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How Big is the Medicare Advantage Opportunity for In-Home Care?

By Stephen Tweed

“How Big is the Medicare Advantage Opportunity for In-Home Care?”

That’s one of more frequently asked questions as I have traveled around the USA this fall leading our Home Care CEO Mastermind Groups, and speaking at Home Care Association conferences and corporate meetings.  Every CEO and agency owner wants to know what the potential will be.

(If you are not familiar with this opportunity, read my Medicare Advantage Update from September 10, 2018)

To answer that question, I’ve interviewed a number of executives at large insurance companies that offer Medicare Advantage Plans.  I’ve also read as many articles and interviews as I could find on this topic.  Here are some facts and data I’ve uncovered:

  • There are about 3,700 Medicare Advantage plans being offered in 2019
  • According to a study by AARP, 3.4% of those plans (126) will offer In-home Support Services in 2019
  • 47.1% of those plans will offer “Nicotine Replacement Therapy” (1743 plans)
  • A study by Avalere shows that 107 MA Plans will offer In-home Support Services, and 1,653 will offer Nicotine Replacement Therapy
  • The decision to offer a specific supplemental benefit will be made at the local plan level
  • The decision to offer a specific supplemental benefit will be influenced by the plans ability to attract new members
  • The dollars to pay for these additional supplemental benefits will come out of the same pool used to pay for vision, dental, Silver Sneakers, and drug plan premium reductions.

Much of the conversation around the home care industry is focused on how home care companies can help MA plans reduce hospital admissions and other costs. The information we have uncovered shows that the decision to add benefits will be based more on the ability of the plan to sell more members into their plan.  It’s a sales focus rather than a cost saving focus.

Source:  AARP

Source: Avalere

While it is still too early to tell, our view is that the opportunity for home care companies to generate additional revenue from Medicare Advantage Plans in 2019 will be very limited.

As one MA Plan executive told me, “I think the trade press has spun this thing into much more than it really is.”

Another person close to this process asked, “Do Medicare beneficiaries in a local market want in-home support services?  Will they enroll in a health plan to get it?”

Another unknown that may CEOs have asked about is how will plans authorize home care services? How many hours a week will they pay for? What will their reimbursement rate be?  Great questions with no answers … YET.

We believe that this trend will catch on, and that MA Plans will increase their offerings of in-home care and other supplemental benefits in 2020 and beyond.  Every home care agency CEO should be watching this trend and paying attention to the Medicare Advantage Plans in your local market. At the same time, don’t take your eye off the ball in growing your private pay in-home care business.

Stay tuned to Home Care CEO Report, and we’ll keep you informed on this and other key Trendicators shaping the future of Home Care in America.

 

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