28% Growth in Medicare Advantage Plans Led By Senior Housing and Care Providers

An increasing number of senior living and care providers are launching Medicare Advantage (MA) plans, pursuing potential clinical and financial benefits despite new challenges posed by Covid-19.

In 2020, 76 Medicare Advantage special needs plans (SNPs) were directly owned by senior housing and care providers, including skilled nursing and assisted living companies. For plan year 2021, that number increased to 98 plans, according to newly released data from ATI Advisory.

Three new provider organizations brought plans to market for 2021: The Perennial Consortium, CommuniCare and the Los Angeles Jewish Home for the Aging. These three organizations are launching a total of 14 plans, ATI Advisory Founder and CEO Anne Tumlinson told Senior Housing News. Other organizations that were already offering plans in 2020 have also increased the number of plans they are offering for the upcoming year.

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Most of these provider-led SNPs are institutional special needs plans, or I-SNPs. The growth of provider-led I-SNPs is outpacing the growth of I-SNPs offered by outside insurance companies, the ATI data show.

The rise in provider-led MA plans is due to several factors. An increasing proportion of older adults are opting to enroll in MA plans rather than traditional Medicare, but insurance companies offering Medicare Advantage products have been largely resistant to including senior care providers in value-based payment programs. Meanwhile, MA plans in recent years have been allowed to offer new benefits, including some for providing chronic care and meeting social determinants of health — services that are commonly provided by assisted living communities. 

So some senior living providers see an opportunity to create a more comprehensive and coordinated care model, with the possibility of greater financial upside, by launching their own plans rather than trying to partner with insurance companies. 

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But successfully and profitably managing an MA plan is challenging, and Covid-19 adds new pressures.

“While most MA plans are experiencing strong financial performance due to a drop in health care utilization, provider-led I-SNPs face a tougher road,” according to ATI Advisory’s announcement of the new data. “Their headwinds include a combination of small plan enrollment and high vulnerability of the enrolled population as a result of congregate living and frailty. Deaths and hospitalizations due to Covid-19 will be much higher as a percent of their overall membership and medical spend than a traditional MA plan.”

However, Covid-19 may also accentuate the benefits of owning an MA plan. By providing a funding mechanism for more on-site care services and care coordination, having a homegrown Medicare Advantage plan could help senior living providers maintain resident wellbeing and reassure prospective customers.

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“What makes our plan different is that it integrates (not just overlays) providers with community services, which makes what we do more effective, more convenient and less costly,” Lynne Katzmann, Juniper Communities CEO and a driving force behind The Perennial Consortium, recently told SHN.

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