Opportunities for Special Needs Plans Amid Medicare Advantage Policy Changes and Medicaid Redetermination

As the healthcare landscape starts to shift back to pre-pandemic measures, health plans face both challenges and opportunities.

In response to the Public Health Emergency (PHE) declaration for the COVID-19 pandemic, the federal government modified or waived multiple healthcare policies to expand access to care and streamline care delivery. Most notably, the pandemic-era changes improved nationwide access to health insurance coverage, boosting enrollment over the past three years. In 2021, the rate of uninsured Americans fell to 8.6%, equivalent to a 2016 historic low. Enrollment in public health plans—including Medicare and Medicaid—grew especially fast.

Now, as the healthcare landscape starts to shift back to pre-pandemic measures, health plans face both challenges and opportunities.

Medicaid Policy Changes

The Families First Coronavirus Response Act (FFCRA), passed in early 2020, contributed to substantial Medicaid enrollment growth. The FFCRA increased federal Medicaid funding for states that agreed to keep individuals enrolled until the PHE ends, even if their eligibility status changed. For three years now, Medicaid beneficiaries have had to take little to no action to retain their or update their health coverage. This provision for continuous enrollment resulted in a nearly 30% increase—or an additional 20 million enrollees since February 2020.

Late last year, legislation passed the Consolidated Appropriations Act, 2023, which will end continuous enrollment on March 31. As states begin to lose extra funding, they will resume Medicaid disenrollment, reversing most of the enrollment gains earned throughout the PHE. This shift won’t happen overnight. In a recent survey, 43 states stated that they will take at least 12 months to complete redetermination/renewals.


Medicare Advantage Policy Changes

The Medicare Advantage (MA) market remains robust, with more plans available in 2023 than ever before. Like Medicaid, MA plans have experienced steady growth for nearly a decade. Although, there are some signs of decelerated enrollment. In 2020, 2021, and 2022, MA enrollment grew by 1.9 million, 2.2 million and 2.3 million beneficiaries, respectively. In 2023, MA enrollment only grew by 1.5 million.

As the population ages, MA plans will continue to be in high demand but imminent funding cuts may tap the brakes on plan growth. A new rule will modify how the Center for Medicare and Medicaid Services (CMS) calculates the amount a MA plan is required to pay back to the government. CMS estimates the changes made to the risk adjustment model will reduce payments to MA plans by $11 billion in 2024.

Between PHE expiration on May 11 and other federal policy changes, millions of Americans are expected to lose health insurance coverage during this transitional unwinding period. Individuals who no longer qualify for Medicaid and or who are ineligible for certain MA plans will need to find alternative sources of coverage. As a result, other types of health plans expect an increase in enrollment moving forward.

An Open Door for Special Needs Plans

When Congress authorized Special Needs Plans (SNPs) in 2004, it enabled MA insurers to offer tailored approaches to care for high-need beneficiaries. For a special needs individual—including someone who is institutionalized (I-SNP), dually eligible for Medicare and Medicaid (D-SNP), or has a severe or disabling chronic condition (C-SNP)—the benefits of standard MA plans often fall short. Since SNPs serve a disproportionately high-need population, they are more likely to offer non-medical supplemental benefits to fill the gaps in other plans.

CMS has taken action to reduce health disparities by ensuring that all MA SNPs ask about an individual’s barriers to accessing care through required health risk assessments on housing instability, food insecurity, and transportation. Understanding the exact needs of beneficiaries will allow SNPs to provide more comprehensive and customized programs and create better access to care for this population.

Keeping Up with Continued Growth

SNPs have been experiencing significant growth with enrollment tripling in the past decade. And as Medicaid and MA beneficiaries navigate policy changes, some will look to SNPs for coverage if they don’t re-qualify for their current plan or if their plan is not meeting their needs. As member needs and experience increasingly comes into the spotlight, SNPs provide an advantageous collection of benefits curated to meet the evolving needs of members.

With increased enrollment comes increased funding for health plans. CMS is dedicated to understanding how plans are reinvesting government dollars to benefit their members. These health plans need to choose supplemental benefits that provide value to beneficiaries, and ultimately ensure the benefits are being utilized. Given the forthcoming uptick in enrollment, SNPs will need to remain competitive in their offerings.

Currently, transportation is an underutilized benefit and social determinant of health (SDoH) that improves access to care and reduces overall healthcare costs. Increasing access to reliable transportation for these members helps level the playing field across the social determinants of health domains. Non-emergency medical transportation (NEMT) benefits can be a driving force for plans to better meet the many socioeconomic needs of their Medicare, MA, and SNP beneficiaries.

With SafeRide’s modern technology and expertise in supporting a wide range of patient populations and health plan beneficiaries, we are helping to shift this paradigm. SafeRide is proud to be one of the largest SNP transportation providers in the country, and every health plan needs a curated transportation program to meet members’ unique needs – whether it’s for transportation for treatment like chemotherapy or a single mother juggling childcare and low access to a vehicle.

Unlike traditional transportation solutions, our NEMT technology provides data collection, reporting, and analytics—allowing health plan administrators to identify efficiency improvements, remedy any wasteful practices (and risks), and drive results to the bottom line at every layer. Members report a higher degree of satisfaction while plans have greater oversight of their members’ health and care adherence – and these two factors ultimately drive member retention and plan expansion. In addition, with NEMT technology, it's easier to scale a transportation program as a health plan's member population grows.

To learn how SafeRide can help Special Needs Plans gain a competitive advantage, visit our website.

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