Reprinted with AIS Health permission from the Oct. 9, 2020, issue of Health Plan Weekly.
Star ratings for Medicare Advantage plans declined across the board for 2021, signaling an overall drop of around 5.5% in the number of members enrolled in contracts with 4 or more stars, according to an analysis of MA data.
Based on his early analysis of CMS data, 74% of MA members are in contracts with 4 or more stars for 2021, down 5.5% from 80% for the 2020 plan year, Evercore ISI analyst Michael Newshel wrote in an Oct. 8 investor note.
“Not only did the enrollment weighted average rating drop, which is alarming and like everything else in 2020, almost unprecedented, but there were also noteworthy drops in the percent of contracts at or above 4 stars and the percent of members in contracts at or above 4 stars,” Melissa Newton Smith, executive vice president, consulting and professional services at HealthMine, Inc., tells AIS Health.
Still, “despite these headwinds in the 2021 ratings, we are pleased to see that highly rated plans remain available to beneficiaries in substantially all counties as we head into AEP,” Smith says. The Medicare Annual Election Period runs from Oct. 15 through Dec. 7.
Among the larger MA insurers, Cigna Corp. is the only one with an increase in enrollment in bonus-eligible contracts, with a year-over-year change of 3.8%, Newshel calculated. Cigna continued its improvement from last year, when it saw a 7.2% increase in enrollment in plans with 4 stars or higher. Some 86% of Cigna enrollees are in plans with 4 stars or better.
UnitedHealth Group and Anthem, Inc., didn’t fare as well, seeing outsized drops compared to other insurers, Newshel said. Current MA enrollment in contracts with 4 or more stars dropped 9.9% for UnitedHealth, more than wiping out its 9.2% increase from last year. Enrollment in plans with 4 stars or better dropped from 82% to 72% for UnitedHealth. And enrollment in quality-bonus-eligible contracts fell 7.1% for Anthem, continuing a slide that began last year with a 3.6% drop, Newshel said. Only 51% of Anthem’s MA enrollees are in plans with 4 stars or better.
Three Plans Saw 2% Decline
Centene Corp., CVS Health Corp.-owned Aetna and Humana Inc. each saw declines of around 2%, Newshel said. “On a relative basis, that means the modest declines in the 2% range [for Centene, Aetna and Humana] are still better than the industry overall,” Newshel wrote.
Still, the percentage of enrollment in bonus-eligible MA plans differs widely between those three insurers: at Humana, 89% of MA members are enrolled in plans rated 4 stars or better, compared with 76% at Aetna and only 28% at Centene.
The star ratings affect payments for the 2022 plan year, so enrollment may change between now and then. Contracts with 4 stars or higher receive 5% payment bonuses from CMS.
Smith notes that enrollment in highly rated plans fell even though CMS agreed to accommodations on quality measures due to the COVID-19 pandemic. “With the continued changes in both the measures included in the program and in measure weights, this makes it abundantly clear that plans must evolve their stars strategies and tactics to maintain strong ratings,” she says. Starting in 2021, CMS increased the weight of member-experience measures—areas in which plans historically have struggled.
Meanwhile, MA enrollment is projected to accelerate next year, according to CMS. Based on filings from insurers, CMS estimated that MA enrollment in 2021 will increase to 26.9 million, a 10.2% year-over-year bump that’s slightly faster than the 9.3% year-over-year growth clocked as of September. According to Credit Suisse analyst A.J. Rice, if that 2021 growth rate materializes, it would represent the strongest year-over-year MA enrollment gain since 2008.
Centene, Cigna Widen Footprints
Premiums will decline 11% with the repeal of the Affordable Care Act’s health insurer fee, CMS said. In addition, beneficiaries will have more plan choices, with around 2,100 more MA plans operating in 2021 than in 2017. Both Cigna and Centene are expanding their county footprints significantly: Cigna will offer plans in 369 counties spanning 23 states, representing a 22% increase, while Centene will operate in 1,249 counties across 33 states, a 30% increase. Aetna also is expanding its footprint, offering plans in 115 new counties for a new total of 1,793. That will provide an additional 1.9 million beneficiaries access to an Aetna plan, for a total of 54.7 million beneficiaries, the insurer said.
Citi equities analyst Ralph Giacobbe said in an Oct. 6 investor note that he anticipates “outsized MA growth from [Centene] in 2021 considering expansion of plans/territories, albeit off of a relatively smaller base than competitors. Furthermore, we noted that among the larger players, we see healthy growth for CVS [Aetna] given increased plan offerings and county expansion.”
Overall, beneficiaries can choose from more than 4,800 MA plans during 2021 open enrollment, and the average number of MA plan choices per county will increase by eight plans to around 47 plans per county. MA premiums will average around $21 per month, according to CMS.
Multiple insurers are touting affordability and convenience in their 2021 plan offerings, with many citing the pandemic as a reason to add telehealth and other benefits (see story, p. 1). For example, Humana’s MA benefits include $0 copays for COVID-19 treatment, plus 14 days of home-delivered meals for those diagnosed with COVID-19.
UnitedHealth said that around 38% of its 6.5 million MA plan members would be enrolled in plans with $0 copayments, and all plans will offer telehealth visits with a $0 copay. In addition, all Aetna MA plans will offer an annual in-home assessment at no charge.
Clover Health Aims to Go Public
Finally, Clover Health Investments, Corp., which operates what it calls “next generation” MA plans in seven states, has announced plans to go public via a merger with Social Capital Hedosophia Holdings Corp. III, which is a special purpose acquisition company. The transaction values Clover at $3.7 billion and will provide up to $1.2 billion in cash for the newly constituted company.
Clover currently serves more than 57,000 MA members across 34 counties and is capturing an outsized share of market growth in its territories, according to the company.
The insurer plans to expand into an additional 74 counties and an eighth state in 2021, and recently announced a partnership with Walmart to make joint Clover-Walmart plans available to 500,000 Medicare beneficiaries in eight Georgia counties. Clover’s platform aggregates health data points such as claims, diagnostic information and medical chart data and then uses machine learning to provide physicians with insights and suggestions at the point of care.
By Jane Anderson