COVID-19, Drug Coverage Fuel Migration towards Medicare Advantage Plans
The COVID-19 pandemic and the increasing costs of prescription drugs are prompting more Medicare enrollees to switch from traditional plans to Medicare Advantage plans, a new study has found.
The study by MedicareAdvantagePlans.org found that 45% of poll respondents said they were switching to a Medicare Advantage health plan in 2021.
Nearly three in 10 respondents (29%) were attracted to Medicare Advantage plans because they cover prescription drugs. Also, 35% said they were drawn this year to the plans in order to take advantage of COVID-19-specific supplemental coverage, like free testing, care and prevention.
Medicare Advantage plans were already growing in popularity, but the pandemic has hastened the gravitation towards them as enrollees are hoping to have any coronavirus-related outlays covered with little or no out-of-pocket costs by a plan's supplemental benefits.
The study found that seniors are also increasingly drawn to Medicare Advantage plans to take advantage of the various other supplemental benefits that many of them offer.
In fact, supplemental benefits have become such an important selling point for Medicare Advantage plans that there is a 64% year-over-year increase in the number of these plans that are offering such benefits in 2021.
And as a result of the coronavirus pandemic, 34% of Medicare Advantage plans are offering COVID-19-related supplemental benefits for the 2021 policy year. In those plans, COVID-19 coverage includes:
- Testing,
- Care packages,
- Preventative services, and
- Free personal protective equipment.
Additionally, in a pandemic-related development, 27% of applicable respondents said they were attracted to Medicare Advantage plans for telehealth supplemental benefits. During the pandemic, use of telehealth visits with doctors has boomed as many people have been loath to go to the doctor out of fear of contracting COVID-19.
The number of Medicare Advantage Part D plans continues growing at an unprecedented clip, adding 1,500 plans nationwide in the past three years, according to the Centers for Medicare and Medicaid Services. Also, health care spending for Medicare Part D plans has been dropping, particularly for insulin, making it more attractive to beneficiaries.
Besides supplemental benefits, respondents said that they chose Medicare Advantage plans for their affordability.
Supplemental benefits
With supplemental benefits being a huge draw for Medicare Advantage plans, the survey asked respondents to rank the ones they consider the most important. Here are the top five for 2021 plans:
- Dental benefits: 62% (98% of Medicare Advantage plans offer it)
- Vision benefits: 52% (91% of Medicare Advantage plans offer it)
- Over-the-counter benefits: 38%
- COVID-19-related supplemental benefits: 35% (a study by Avalere found that one-third of Medicare Advantage plans will be offering them)
- Transportation (to and from medical appointments): 30%
"Medicare Advantage plans were already surging in popularity, but it looks like the coronavirus pandemic will further catalyze that surge because beneficiaries can likely have their COVID-19 related costs covered through specific supplemental benefits," the MedicareAdvantagePlans.org report stated.
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