How a New Congress, President Could Impact Wages, Medicare Advantage, Vaccines

A new president and a new Congress could accelerate the distribution of Covid-19 vaccines, change the federal minimum wage and set crucial public health policies related to Medicare Advantage and other programs. The senior living industry will play an important role in how these actions unfold in the coming months and years — but what it can affect depends on how much work providers are willing to do.

For instance, the new administration has made it a goal to deliver 100 million vaccine shots during President Joe Biden’s first 100 days in office. With the prospect of the Johnson & Johnson vaccine on the horizon, it is likely that the administration will exceed its target, according to Avalere Health Founder Dan Mendelson. But that outcome hinges on the willingness of senior housing providers to facilitate it.

“Already, I hear from people at CVS and elsewhere that they’re having trouble getting into buildings and getting scheduled, and that, to me, just goes right back to the sector,” Mendelson said Wednesday during a webinar moderated by National Investment Center for Seniors Housing & Care (NIC) Co-Founder and Nexus Insights Founder Bob Kramer and Juniper Communities CEO Lynne Katzmann. “I don’t think it’s something that’s going to happen, I think it’s something that everyone … has the ability to make happen.”

The Biden administration believes the U.S. may see daily vaccination counts of 1.5 million doses. Whether the actual number is higher or lower in the end could change the course of the senior living industry’s Covid-19 efforts, according to ATI Advisory Founder and CEO Anne Tumlinson.

“If we can do 2 million a day … [that] would make a really big difference in terms of our ability to get ahead of these [Covid-19] variants,” Tumlinson said during Wednesday’s webinar. “I think they’ll be really aiming for 2 million a day so they can exceed expectations.”

Minimum wage movement

The administration is also pushing for a $15 minimum wage at the federal level. The White House’s current proposed $1.9 trillion relief package includes language that would increase the federal minimum wage to $15 by the year 2025.

Mendelson believes the federal minimum wage will increase, but not to $15 in the near future. And he said providers should work to educate legislators on how a $15 minimum wage would affect the senior living sector.

“It’s a lot of pressure to deal with because there are a lot of markets where wages are sub-$10, and working on that is going to be important,” he said. “I think it’s also going to be important to help the policymakers understand the implications of different wage changes.”

There are also questions about how much Congress will change the relief package as it’s currently written, and Mendelson pointed out that although Democrats have a slim majority in Congress, that does not guarantee the bill will emerge unscathed.

Dan Mendelson, by Aging Media Network

While past bills have focused on federal relief for businesses, this one is targeted more at average Americans, Tumlinson noted. But she also believes the administration is working on additional relief proposals that may be announced soon.

At the end of the day, Mendelson believes that the senior living sector must align itself with the Biden administration’s stated priorities: dealing with Covid-19, increasing health care coverage and eliminating racial and economic disparities.

“If the sector wants funds to flow in, it needs to align with those priorities so that the goals can be furthered through the interests of the sector,” Mendelson said.

MA to stay; referrals to change

It’s no secret that the role of managed care plans steadily increased during the second half of the Obama administration and all of the Trump administration. And that is not a trend that is likely to reverse anytime soon.

Memberships in Medicare Advantage (MA) plans in particular have seen “exploding growth,” with some estimates that about 36% of eligible beneficiaries are now enrolled in such plans, according to Kramer.

“I think it is quite likely that we will see this kind of growth going forward in the future,” Mendelson said.

But Mendelson added that he believes the Biden administration won’t give a “blank check” to providers of MA plans, either. For example, the administration will likely more closely scrutinize certain marketing practices.

“There are some health plans, for example, that are marketing food, and the people signing up for the plans think they’re going to get fed if they enroll in the plan, but really, these are very selective and targeted benefits,” Mendelson said. “I think the administration is going to continue to want to innovate around these issues.”

Like with vaccines and the federal minimum wage, providers can help shape the future of Medicare Advantage policy. Both Mendelson and Tumlinson believe that the senior living industry must work now to demonstrate its value to federal policymakers alongside payers such as MA plan providers, hospitals and health systems.

When the pandemic hit the senior living industry last year, many traditional referral sources dried up — and Mendelson believes that change could be permanent in some cases. But while some referral doors have closed, others have opened.

“If an at-risk primary care company is in your neighborhood, and they are taking full cap risk for Medicare Advantage plans, they are a great target for referrals,” Mendelson said. “You are going to need to prove the value of your engagement in the health care system in the context of what is happening right now.”

The use of telehealth — a trend that accelerated during the pandemic — is likely to continue, but in a modified form, he added.

“The issue is that governments shouldn’t be expected to pay the same for a telehealth consult [compared to] a face-to-face consult, because the government should be able to realize some of those efficiencies,” Mendelson said. “And that’s my expectation as to what happens, which is that there’s continued flexibility, but that the payment for those services comes down somewhat.”

Looking ahead, there are still some potential surprises on the horizon for providers. One risk is that providers may feel the effects of unexpected cost reductions or offsets, and it is likely that the managed care sector could see increasing medical loss ratios, Mendelson said.

On the whole, Tumlinson believes the Biden administration will offer fewer surprises than the last one. But she is also wary of new federal scrutiny of assisted living providers.

“The main thing that I’m keeping an eye out for is what I think is going to be a lot more scrutiny … on the assisted living sector, and that we could see it in congressional hearings or activity at CMS,” Tumlinson said. “There is an enormous amount of Medicaid money going into assisted living right now … so I think they are going to be asking themselves, what is this, and what is the value?”