As senior living providers assess how they can seize new opportunities in Medicare Advantage (MA), they should consider one of the nation’s largest insurance companies an interested potential partner.
Indianapolis-based Anthem Inc. (NYSE: ANTM) is the largest for-profit managed health company under the Blue Cross and Blue Shield umbrella. It is also the most prominent insurer to announce benefits packages created under newly relaxed Medicare Advantage rules, which allow for coverage of non-skilled in-home care and other services.
The Centers for Medicare & Medicaid Services (CMS) first announced this MA policy change last April. In the months since, senior living operators have been contemplating what the change could mean for them, because the newly allowed benefits cover the sorts of services typically provided in settings like assisted living. However, it’s been unclear how insurance companies that offer MA plans might structure these benefits and when — and if — these insurers will start to offer this type of coverage.
Anthem has been one of the first insurance companies out the gate, announcing its new benefits packages in early October. These benefits, which take effect in 2019, could be tapped by plan members residing in senior living communities. And Anthem’s speed in bringing these new offerings to market should be a signal to senior living providers that the insurance company wants to be on the leading edge of innovation. As part of that effort, Anthem is open to developing future benefits and business arrangements that are more tailored specifically to the senior housing sector.
“It’s an open question for me, how do we work with these facilities in the future?” Martin Esquivel, vice president of Medicare product management at Anthem, told Senior Housing News. “Going forward, we want to push the innovation buttons and see what we can do together.”
The new benefits offered by Anthem-affiliated health plans are branded “Essential Extras” in Georgia, Indiana, Kentucky, Missouri, Ohio, Virginia and Wisconsin; “Everyday Extras” in Tennessee, Texas, and New Jersey; and the new benefits are not branded in Anthem’s health plan affiliates in California or Arizona. They cover services such as food delivery, transportation, adult day center visits, installation of assistive devices in the home, and up to 124 hours of in-home non-skilled care. Individuals enrolled in plans with access to “Essential Extras” or “Everyday Extras” will need to choose one of the services offered in the package.
“The reason we could jump so quickly [and offer these benefits] is Anthem and its affiliated health plans are committed to offering plans that offer high-quality medical care and other social and support needs,” Esquivel said. “We had a list we were already contemplating, and when the language came through, we were able to add to that list, pressure-test it all, and identify the items we knew we could deliver. Culturally, we were already there.”
MA insurers have multiple incentives for offering these sorts of benefits. For one, they might build enrollment by differentiating themselves from competing plans, and give consumers access to services that they want. Insurers also could see bottom-line benefits through better cost control. For example, by covering transportation and in-home assistance with daily activities, Anthem might help prevent a beneficiary from missing doctors’ appointments or experiencing a fall —- and this in turn should cut down on costly hospital stays.
While the new benefits are most obviously tailored to people who are not living in institutional settings, there are certainly some MA beneficiaries who reside in independent living and assisted living communities, Esquivel acknowledged. Anthem does not track the exact number of its beneficiaries in senior living.
There might need to be some discussion among senior living residents, Anthem representatives and leaders at the senior living community about how to coordinate these newly covered services. For example, an assisted living apartment probably already has grab-bars and similar features installed, but a resident might tap the new MA benefit to get a particular type of toilet seat, Esquivel said. Similarly, a senior living community probably already provides some form of transportation, but a resident might want to supplement that through the new MA coverage. And if there are discussions to be had about residents using MA to pay for some services already being offered in senior living settings, Anthem is also open to those conversations.
“How do we innovate and leverage what [senior living communities are] offering their consumers today?” Esquivel said. “It could be as simple as a contracting arrangement where they bill [the insurer], or something much more innovative that we haven’t thought of yet.”
Anthem may need to ‘get in line’
In light of expanding Medicare Advantage benefits, it’s plausible that residents will be approaching senior living providers and saying, “I’m getting this [service covered] through my MA plan, so I shouldn’t have to pay for it out of pocket,” according to Anne Tumlinson, founder and CEO of Washington, D.C.-based health care consultancy Anne Tumlinson Innovations.
However, assisted living companies do not have to quickly reassess their fee structures in response to this move by Anthem.
That’s because relatively few senior living residents are enrolled in Medicare Advantage, Tumlinson told SHN. More commonly, they are on Medicare fee-for-service and have some sort of supplemental insurance.
Indeed, few residents of Juniper Communities are MA beneficiaries, said Lynne Katzmann, founder and CEO of the Bloomfield, New Jersey-based provider. However, she anticipates that many more residents will enroll in Medicare Advantage in the coming years.
Part of this growth will be driven by efforts like Anthem’s, she told SHN.
It’s a new development that these MA insurers are so interested in working with senior housing, and it will likely lead to partnerships of various kinds, in her opinion.
“I think these insurers have realized that they want to grow their MA business, that senior housing has a built-in market, and that if they can work out something with the senior housing provider, they have access potentially to greater membership,” Katzmann said. “Should senior housing providers do it? It can’t hurt to be affiliated with them.”
One big caveat, though, is that in working with MA plans, senior living providers should negotiate hard so that they see financial upside from the cost savings that they will be enabling the insurer to achieve, she said. Senior living providers can drive this savings by keeping beneficiaries healthier for longer periods of time, outside of hospitals and other high-cost settings.
But both Katzmann and Tumlinson believe that working with companies like Anthem is a limited opportunity for senior housing providers. The new benefits that Anthem is offering won’t go very far in serving a typical assisted living resident with multiple chronic conditions and functional limitations, Katzmann pointed out.
A much larger opportunity is in senior housing providers starting their own MA plans, she and Tumlinson argue. Some of the nation’s largest operators have already done so, including Sunrise Senior Living and Erickson Living. Katzmann is in the process of organizing a consortium of providers to launch a plan.
“When senior housing operators who know these individuals and can truly coordinate care and services are involved as the plan sponsors, those benefits that could be provided under MA can go a lot further in their impact on outcomes,” Katzmann said.
The senior living companies also are assured, in this model, that they will reap financial benefits from the savings that the plans achieve, and can see to it that proper reinvestments are made to continually enhance services being provided to residents.
Tumlinson has only seen one example of an independent MA plan willing to share enough of the premium dollar with a long-term care provider to be competitive with the provider-led plans. If Anthem or similar large insurance companies are serious about making further inroads in senior housing, they will have to “get out of their own way” and “get in line” behind the provider-led plans and some companies like Optum that are already more deeply engaged in the sector, she said.
“That’s where I think all the innovation is going to happen in senior living benefits, in the provider-led plans, where the provider has skin in the game for the health care risk of their residents,” Tumlinson said.
Written by Tim Mullaney
Interested in learning more about the Medicare Advantage opportunity in senior living? Click here to access a dee-dive Senior Housing News report on the topic. It expands on the how and why of launching MA plans and partnering with existing insurers, and includes original insights from organizations including Optum/UnitedHealthcare, Avalere, and senior living providers on the forefront of Medicare Advantage.