefits in this category meals,32 and nonemergency transportation.33 ranging from 79 percent in Florida to 33 percent in 3 TABLE 1 Supplemental Benefits in Medicare Advantage Plans, 2017 Dental Vision Hearing Clinical Preventive Health Auxiliary Preventive Eye exam Hearing aids • Chiropractic • Health education • Emergency maintenance coverage abroad • Dental x-ray Eyewear Hearing exam care Routine • Nutrition counseling • Oral exam foot care • Enhanced smoking • Nonemergency • Upgrades • Fitting and cessation counseling transportation • Dental cleaning evaluation for • Acupuncture (prophylaxis) • Contact lenses hearing aid Gym membership • Meals • Glasses: lenses • Other alternative • Enhanced disease therapies • Wigs for hair • Fluoride and frames • Routine hearing • loss related to exam management Comprehensive • Glasses: lenses • Residential chemotherapy Prosthodontics, only substance abuse • Telemonitoring • Over-the- • treatment A ARP PUBLIC POLICY INSTITUTE maxillofacial • Glasses: frames • Remote access counter drugs/ surgery only technology1 items • Non-routine • Bathroom safety services devices • Counseling services 4 • Diagnostic services • In-home safety assessments • Restorative services • Personal emergency response systems • Endodontics, periodontics, • Medical nutrition extractions therapy • Post-discharge in- home medication reconciliation • Weight management program • Annual physical exam • Enhanced screening EKG2 Source: AARP Public Policy Institute analysis of the 2017 “Plan Benefit Package” file. 1 Web-/phone-based or nursing hotline. 2 EKG = electrocardiogram DECEMBER 2018 A ARP PUBLIC POLICY INSTITUTE DECEMBER 2018 TABLE 2 Prevalence of Medicare Advantage Supplemental Benefits, 2017 Plans Beneficiaries Benefit Type % offering % in plans offering Dental 68 62 Preventive dental 67 61 Comprehensive dental 47 45 Vision 84 79 Eyewear 67 61 Eye exam 83 78 Hearing 68 66 Hearing exam 67 65 Hearing aids 55 57 Clinical services 42 45 Preventive health 86 78 Auxiliary 86 80 10 Most Common Benefits1 Eye exam 83 78 Emergency coverage abroad 77 76 Gym membership 75 69 Remote access technology2 70 68 Oral exam 67 61 Dental cleaning (prophylaxis) 67 61 Routine hearing exam 67 64 Annual physical exam 65 64 Dental x-ray 63 58 Contact lenses 63 58 10 Least Common Benefits1 Residential substance abuse treatment 1 4 Personal emergency response systems 1 1 Alternative therapies3 2 2 Bathroom safety devices 2 2 Post-discharge in-home medication reconciliation 3 2 In-home safety assessments 3 2 Weight management program 4 3 Wigs for hair loss related to chemotherapy 4 3 Medical nutrition therapy 5 4 Telemonitoring 6 4 Source: AARP Public Policy Institute analysis of the December 2017 MA/Part D Contract and Enrollment “Monthly Enrollment by Plan” file and of the 2017 “Plan Benefit Package” file. See table 1 for a list of individual benefits included in each benefit type. 1 Based on percentage of plans offering. 2 Web-/phone-based or nursing hotline. 3 Other than chiropractic care, foot care, and acupuncture. 5 A ARP PUBLIC POLICY INSTITUTE DECEMBER 2018 New Hampshire (figure 1). We found similarly large variations DETAILS ON TESTING WHETHER REBATE DOLLARS in the share of MA plans offering EXPLAIN GEOGRAPHIC VARIATIONS IN other types of benefits. SUPPLEMENTAL BENEFITS OFFERINGS It is not clear why such large Health care costs have been linked to MA plans’ cost-efficiency geographic differences exist. One relative to traditional Medicare37,38 —and, consequently, also to the hypothesis is that they might rebate dollars each plan is generally able to receive. Specifically, partly reflect disparities in the in high-cost areas, MA plans are often able to bid lower relative rebate dollars that plans receive to CMS’ benchmark than plans in low-cost areas. This gives plans across the nation36—as rebates are sold in high-cost areas an advantage in obtaining rebate dollars to a key source of financing for MA pay for supplemental benefits. Therefore, our hypothesis would supplemental benefits. We did predict that plans sold in high-cost areas offer more generous not have access to information on supplemental benefit packages than those sold in low-cost areas. the amount of each plan’s rebate To test this hypothesis, we ranked all US counties according to for the 2017 plan year. However, their traditional Medicare spending per beneficiary, from high to we were able to test this idea by low. We defined the top-ranked 10 percent of counties as high using high health care costs in a health care cost counties and the bottom-ranked 10 percent plan’s service area as a proxy for of counties as low-cost counties. We then compared the relatively large rebate payments supplemental benefit packages of plans in the top 10 percent (see box for details). ranking to those in the bottom 10 percent ranking. FIGURE 1 Percentage of Medicare Advantage Plans Offering Some Dental Benefits, 2017 Source: AARP Public Policy Institute analysis of the December 2017 MA/Part D Contract and Enrollment “Monthly Enrollment by Plan” and “Monthly Enrollment by Contract/Plan/State/County” files and of the 2017 “Plan Benefit Package” file. We excluded the following states due to missing data: Alaska, Vermont, and Wyoming. Hawaii not shown; 36 percent of MA plans offered some dental benefits in Hawaii. 6 A ARP PUBLIC POLICY INSTITUTE DECEMBER 2018 We found only partial support for the idea that preventive health (–1 percentage point) in high-cost differences in MA plans’ rebate dollars drive counties. More research is needed to fully understand geographic variations in plans’ benefits offerings the drivers behind geographic variations in plans’ (figure 2). On the one hand, MA plans sold in choice of supplemental benefits offerings. high-cost counties were more likely to offer certain In most cases, MA plans with supplemental supplemental benefits than plans sold in low- benefits are less likely to charge a plan premium cost counties, including preventive dental care In addition to financing supplemental benefits (+10 percentage points), comprehensive dental care through rebate dollars, MA plans can also charge (+6 percentage points), eyewear (+5 percentage beneficiaries a premium. We examined premium points), and eye exams (+5 percentage points). data to evaluate the extent to which plans are However, MA plans were also less likely to cover charging premiums for supplemental benefits rather clinical services (–21 percentage points) and than relying on their rebate payments. FIGURE 2 Supplemental Benefits Offerings for Medicare Advantage Plans Sold in High and Low Health Care Cost Counties, 2017 High-cost counties Low-cost counties Dental 70% 61% Preventive dental 70% 60% Comprehensive dental 49% 44% Vision 84% 81% Eyewear 66% 61% Eye exam 84% 79% Hearing 63% 63% Hearing exam 62% 61% Hearing aids 53% 48% Clinical services 24% 45% Preventive health 83% 84% Auxiliary 86% 84% % of plans offering Source: AARP Public Policy Institute analysis of the December 2017 MA/Part D Contract and Enrollment “Monthly Enrollment by Plan” and “Monthly Enrollment by Contract/Plan/State/County” files, of the 2017 “Plan Benefit Package” file, and of the “Medicare Geographic Variation Public Use File—State/County Table” (2016). See table 1 for a list of individual benefits included in each benefit type. 7 A ARP PUBLIC POLICY INSTITUTE DECEMBER 2018 In 2017, about half of all MA enrollees were in example, only 3 percent of plans with some vision a plan that charged a plan premium ($36 per coverage and 2 percent of plans with some hearing month, on average) in addition to Medicare’s coverage included these types of supplemental Part B premium.39 Because insurers can finance benefits as optional insurance riders. However, supplemental benefits through enrollee premiums, there is one important exception: about one in we would expect more plans with supplemental every five MA plans covered dental benefits as benefits to charge a premium than plans without optional benefits. Dental insurance riders were supplemental benefits—especially for costly especially common for relatively expensive benefits like comprehensive dental care. There are comprehensive dental care benefits (28 percent, two different ways for insurers to charge consumers overall). For example, 29 percent of plans covering a premium in exchange for supplemental benefits. teeth restoration; 30 percent of plans covering First, they can offer supplemental benefits as endodontics, periodontics, or extractions; and insurance riders that enrollees can only access in 38 percent of plans covering non-routine complex exchange for a rider premium. Or, insurers can dental care did so by offering the services to include supplemental benefits as part of the MA enrollees as additional elective benefits over those plan’s basic policy and charge a plan premium to included in the basic policy, in exchange for a everyone enrolled in the plan. premium (appendix table A2). Therefore, many MA Our analysis of MA plan data reveals that almost enrollees pay a separate insurance rider premium, all MA plans offered coverage for supplemental potentially in addition to any plan premium, for benefits as part of their basic policy (table 3). For insurance that covers major dental care. TABLE 3 Percentage of Medicare Advantage Plans That Include Supplemental Benefits in Their Basic Policy versus as an Optional Insurance Rider, 2017 % of Plans Including: Benefit Type In basic policy1 As optional insurance rider2 Dental 83 17 Preventive dental 83 17 Comprehensive dental 72 28 Vision 97 3 Eyewear 93 7 Eye exam 97 3 Hearing 98 2 Hearing exam 98 2 Hearing aids 74 6 Clinical Services 99 1 Preventive Health 100 0 Auxiliary Benefits 100 0 Source: AARP Public Policy Institute analysis of the December 2017 MA/Part D Contract and Enrollment “Monthly Enrollment by Plan” file and of the 2017 “Plan Benefit Package” file. Data are based on plans that offer at least one benefit of each type. See Methods in the appendix for a list of individual benefits included in each benefit type. 1 Includes plans that offer at least one individual benefit in the benefit type in their basic policy. 2 Includes plans that offer all individual benefits in the benefit type through an insurance rider. 8 A ARP PUBLIC POLICY INSTITUTE DECEMBER 2018 We also identified plans that cover supplemental likely—not more likely—to charge plan premiums.41 benefits in their basic policy and compared them For example, 75 percent of plans without vision to plans that do not40 in terms of their likelihood coverage in their basic policy charged a plan to charge enrollees a plan premium (table 4). The premium; however, only 64 percent of plans with data show that, in fact, MA plans with supplemental such coverage had a plan premium. benefits in their basic policy are generally less TABLE 4 Percentage of Plans Charging a Plan Premium among Medicare Advantage Plans That Cover Supplemental Benefits in Their Basic Policy and Plans That Do Not, 2017 % of Plans Charging a Premium Plan includes benefit in Plan does not include Benefit Type basic policy1 benefit in basic policy2 Dental 65 65 Preventive dental 65 65 Comprehensive dental 65 65 Vision 64 75 Eyewear 64 69 Eye exam 64 75 Hearing 61 76 Hearing exam 61 75 Hearing aids 61 72 Clinical services 63 67 Preventive health 60 70 Auxiliary benefits 65 80 10 Most Common Benefits 3 Eye exam 64 71 Emergency coverage abroad 64 71 Gym membership 64 71 Remote access technology4 65 65 Oral exam 65 65 Dental cleaning (prophylaxis) 62 75 Routine hearing exam 64 50 Annual physical exam 66 64 Dental x-ray 64 68 Contact lenses 64 75 Source: AARP Public Policy Institute analysis of the December 2017 MA/Part D Contract and Enrollment “Monthly Enrollment by Plan” file, the 2017 “Plan Benefit Package” file, and the 2017 “Medicare Advantage Landscape Source” files. See Methods in the appendix for a list of individual benefits included in each benefit type. 1 For benefit types, includes plans that offer at least 1 individual benefit in the benefit type in their basic policy. For individual benefits in the list of 10 most common benefits, includes plans that offer the individual benefit in their basic policy. 2 For benefit types, includes plans that offer all individual benefits in the category through an insurance rider and plans that do not offer any of the individual benefits in the category. For individual benefits in the list of 10 most common benefits, includes plans that offer the individual benefit through an insurance rider and plans that do not offer the benefit. 3 Based on percentage of plans offering. 4 Web-/phone-based or nursing hotline. 9 A ARP PUBLIC POLICY INSTITUTE DECEMBER 2018 Overall, our results suggest that MA plans rely and alternative therapies. There are also important primarily on their rebate dollars to finance geographic differences in MA plans’ supplemental supplemental benefits42, and that they often benefit offerings, although it is not fully clear why. combine supplemental benefits and zero-premium Despite MA plans’ ability to charge premiums in plans to design attractive benefit packages. Due to exchange for supplemental benefits, our analysis data limitations, we did not examine cost-sharing requirements (e.g., deductible, co-insurance) for shows that, in most cases, MA enrollees in plans supplemental benefits—which MA plans can impose with supplemental benefits are less likely to face a regardless of whether they charge a premium. premium than people in plans without such benefits. CONCLUSION As a result of policy changes that will take effect MA’s supplemental benefits are a key difference beginning in 2019, insurers could decide to increase between traditional Medicare and Medicare their offering of many of the supplemental benefits Advantage. While vision, dental, and hearing that have historically been uncommon. Under the benefits are among the most commonly recognized new rules, MA plans will also be allowed to offer a supplemental benefits, MA plans have been allowed much broader scope of supplemental benefits than to offer a much more diverse set of supplemental those permitted today and will be able to target benefits—including gym memberships, bathroom those benefits to certain enrollees. These changes safety devices, transportation, and emergency coverage abroad. The extent to which MA plans cover could be consequential for Medicare beneficiaries. each supplemental benefit varies; for example, a large Having examined how supplemental benefits have majority of MA enrollees have some type of vision worked to date, in a forthcoming Insight on the or fitness coverage, but only a very small share of Issues we will take an in-depth look at the new enrollees have coverage for benefits such as bathroom policy landscape for MA supplemental benefits and safety devices, personal emergency response systems, its implications for consumers. 10 A ARP PUBLIC POLICY INSTITUTE DECEMBER 2018 Appendix METHODS We identified MA plans based on the 2017 MA/Part D Contract and Enrollment “Monthly Enrollment by Plan” file for the month of December.43 The data have enrollment information for 3,118 MA plans.44 We excluded 9 health care prepayment plan (HCPP)-1833 Cost plans because they did not have information on supplemental benefits. Our national-level analytical sample was comprised of 3,109 MA plans covering a total of 20,029,604 enrollees. To calculate the share of plans offering a given supplemental benefit and the share of beneficiaries in a plan offering the benefit, we merged information from the 2017 “Plan Benefit Package” (PBP) file45 into the plan- level enrollment file. The PBP file provides the universe of CMS-approved benefits for all MA plans46 sold in 2017. The data are for individual supplemental benefits as well as for some subcategories (e.g., preventive dental, comprehensive dental, eyewear). The file also details whether the supplemental benefit is offered as part of the plan’s basic benefit package or as an optional benefit. All analyses of MA supplemental benefits are based on plans with complete data across a benefit type (e.g., data on coverage of dental x-rays is based on plans with complete data on all individual dental supplemental benefits).47 Information on each plan’s service area comes from the 2017 MA/Part D Contract and Enrollment “Monthly Enrollment by Contract/Plan/State/County” file for the month of December.48 For the analysis of geographic variation in MA plans’ offering of supplemental benefits, we appended information on each MA plan’s state and county to the plan-level enrollment file. We excluded Alaska, Vermont, and Wyoming from the state-level analysis due to missing data. For the analysis of supplemental benefits included in plans sold in high- and low-cost areas, we defined the top and bottom 10 percent of counties for Medicare fee-for-service spending by calculating the 10th and 90th percentiles of 2016 per capita 49 FFS Medicare spending50 in the “Medicare Geographic Variation Public Use File–State/County Table.”51 The premium data come from the 2017 “Medicare Advantage Landscape Source” files,52 which include information on MA plans approved for the 2017 contract year. Because the MA Landscape files exclude Program of All-Inclusive Care for the Elderly (PACE) plans, Part B Only plans, and employer-sponsored plans, the analysis of plan premiums relies on a smaller sample of 2,628 MA plans (or 85 percent of plans in the MA plan-level enrollment file) and 16,112,920 enrollees (or 80 percent of all enrollees in the plan- level enrollment file). For segmented plans that were permitted to vary premiums between segments,53 we assigned the unweighted average of all segment premiums to the plan-level premium. 11 A ARP PUBLIC POLICY INSTITUTE DECEMBER 2018 TABLE A1 Prevalence of Medicare Advantage Supplemental Benefits, 2017 Plans Beneficiaries % in plans Benefit Type Benefit % offering offering Dental x-ray 63 58 Oral exam 67 61 Dental cleaning (prophylaxis) 67 61 Fluoride 22 18 Dental Prosthodontics/maxillofacial surgery 35 34 Non-routine services 23 23 Diagnostic services 23 20 Restorative services 45 41 Endodontics/periodontics/extractions 42 38 Eye exam 83 78 Eyewear upgrades 9 6 Contact lenses 63 58 Vision Glasses: lenses and frames 54 48 Glasses: lenses only 38 34 Glasses: frames only 37 30 Fitting/evaluation for hearing aid 40 36 Hearing Routine hearing exam 67 64 Hearing aids 55 57 Chiropractic maintenance care 12 11 Routine foot care 32 32 Clinical Services Acupuncture 11 15 Other alternative therapies 2 2 Residential substance abuse treatment 1 4 Health education 43 39 Nutrition counseling 9 11 Enhanced smoking cessation counseling 26 23 Gym membership 75 69 Enhanced disease management 11 8 Telemonitoring 6 4 Remote access technology1 70 68 Bathroom safety devices 2 2 Preventive Health Counseling services 17 17 In-home safety assessments 3 2 Personal emergency response systems 1 1 Medical nutrition therapy 5 4 Post-discharge in-home medication reconciliation 3 2 Weight management program 4 3 Annual physical exam 65 64 Enhanced screening EKG2 14 15 Emergency coverage abroad 77 76 Nonemergency transportation 28 25 Auxiliary Meals 19 17 Wigs for hair loss related to chemotherapy 4 3 Over-the-counter drugs/items 36 36 Source: AARP Public Policy Institute analysis of the December 2017 MA/Part D Contract and Enrollment “Monthly Enrollment by Plan” file and of the 2017 “Plan Benefit Package” file. 1 Web-/phone-based or nursing hotline. 2 EKG = electrocardiogram 12 A ARP PUBLIC POLICY INSTITUTE DECEMBER 2018 TABLE A2 Percentage of Medicare Advantage Plans That Include Dental Benefits in Their Basic Policy and as an Optional Insurance Rider, 2017 % of Plans Including: As optional Dental Benefit In basic policy insurance rider Dental X-Ray 82 18 Oral Exam 83 17 Prophylaxis/Cleaning 83 17 Fluoride 83 17 Prosthodontics/Maxillofacial Surgery 70 30 Non-Routine Services 62 38 Diagnostic Services 67 33 Restorative Services 71 29 Endodontics/Periodontics/Extractions 70 30 Source: AARP Public Policy Institute analysis of the December 2017 MA/Part D Contract and Enrollment “Monthly Enrollment by Plan” file and of the 2017 “Plan Benefit Package” file. Data are based on plans that offer the benefit. 1 Traditional Medicare is also known as Original Medicare or fee-for-service (FFS) Medicare. 2 Under current law, all Medicare beneficiaries except those with end-stage renal disease (ESRD) qualify to enroll in an MA plan. Beginning in 2021, Medicare beneficiaries with ESRD will also be eligible to enroll in an MA plan. 3 There are different types of Medicare Advantage plans, including health maintenance organizations (HMOs), preferred provider organizations (PPOs), private fee-for-service (PFFS) plans, HMO point-of-service (HMO-POS) plans, and special needs plans (SNPs). Plan availability varies by geographic area. 4 G. Jacobson, A. Damico, T. Neuman, and M. Gold, “Medicare Advantage 2017 Spotlight: Enrollment Market Update,” Issue Brief, Kaiser Family Foundation, Menlo Park, CA, June 2017, https://www.kff.org/medicare/issue-brief/medicare-advantage-2017- spotlight-enrollment-market-update/. 5 CMS projects that in 2019, 22.6 million people will be in Medicare Advantage—an 11.5 percent increase compared with 2018. MA enrollees will make up an estimated 36.7 percent of all Medicare beneficiaries in 2019. See https://go.cms.gov/2QgzBMN. 6 MA does not cover hospice care. Traditional Medicare covers hospice, even for people enrolled in MA. Many MA plans also include Medicare prescription drug coverage (Part D). 7 There are several other important differences between MA and traditional Medicare. MA plans generally have a provider network, whereas people with traditional Medicare can get services from any health care provider that accepts Medicare. MA plans are required to cap the total amount enrollees pay out-of-pocket each year for deductibles, co-payments, and co-insurance (cost sharing), while there is no such limit under traditional Medicare. Each MA plan has its own premium and cost-sharing requirements (subject to certain limitations), whereas beneficiaries in traditional Medicare generally face the same costs. 8 The new CMS administrative policies are outlined in the 2019 Medicare Advantage and Part D Rate Announcement and Call Letter (issued on April 4, 2018, https://go.cms.gov/2NVAy0x) and the Contract Year 2019 Policy and Technical Changes for Medicare Advantage and the Prescription Drug Benefit Program Rule (published on April 16, 2018, https://bit.ly/2qF6d7U). 9 The law includes provisions of the Creating High Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act. It was enacted February 9, 2018, https://bit.ly/2P41nMv. 13 A ARP PUBLIC POLICY INSTITUTE DECEMBER 2018 10Medicare Managed Care Manual, Chapter 4, Section 30.1, “Definition of Supplemental Benefits,” https://www.cms.gov/ Regulations-and-Guidance/Guidance/Manuals/Downloads/mc86c04.pdf. In addition to the requirements outlined here, (1) MA plans must incur a medical cost for the supplemental benefits they cover and (2) supplemental benefits must be medically necessary health care benefits. 11For example, traditional Medicare may cover routine nonemergency ambulance transportation, but only if other forms of transportation are dangerous to a beneficiary’s health and after a clinician certifies that it is medically necessary. MA plans can cover nonemergency routine transportation without imposing all those qualifying criteria. 12Medicare Managed Care Manual, “Definition of Supplemental Benefits.” 13Medicare Managed Care Manual, Chapter 4, Section 10.5.1, “Uniformity,” https://www.cms.gov/Regulations-and-Guidance/ Guidance/Manuals/Downloads/mc86c04.pdf. 14In some cases, MA plans can or must target supplemental benefits to plan enrollees with a certain health profile. For example, MA plans that offer enhanced disease management services (e.g., assigned case manager, disease monitoring, or educational activities) as a supplemental benefit, must target those services to enrollees with or at risk for a specific condition, such as diabetes, heart failure, or dementia. 15MA plans with multiple segments in their service area can vary premiums and cost sharing (but not supplemental benefits) across segments. 16For more examples, see Medicare Managed Care Manual, Chapter 4, Section 30.4, “Items and Services Not Eligible as Supplemental Benefits,” https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/mc86c04.pdf. 17However, plans may provide information about caregiver services. 18CMS refers to these benefits as mandatory supplemental benefits. 19CMS refers to these benefits as optional supplemental benefits. MA plans can offer enrollees a set of services as one optional supplemental benefit, offer services individually, or offer a combination of both. 20MA plans can also return the rebate dollars to enrollees by lowering their premiums. Medicare beneficiaries enrolled in MA plans typically pay a premium for Part B. Some beneficiaries may also owe a premium for Part A. If the MA plan includes prescription drug coverage, beneficiaries would also pay a premium for their Part D coverage. 21The rebate is either 50, 65, or 70 percent of the difference between the benchmark and the plan bid, depending on the plan’s rating on CMS’s star system. 22Plan bids are based on an average Medicare beneficiary and include administrative costs and profit. 23For local MA plans, the benchmark is set at 95, 100, 107.5, or 115 percent of the county-level per capita FFS cost for the year (subject to caps). To help attract plans, low-FFS-spending counties are assigned to benchmarks that are higher than FFS costs. Conversely, high-FFS-spending counties have benchmarks lower than FFS to generate Medicare savings. In addition, benchmarks vary with plans’ quality of care rating on CMS’s star system. For more information, see Medicare Payment Advisory Commission (MEDPAC), “Payment Basics: Medicare Advantage Program Payment System,” MEDPAC, Washington, DC, October 2017, https://bit.ly/2Q3Ai0z. 24We did not have information on premiums for supplemental benefits included in an insurance rider. 25Examples of fitness benefits include gym membership, exercise and yoga classes, a personalized exercise plan, or sessions with a certified trainer. 26MA plans could cover nutrition classes and/or individual nutritional counseling provided by state-licensed clinicians. 27MA plans could also include an in-home bathroom safety inspection if it was conducted by a qualified health professional. 28MA plans were prohibited from including cell phones in their personal emergency response supplemental benefits. 29Provided by state-licensed chiropractors. 30Provided by state-licensed or state-certified practitioners. 31Provided by state-licensed or state-certified practitioners. 32Insurers could cover meals only when ordered by a clinician immediately following a hospital stay or surgery and for a limited time. In certain cases, MA plans could also cover meals that beneficiaries need because of a chronic condition. 14 A ARP PUBLIC POLICY INSTITUTE DECEMBER 2018 33MA plans could offer transportation only for health-related reasons (e.g., transportation to doctor visits). 34Web-/phone-based or nursing hotline. 35Other than chiropractic care, foot care, and acupuncture. 36S. Zuckerman, L. Skopec, and S. Guterman, “Do Medicare Advantage Plans Minimize Costs? Investigating the Relationship between Benchmarks, Costs, and Rebates,” Issue Brief, The Commonwealth Fund, New York, NY, December 21, 2017, https://bit.ly/2xYp4yw. 37B. Biles, G. Casillas, and S. Guterman, “Does Medicare Advantage Cost Less Than Traditional Medicare?” Issue Brief, The Commonwealth Fund, New York, NY, January 28, 2016, https://bit.ly/2R7LxSg. 38B. Biles, G. Casillas, and S. Guterman, “Variations in County-Level Costs between Traditional Medicare and Medicare Advantage Have Implications for Premium Support,” Health Affairs 34, no. 1 (2015, January), https://bit.ly/2xQRxXK. 39Jacobson, Damico, Neuman, and Gold, “Medicare Advantage 2017 Spotlight.” 40Either because they offer the benefit as an insurance rider or because they do not offer the benefit at all. 41For a similar finding, see C. Pope, “Supplemental Benefits under Medicare Advantage,” Health Affairs (blog), January 21, 2016, https://www.healthaffairs.org/do/10.1377/hblog20160121.052787/full/. 42MA plans’ ability to leverage efficiencies in the delivery of care to enrollees is reflected in their rebate dollars. 43Publicly available at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and- Reports/MCRAdvPartDEnrolData/Monthly-Enrollment-by-Plan-Items/Monthly-Enrollment-by-Plan-2017-12. html?DLPage=1&DLEntries=10&DLSort=1&DLSortDir=descending. 44The MA/Part D Contract and Enrollment files include information on the following types of plans: 1876 Cost, HCPP-1833 Cost, HMO, HMO-POS, local PPO, Medicare Medical Savings Account, Medicare-Medicaid Plan HMO, Medicare-Medicaid Plan HMO- POS, national Program of All-Inclusive Care for the Elderly (PACE), PFFS, and Regional PPO. 45Publicly available at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics- Trends-and-Reports/MCRAdvPartDEnrolData/Benefits-Data-Items/2017-PBP-Benefits-. html?DLPage=1&DLEntries=10&DLSort=1&DLSortDir=descending. 46Including plans involved in the Value Based Insurance Design Demonstration. 47For most supplemental benefits categories, fewer than 5 percent of plans had incomplete data on whether they covered either of the individual supplemental benefits. 48Publicly available at https://www.cms.gov/Research- Statistics-Data-and-Systems/Statistics-Trends-and-Reports/ MCRAdvPartDEnrolData/Monthly-Enrollment-by-Contract-Plan- State-County-Items/Monthly-Enrollment-by-CPSC-2017-12. html?DLPage=1&DLEntries=10&DLSort=1&DLSortDir=descending. Insight on the Issues 140, December 2018 49Standardized risk-adjusted per capita costs. © AARP PUBLIC POLICY INSTITUTE 50Bottom 10 percent = standardized risk-adjusted per capita costs ≤ $9,024; top 601 E Street, NW 10 percent = standardized risk-adjusted per capita costs ≥ $11,892. Washington DC 20049 51Publicly available at https://www.cms.gov/Research-Statistics-Data-and- Follow us on Twitter @AARPpolicy on facebook.com/AARPpolicy Systems/Statistics-Trends-and-Reports/Medicare-Geographic-Variation/ www.aarp.org/ppi GV_PUF.html. For more reports from the Public Policy 52Publicly available at https://www.cms.gov/Medicare/Prescription- Institute, visit http://www.aarp.org/ppi/. Drug-Coverage/PrescriptionDrugCovGenIn/index.html?redirect=/ PrescriptionDrugCovGenIn/02_EnrollmentData.asp. 53About 4 percent of plans in the MA Landscape file. 15