Medicare Benefit, consolidation drove healthcare insurer traits in 2021

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It was troublesome to foretell development strains for the payer and medical insurance business in 2021, largely due to persistent uncertainties as a result of COVID-19 pandemic. Shopper habits has develop into extra unpredictable, care fashions and choices are altering and payers are adapting to a world that is evolving quickly and in sudden methods.

One issue that has been rendered extraordinarily unpredictable by the virus is the monetary well being of the nation’s main insurers, which soared in the course of the preliminary waves of the pandemic in 2020 however then settled again all the way down to earth towards the top of that yr. In 2021, insurers nonetheless posted principally substantial earnings, however they have been removed from the heights seen the earlier yr.

Over the course of the yr a number of basic themes began to emerge. Insurers are plowing ahead with digital transformation initiatives, together with the enlargement of telehealth and digital well being. Synthetic intelligence and machine studying have labored their means into the combination and half of payers now have innovation labs within the perception that digital innovation would be the key to the long run.

Insurers additionally continued to consolidate in 2021, leading to extremely concentrated markets which have drawn the eye of the federal authorities, which seeks to curb consolidation in a bid to empower customers.

After which there’s Medicare Benefit, which continues to develop; it is estimated MA plans will cowl extra folks in 2022 than unique Medicare. A number of main insurers have taken discover, increasing their MA choices in an effort to seize extra of the market.

It has been a wildly completely different yr within the payer house, however the best way it has performed out suggests many of those development strains could proceed into 2022 … and past.


COVID-19 continues to have an effect on each aspect of American life and the healthcare business, and it is driving traits within the payer world as nicely. On the HIMSS State of Healthcare occasion in June, Shreesh Tiwari, principal at ZS, mentioned the coronavirus has led to a rise in payer adoption of expertise and innovation.

Sixty-four p.c of medical insurance executives report an accelerated adoption of digital well being initiatives equivalent to digital well being. One other 53% report an acceleration in adoption of synthetic intelligence and machine studying practices, whereas 42% mentioned COVID-19 has helped facilitate the adoption of value-based care preparations, based on State of Healthcare analysis by HIMSS, the mother or father firm of Healthcare Finance Information.

COVID-19 has helped to drive modifications not simply in expertise, however in angle, Tiwari mentioned. The psychological and cultural limitations by way of adoption are not being seen as points.

Round half of payers have an innovation lab and imagine AI and machine studying will drive innovation ahead. However 53% imagine healthcare startups will prepared the ground in driving large expertise innovation, Tiwari mentioned.

The federal government additionally performs a key position. Forty-six p.c of payers suppose present insurance policies and rules will facilitate innovation.

“Payers have tasted the fruits of innovation previously few months,” Tiwari mentioned on the time. “Interoperability is being seen as a key driver by way of managing points popping out of the expertise infrastructure, information infrastructure points now we have, intently adopted by information privateness and information safety.”

Not all of insurers’ digital efforts are going flawlessly, nonetheless. Well being plans are revamping their digital choices in a bid to please customers, however these efforts are sophisticated, a Deloitte survey present in June. Many plans are struggling to correctly prioritize initiatives, suggesting an absence of clear imaginative and prescient.

The truth is, about half of the 35 expertise leaders surveyed recognized this lack of imaginative and prescient as an obstacle to those ongoing digital transformation initiatives. 

Customers are those largely affected, as consumer-facing platforms have made the least progress. Somewhat over half of respondents, 57%, mentioned they’re nonetheless within the technique of advancing these applications, whereas the rest have not but began however say they’re going to achieve this throughout the subsequent two years.

There are different areas which can be lagging as nicely. The survey centered on modernization efforts of 5 expertise platforms – administrative, analytics, scientific, core, customer support and engagement – and solely two respondents mentioned they’d modernized a type of platforms.

These surveyed recognized cyber and data safety because the quantity two funding precedence after enterprise intelligence. However they warned it may very well be costly to appropriate cyber-related errors, significantly ones having to do with cloud configuration. Baking in cybersecurity in DevOps from the outset may make for a extra environment friendly and resilient course of.

The findings converse to the broader drawback of affected person engagement, which has been an ongoing problem for well being plans and insurers. A J.D. Energy 2020 U.S. Business Member Well being Plan examine discovered that 60% of privately insured U.S. well being plan members mentioned they’d not been contacted by their well being plan with steering or info associated to COVID-19, and practically half (48%) mentioned their well being plan has not proven concern for his or her well being because the pandemic started.

Well being plans haven’t gained buyer centricity, as simply 36% of business well being plan members mentioned their well being plan acts of their greatest curiosity “at all times” or “more often than not,” and simply 25% mentioned they view their well being plan as a trusted associate of their well being and wellness.

This lack of customer-centric positioning resulted in an general satisfaction rating final yr for industrial well being plans of 719 on a 1,000-point scale, among the many lowest of all industries evaluated, based on J.D. Energy.


Medicare Benefit enrollment continued to extend and a number of other main insurers expanded their MA footprints. It is develop into a scorching marketplace for insurers heading into the brand new yr.

The Facilities for Medicare and Medicaid Companies mentioned that in 2022, MA is projected to succeed in 29.5 million folks in comparison with 26.9 million enrolled in a Medicare Benefit plan in 2021. 

For a lot of seniors, MA is the popular medical insurance due to its low upfront month-to-month prices and added advantages. Medicare Benefit plans will proceed to supply a variety of supplemental advantages in 2022, together with eyewear, listening to aids, each preventive and complete dental advantages, entry to meals (for a restricted period), over-the-counter objects, health advantages and worldwide emergency/pressing protection. 

As well as, the proportion of plans providing particular supplemental advantages for chronically unwell people will enhance from 19% to 25%.

An rising variety of Medicare Benefit twin eligible particular wants plans cowl each Medicare and Medicaid companies for people who find themselves dually eligible. In 2022, 295 plans (in comparison with 256 in 2021), will cowl all Medicare companies, plus Medicaid-covered behavioral well being remedy or long-term companies.

CMS will proceed to check the Half D Senior Financial savings Mannequin for insulin for seniors in additional than 2,100 plans in 2022. This yr, over 500 new Medicare Benefit and Half D prescription drug plans, in addition to two new pharmaceutical producers of insulin, are becoming a member of the mannequin that reduces out-of-pocket spending.

Moreover, greater than 1,000 Medicare Benefit plans will take part within the CMS Innovation Heart’s Medicare Benefit Worth-Primarily based Insurance coverage Design Mannequin in 2022, which checks the impact of providing a projected 3.7 million folks personalized advantages designed to raised handle their ailments and tackle social wants from meals insecurity to social isolation. 

The VBID Mannequin’s Hospice Profit Part, now in its second yr, can even be provided by 115 Medicare Benefit plans in parts of twenty-two states and U.S. territories. It supplies enrollees elevated entry to palliative and built-in hospice care. 

To assist with their Medicare prices, low-income seniors and adults with disabilities could qualify to obtain monetary help from the Medicare Financial savings Applications. Solely about half of eligible persons are enrolled, CMS mentioned.

Cigna is getting on on the act by increasing its MA plans, rising into 108 new counties and three new states – Connecticut, Oregon and Washington – which is able to enhance its geographic presence by practically 30%, the insurer mentioned in October.

As a part of the enlargement, Cigna mentioned most present prospects can pay the identical or decrease premiums, and promised that each market can have a minimum of one $0 premium plan. Different advantages will embody a social connection program to fight loneliness, personalized plans for folks with diabetes and incentives for annual wellness exams and different preventive care.

Cigna has elevated its geographic presence in MA by 80% since 2019, the insurer mentioned. The corporate now provides plans in 477 counties throughout 26 states and the District of Columbia.

Centene, in the meantime, mentioned this yr will probably be broadening its attain within the Medicare Benefit house in 2022, increasing into 327 new counties and three new states: Massachusetts, Nebraska and Oklahoma.

In all, this represents a 26% enlargement of Centene’s MA footprint, with the providing accessible to a possible 48 million beneficiaries throughout 36 states. Presently, Centene serves greater than 1.1 million MA members throughout 33 states.

In September, Centene additionally introduced it could consolidate its present Medicare manufacturers, together with Allwell, Well being Web, Fidelis Care, Trillium Benefit, ‘Ohana Well being Plan and TexanPlus, underneath one unified model dubbed Wellcare.

In the meantime, UnitedHealthcare, which already has important market management with its Medicare Benefit plans, will strengthen its foothold within the house by increasing its MA plans in 2022, including a possible 3.1 million members and reaching 94% of Medicare-eligible customers within the U.S.

Presently, greater than 7.3 million persons are already enrolled in UnitedHealthcare’s Medicare Benefit plans. The insurer mentioned the enlargement will deal with reducing prescription drug prices, and bettering advantages and the member expertise.

However whereas UnitedHealthcare has an enormous foothold within the Medicare Benefit house, it underwent scrutiny from the federal authorities earlier this month, when the Facilities for Medicare and Medicaid Companies blocked 4 Medicare Benefit plans from enrolling new members in 2022 as a result of they did not spend the minimal threshold on medical advantages. Three UnitedHealthcare plans and one Anthem plan did not hit the required 85% mark three years in a row.

Medicare Benefit plans are required to spend a minimal of 85% of premium {dollars} on medical bills; failure to take action for 3 consecutive years triggers the sanctions.

For UHC, the penalties apply to its MA plans in Arkansas, New Mexico and the Midwest, which encompasses Missouri, Kansas, Nebraska and Iowa. UHC plans cowl about 83,000 members, and the Anthem plan covers about 1,200 members. They can’t provide choose plans to members till 2023, assuming they hit the 85% threshold subsequent yr – what’s referred to as the medical loss ratio (MLR). In the event that they fail to hit the edge for 5 years in a row, the federal government will terminate the contracts.

UHC representatives instructed Bloomberg that it missed the 85% benchmark in sure markets partially due to sufferers deferring medical care as a result of COVID-19 pandemic.

Humana additionally introduced it could debut a brand new Medicare Benefit PPO plan in 37 rural counties in North Carolina in response to market demand within the japanese a part of the state. 


Well being insurer consolidation has been one other ongoing development – and one the present administration wish to see with tighter reigns.

An govt order issued by President Joe Biden in July cracked down on hospital and medical insurance consolidations and different actions it mentioned decreases competitors and drives up costs. The 4 areas of healthcare focused are: pharmaceuticals, hospital consolidation, medical insurance consolidations and listening to aids.

Consolidation within the medical insurance business has meant that many customers have little alternative in relation to deciding on insurers, the order mentioned. 

Biden directed the Division of Well being and Human Companies to standardize plan choices within the medical insurance market so folks can comparability store extra simply. Plans provided on the exchanges are sophisticated by the varied companies provided and variations in deductibles, the order mentioned.

Rick Pollack, president and CEO of the American Hospital Affiliation, urged federal businesses on the time to deal with insurance policies that tackle competitors amongst industrial well being insurers.

“The truth is, with industrial medical insurance plans, practically three out of 4 markets have been extremely concentrated in 2019 and the highest 5 largest insurers alone management practically 50% of the market. Research have discovered that when an insurance coverage market is extremely concentrated, insurers scale back supplier funds and don’t go financial savings alongside to the patron.”

The consequences of consolidation in 2021 additionally prolonged to pharmaceuticals. Consolidation amongst standalone Medicare Half D prescription drug plans was the foundation reason behind a 23% decline in choices for 2022, based on findings printed final month by the Kaiser Household Basis.

The typical Medicare beneficiary can have a alternative of 23 stand-alone prescription drug plans (PDPs) in 2022, seven fewer PDP choices than in 2021, the information confirmed. Though the variety of PDP choices in 2022 is way decrease than the height in 2007 – when there have been 56 such choices, on common – there are nonetheless quite a few standalone drug plan choices, based on KFF.

The comparatively massive lower within the variety of PDPs for 2022 is primarily the results of consolidations of plan choices sponsored by Cigna and Centene, ensuing available in the market exit of three nationwide PDPs from every agency in every area: all three of Cigna’s Categorical Scripts PDPs and three of Centene’s six Wellcare PDPs. Half D sponsors are restricted to providing not more than three PDPs in every area. 

This accounts for simply over 200 PDPs provided in 2021 that can not be provided in 2022. Enrollees in these consolidated plans will probably be routinely switched to different plans provided by the identical plan sponsor, though they’ll select to change into a unique plan in the course of the annual open enrollment interval.

The variety of corporations sponsoring stand-alone drug plans has declined steadily over time, from greater than 40 corporations in 2010 and earlier years, dropping beneath 25 corporations starting in 2015, and at 16 corporations in 2022. That is decrease than in some other yr since Half D began. 

PDP enrollment is predicted to be concentrated in a small variety of corporations in 2022, because it has been yearly. Primarily based on August 2021 enrollment, eight out of 10 enrollees in 2022 are projected to be in PDPs operated by simply 4 corporations: CVS Well being, Centene, UnitedHealth and Humana. All 4 corporations provide PDPs in all 34 areas subsequent yr.

Regardless of these year-to-year modifications in plan protection and prices, in addition to modifications in beneficiaries’ well being wants, a earlier KFF evaluation discovered that almost all Medicare beneficiaries didn’t examine plans throughout a current open enrollment interval, and most Half D enrollees didn’t examine the protection provided by their drug plan to different drug plans.

The numbers are comparable throughout each Medicare Benefit and conventional Medicare, with 68% of MA beneficiaries saying they do not examine medical plans, and 73% of these in conventional Medicare claiming the identical.

Twitter: @JELagasse
E mail the author: [email protected]

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