Not Adjusting Medicare Advantage Benchmark Means Potential Costs to Seniors

AHIP recently contracted Wakely Consulting Group to analyse what the effects would be of Congress adding benefits to Medicare as part of a $3.5 trillion budget reconciliation package. The report found that adding dental, hearing, and vision benefits to traditional Medicare without adjusting the Medicare Advantage benchmark could result in fewer benefit dollars for Medicare Advantage (MA) plans. These benefit dollars pay for additional benefits, such as those allocated to remedy social determinants of health.

The report that Wakely produced was based on current 2021 MA benefit offerings, enrollment, rebate and premium levels, as well as star ratings by contract. The analysis of the report suggested that if Congress added these extra benefits to traditional Medicare without adjusting for the established Medicare Advantage benchmark an MA plan would have 48-73 percent fewer rebate dollars available on average. These rebate dollars typically support modern benefits like meals, in-home services and support, over-the-counter medications, and transportation. AHIP also noted that a senior or person with disabilities enrolled in a MA plan would stand to lose $696-$1,056 a year in added benefits. These added benefits are designed to close gaps in care, improve health integrity, as well as offset the impact of social factors on people’s overall health.

How The Benchmark Works

When a health insurance provider submits an MA plan bid to CMS they use a base rate benchmark. The bid the plan proposes details the coverage, benefits and payments for the benefit year. The Medicare Advantage benchmark is based on what the equal costs would be for that person, if they were enrolled in traditional fee-for-service Medicare.

Almost half of all Medicare enrollees did not have a dental check-up in the past year due to lack of insurance, a recent study by the Kaiser Family Foundation reports. On the other hand, 98 percent of those eligible for Medicare presently have access to a MA plan that offers vision, dental and hearing coverage, the AHIP announcement reports. Individual dental policies, Medigap policies with dental, vision and hearing coverage, as well as employer-provided coverage for working seniors also provides dental, vision and hearing insurance for seniors.

Matt Eyles, president and CEO of AHIP was quoted as saying “Americans should be able to rely on a high-quality Medicare program. Medicare Advantage delivers for a growing number of seniors and people with disabilities. Asking 27 million Americans to pay for new dental, vision, and hearing benefits in lieu of services they affirmatively chose and have come to rely on is unnecessary and unfair.”

Not adjusting the Medicare Advantage benchmark could affect other factors in addition to cost and lost benefits the study reports. For example, as of February 2021, about 57.5 percent of all MA members, excluding prescription drug plans, were enrolled in plans with a $0 member premium. The Wakely report states that adding vision, dental and hearing benefits without adjusting for the Medicare Advantage benchmark would greatly limit the capacity to sustain plans that offer zero dollar premiums.

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Blog by: The ForeSee Medical Team