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

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 isn’t what is surprising people 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.

As a country, we have a number of communities where the care infrastructure has been damaged or perpetually and sometimes intentionally under supported by various social determinants of health issues. We are becoming much more aware that 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 wakeup call because we saw the death rate from Covid literally twice as high in our African American and Hispanic populations — and we learned quickly that the significantly disproportionate distribution of chronic conditions for patients in those populations had a directly proportionate impact on the Covid mortality rate.

That impact was particularly relevant to the Medicare Advantage plans because of the disproportionate enrollment for the plans that we now see with those groups of patients.

We have slightly over 40 percent of our total Medicare population enrolled in Medicare Advantage Plans. They are not evenly distributed in all groups.

The current numbers show us that slightly over 50 percent of the African American Medicare members are in Medicare Advantage plans and we are now at where more than 60 percent of the Hispanic Medicare members have joined Medicare Advantage plans.

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

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 $15,000 a year.

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 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.

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

That unfortunate historic care infrastructure disparity reality is now extremely relevant to Medicare Advantage plans because a major and extremely important component of the Medicare Advantage program is the Special Needs Plans—the SNPs.

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 give those patients a consistent, complete, and quality focused package of coverage in care for the first time ever — instead of having them totally at the mercy of the non-system that is fee-for-service Medicare.

Four 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 because everyone who has looked at the care that has been delivered in too many settings knows how problematic, inadequate, and even inequitable too much of that care has been.

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 can more easily absorb those out of pocket costs — 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.

Covid should seal the deal for anyone wondering about the significant and relevant differences between fee-for-service Medicare and Medicare Advantage.

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.

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This post was written by Institute for InterGroup Understanding

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