As people age, they typically need more help doing everyday things, whether it’s getting the groceries or taking a shower or remembering to take their meds. In many cases, even limited assistance can allow a senior to remain in their home for many years, even decades.
The logical program to provide in-home services is Medicare, which pays for most of seniors’ medical care. But Medicare does not cover them. Medicare does cover skilled medical services like physical therapy or nursing care when you’re ill or recovering from an illness or surgery, but you must be certified by a doctor as homebound, and even then it will not cover non-medical home services such as help bathing or dressing or preventive aids such as grab bars. The result is that many seniors end up spending down their resources to be eligible for Medicaid to get the non-medical care they need in order to live at home. Our system makes middle class people become poor to get the care they need – and, ultimately, states pick up the tab. Medicaid has been covering a growing portion of long-term care in the U.S. – 53% in 2018.
But 2019 ushers in help at home services for Medicare – and the change may be the catalyst for a more dramatic transformation in healthcare delivery and effectiveness.
In a move that was largely overshadowed by other political turbulence, the CHRONIC Care Act – sponsored by Sens. Orrin Hatch and Ron Wyden – became law last February as a part of the Bipartisan Budget Act of 2018. The act allows Medicare Advantage plans to offer a wider array of supplemental benefits to the chronically ill, and exempts these benefits from the requirement that they be “primarily health-related.”
Medicare health plans will now be allowed to target supplemental benefits to certain members who have different medical needs (see new guidance from CMS), instead of adhering to the requirement that each Medicare health insurance plan offers the same benefits with the same cost-sharing to all beneficiaries. Plans can now direct specific relevant benefits to those with certain health conditions – similar to the population-specific flexibility available via Medicaid waivers.
Virtually all of the new flexibility is directed to Medicare Advantage, the managed care arm of Medicare, which covers about a third of beneficiaries. Medicare Advantage was already able to offer Part D drugs, dental care, and some not-strictly-medical items such as eyeglasses, hearing aids, gym memberships. This will now expand to a wide range of supportive services such as health-related adult day care, home aides, and home safety devices and modifications such as grab bars and wheelchair ramps.
These changes are designed to save costs and improve care by focusing supportive services on the one-half of Medicare patients treated for five or more chronic conditions each year, who account for three-quarters of the program’s spending. The shift reflects the growing understanding of the role of social determinants of health – the idea that most of what our health depends on are non-clinical factors. Medicaid modernized its own managed care operations in 2016, similarly giving states greater power to cover services that promote good health. Like Medicaid, Medicare Advantage is a capitated program that allocates set amounts to each plan. If, indeed, the increased coverage of supportive services prove preventive, plans will have more money to invest in such offerings down the road. The idea is promising, since many states, like Illinois, have Medicaid-funded programs that offer similar in-home services for low-income seniors, and they have proved to be effective in keeping people in the community and out of institutions.
Only 3% of the Medicare Advantage plans are providing in-home supports in 2019, as the CMS guidance was finalized just a few weeks before plans had to submit their 2019 coverage proposals in June. And while 40% of plans are offering new types of supplemental benefits, for by far the largest group, one third, this is nicotine replacement therapy; followed by family caregiver support (such as respite care or counseling and training) at 13%.
But while the initial changes to Medicare may not be dramatic, they will be significant. CMS estimates that Medicare Advantage enrollment will be at an all-time high in 2019 – 22.6 million – up 11.5% over 2018. As the New York Times noted in June, “Although Medicare Advantage plans will wield most of the tools, their experience will be useful to policymakers.”
It is a welcome move for healthcare policymakers to focus more attention and funding on prevention and social factors, rather than on acute care or care delivered the last six months of life. But to realize its potential, we think Medicare needs to take a lesson from Medicaid. States are increasingly migrating their Medicaid home and community based services programs to managed care, and they’ve had to learn to do it in an efficacious and cost-effective manner. Some of the lessons learned by the states in those initiatives will come in handy for the challenges Medicare Advantage plans face as they design supplemental benefits like in-home supports.
MA plans should look to Medicaid’s home and community-based waiver programs, especially the Community First Choice option added under the Affordable Care Act. Illinois alone has nine waivers that provide home and community-based services to low-income populations ranging from technology dependent children to people with disabilities to older adults. Programs such as these offer beneficial “prototypes” that Medicare Advantage plans can build upon as they design and implement these services for their members.
See our new tip sheet for some concrete ways that plans can learn from Medicaid’s experience.
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