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How Did Medicare Advantage Become a Very Successful Social Services Recovery Program for People Damaged by Social Determinants of Health?

January 5, 2022

How did Medicare Advantage become a very successful social services program for millions of people without anyone noticing that it was happening?

Medicare Advantage is an alternative way of people enrolling in Medicare. Instead of simply buying each piece of care by the piece like traditional fee-for-service Medicare, the government pays Medicare Advantage plans a fixed amount of money each month — a capitation payment — for each person enrolled in a plan.

The capitation payment is based on the age, gender, area of residence, and health status of the people who enroll. The capitation is lowest for the people who have no health conditions and it goes up based on the health status of people enrolled.

The amount of money paid has been targeted to be 95 percent of the average area per capita cost of buying for care for people with standard fee-for-service Medicare in each area.

The plans who are paid the capitation can use that money in flexible ways to pay for services that are not on the standard Medicare fee schedule — like in home nursing care or electronic linkages between care givers — and each plan can put together the care teams needed to both deliver care and improve the health status of their members.

Plans do things like identifying which patients are at high risk of having an asthma attack or having a congestive heart failure crisis and they intervene at the patient level to reduce patient risk and to improve patient care.

Care is much better for a congestive heart failure patient if you have a care team who knows you are at risk and who is working with you to reduce the risk. It is ugly, painful, functionally disruptive and sometimes frightening to a patient to have those kinds of crisis happen, so the Medicare Advantage plans are very well regarded by their patients for doing that work.

Standard fee-for-service Medicare does not do any of that work — and standard fee-for-service Medicare will charge a nurse with billing fraud if the nurse helps a congestive heart failure patient or an asthma patient in their home and then bills Medicare for having helped the patient.

Patients with all types of chronic conditions do better with Medicare Advantage.

But that higher quality of care in the Medicare Advantage plans isn’t what is surprising people the most about Medicare Advantage right now. Everyone who knows care in any functional way knows that the care is far better for Medicare Advantage patients.

What is surprising some people today is who is enrolling in Medicare Advantage.

Two out of three very low-income Medicare members have now joined Medicare Advantage plans. More than half of the African American Medicare members are now in plans and over 60 percent of the Hispanic Medicare members are in plans.

The average net worth of the white Medicare members exceeds $100,000, and the average net worth of the Hispanic members of Medicare Advantage have net worth under $14,000, so the differences between the two approaches to care and benefits is increasingly important to large numbers of people.

The fact that Medicare Advantage has both significantly better benefits and lower costs is extremely relevant to all of the low-income Medicare members whose lives are far better at several functional levels when those benefits exist. Vision care and hearing care benefits can be very life enhancing for people who have extremely low-income levels and extremely low financial resources.

So there is an immediate and highly visible benefit difference and cost level for those patients. There is also a less visible functional benefit that is even more important for many of those enrollees that we all need to understand.

 Many of the Medicare Advantage enrollees are now getting team care — patient focused team care — for the first time in their lives. That is not an overstatement or exaggeration. It’s how Medicare works.

Traditional fee-for-service Medicare does not provide or pay for or support or require any level of team care. Many of the people living in inner city care sites where their community care infrastructure that has been funded by Medicare has no connectivity tools at all are now — as members of Medicare Advantage plans — getting team care from the moment of enrollment and those members are finding it to be significantly better care.

That’s why so many people from those groups are joining plans.

There is also some basic damage repair happening relative to care delivery for a number of those low-income patients and their care sites.

That change in approach for those patients is extremely relevant to policy people and to care and community leaders who are looking at Social Determinants of Health issues for older Americans for the first time and who want care to be equitable, competent, patient focused, and outcomes oriented even for the people who were not supported by those levels of care in their past.

As a country, we now know and we are beginning to recognize for the first time that we have a number of communities and settings where the care infrastructure has been damaged or perpetually and sometimes intentionally inadequate and under supported by various social determinants of health issues.

We are becoming much more aware as a country that too much of the health delivery in this country has not been entirely equitable or effective in its service of all of our people and we have a greater awareness today of how many health problems for people result from those inequities.

When Covid hit, we had an additional and very reinforcing wakeup call on those issues because we saw the death rate from Covid was literally twice as high across the entire country for our African American and Hispanic populations.

We learned quickly as a country that the significantly disproportionate distribution of chronic conditions that exists for the patients in those populations had a directly proportionate impact on the Covid mortality rate and on the opportunity to provide badly needed team care for millions of people who would have been completely isolated when Covid hit if they had not been enrolled in Medicare Advantage plans.

 The timing of that pandemic was particularly relevant to the Medicare Advantage plans because of the disproportionate enrollment for the plans that we now see with both African American and Hispanic patients.

That 60 percent of Hispanics enrolling compares to slightly over 30 percent of the white Medicare enrollees who have joined the plans.

The economic issues are extremely important and they have been completely invisible and not included in either the discussions or debates about Medicare programming.

When we look at income levels in the plans, we see that more than two thirds of the total Medicare enrollees who make less than $30,000 a year are now in the plans. We also see that average annual income of the two-thirds of the Hispanic Medicare Advantage members is under $14,000 a year and it echoes the net worth numbers for those enrollees.

What we know from those numbers and what we can know from almost every other analysis that has been done of social determinants of health in American settings is that the lowest-income people have had the worst care, the poorest linked care, the most medically under documented care, and the lowest levels of equity, availability and service relative to their care and the health status of too many people today has been impaired and damaged by those realities.

Special Needs Plans Take Care of the Lowest-Income Medically Disadvantage People

The disproportionate enrollment pattern is even greater when you look at the people in our country with both the greatest health care needs and the lowest income levels — the people who are eligible for both Medicare and Medicaid.

Those people with dual eligibility for both Medicare and Medicaid have been enrolling in the components of Medicare Advantage that are set up to be Special Needs Plans.

The Special Needs Plans for Medicare Advantage actually enroll the lowest-income Medicare people — the people with Medicaid income levels and with multiple health conditions — and the plans very appropriately and effectively give those patients a consistent, more complete, and quality focused package of coverage in care for the first time ever. That approach is far better for those enrollees than leaving them — totally at the mercy of the non-system that is fee-for-service Medicare with weaker benefits, no care linkages, and no quality agendas for their care.

The Special Needs Plans have been almost invisible in the health care discussions. The people who are pushing for a single payer approach that would provide Medicare for everyone as our new national program should definitely figure out how to include the Special Needs Plans in their package because they do so much good for people who clearly need what they do.

Almost 4 million people have now joined Medicare Advantage Special Needs Plans.

Many of those people are actually getting the best care of their lives from those SNPs and we can say that without hesitation or fear of being contradicted or rebutted because everyone who has looked at the care that has been delivered in too many settings up to now knows how problematic, inadequate, and even inequitable too much of that care has been for all of those patients.

Standard fee-for-service Medicare refuses to pay for team care — so we know with no question or challenge that those patients were not getting that support or that care as fee-for-service Medicare patients.

Standard fee-for-service Medicare has very unintentionally but very functionally been part of the problem for those underserviced patients.

Even the most ideological Medicare Advantage critics — the people who are hard on the program because it delivers a much broader set of benefits to members for the same Medicare dollar — should hold their fire and not do things now to damage the care being given to those Special Needs Plan people who deserve to have good care for the first time in their lives.

So the interesting and somewhat unexpected reality we see today is that Medicare Advantage has somehow crossed the line into being a social program of sorts and Medicare Advantage is not just an economic alternative anymore because of who has actually enrolled and because of what those people need for support and care to live better and more lives.

The Medicare Advantage members — across the board — currently spend about $1600 a year less than people who have fee-for-service Medicare Coverage.

That savings per Medicare Advantage member last year was $1400.

One of the reason that two thirds of the lowest-income Medicare beneficiaries have chosen to enroll in Medicare Advantage plans is that traditional Medicare is not an optimal benefit package and the painful reality is that the average enrollee in that fee-for-service Medicare program incurs over $5000 each year in out of pocket expenses.

Higher-income Medicare members with higher levels of net worth can more easily absorb those out of pocket costs for fee-for-service Medicare — but the lower-income people who are on Medicare benefit significantly by the lower costs, better benefits, and significantly better care that happens in Medicare Advantage plans and we can expect to see that enrollment grow.

Covid should seal the deal for anyone wondering about the significant and relevant differences between fee-for-service Medicare and Medicare Advantage and debating which approach is better for us as a nation and for Medicare enrollees.

The plans responded quickly and directly to the disease. Medicare Advantage plans were among the very first sites in America to have credible Covid tests in place in their care sites, and the plans who put nurses into people’s homes to provide that level of in-home care did it as soon as they could after Covid hit.

By contrast. The Medicare patients who only had fee-for-service Medicare coverage did not have any mechanisms in place steering them to care. Many of those isolated and unconnected fee-for-service Medicare patients may have been frightened and very concerned about what they needed to do as Covid hit to get care. In clear contrast, all of the people who were enrolled in Medicare Advantage plans had care teams, care infrastructure, health educators, and support processes in place for Covid care and all of the follow up from that care.

So Medicare Advantage has crossed another threshold, and met another test and performed extremely well at levels that will be relevant to both policy makers and elected officials going forward working on the future of our care delivery system as a country as Covid has caused us all so much pain.

The Medicare Advantage plans moved immediately to electronic care connections when Covid changed the care site access reality, and those electronic connections with patients are going so well and are so deeply appreciated by patients that they are becoming a permanent part of delivery for Medicare Advantage plans.

The news media who are interested in both the patterns of enrollment and in success in providing Covid-related care compared to the clear failures in those areas of fee-for-service Medicare should have some celebratory and relevant stories to cover for 2022.

For now, we need our policy people and some of our key media people to recognize that Medicare Advantage has become a major asset for the social issues that have damaged so many people for such a long time. By providing team care to the lowest income Americans, Medicare Advantage is becoming the care system for older people from all of those groups who need what the plans have to offer.

Those Medicare members have voted with their feet by joining the plans and they now will probably vote in person to support having all of those additional levels of care if those programs and those processes become threatened in the future.

We should build on this success. We should understand it, celebrate it, and make it even better in the future.

And the 4 million people who are having their special needs met should be protected from having that care taken away by people who resist having the plans going down those paths.

No one expected Medicare Advantage to become a social program.

It happened.

That’s actually good for everyone.

Let’s build on that approach and turn the Medicare Advantage Five Star Plan into a Covid aligned set of reports — and then get anyone who doesn’t enroll in a plan to at least consider an ACO if they are available in their areas. An ACO that breaks even on costs is a far superior use of the Medicare dollar than just throwing that money down the fee-for-service rat holes for care.

And because we know the future of our country will depend on our children, we need to take a biological approach to Medicaid and new births and channel every child born in America into support approaches that build neuron connections by the billions and even trillions at the point in the lives of every child when the children are epigenetically wired to benefit from those interactions.

We need best care for our elders and we need optimal beginnings for our children — and we can clearly and obviously afford to do both. And we also clearly can’t afford not to do either one.