2021 Retiree Health Cost Estimates
We present our latest numbers on how much healthcare will cost retirees going forward.
This article provides a summary of 2021 telehealth benefits in the Medicare Advantage market and highlights some considerations looking forward. Using the Milliman MACVAT®, we analyzed all 2021 individual MA plans to determine the breadth of telehealth offerings available to beneficiaries, drilling down to the service category, or plan benefit package (PBP) level. In 2021, over 94% of plans will offer additional telehealth benefits, an increase of 36 percentage points from about 58% of plans in 2020.1 Using February 2021 enrollment, we estimate about 95% of beneficiaries enrolled in MA will have telehealth access in 2021.
Key takeaways from this analysis include:
Prior to the declaration of a national public health emergency (PHE) in response to the coronavirus disease 2019 (COVID-19) on January 27, 2020, traditional Medicare providers were restricted to offering telehealth services broadly through a strict set of guidelines2:
While many MA plans had additional flexibility beyond these geographic and originating site restrictions, many did not choose to expand telehealth services much before the COVID-19 pandemic. Prior to 2020, MA plans could have offered telehealth services, but all of them would have been considered a supplemental benefit, on which Medicare Advantage organizations (MAOs) likely were not willing to spend Part C rebate dollars. The priority is typically on high-value, visible supplemental benefits and neither health plans nor beneficiaries considered telehealth services part of this category. Beginning with the 2020 plan year, MA plans had the ability to offer “core” traditional Part B Medicare services through telehealth, no longer considering them a supplemental benefit,4 though only 58% of plans in 2020 chose to utilize this flexibility.5
On March 13, 2020, the administration issued the "Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak," which temporarily waives some of the restrictions preventing telehealth adoption for the duration of the PHE. This allowed the following changes to telehealth services in Medicare:
CMS reports that prior to the PHE, only 15,000 Medicare fee-for-service (FFS) beneficiaries received a telehealth service each week,8 suggesting nearly 500,000 FFS beneficiaries received a telehealth service in an average eight-month period. During the PHE, CMS’s preliminary data shows that, between mid-March and mid-October 2020, over 24.5 million out of 63 million FFS and MA beneficiaries, or nearly 39%, have received a telehealth service.9
CMS updated the list of services that are payable under the Medicare physician fee schedule on October 14, 2020, to include services that are considered covered under the PHE,10 adding 11 additional services to those that were previously considered eligible. On December 1, 2020, the physician fee schedule final rule added 60 additional telehealth services that will continue to be covered under Medicare after the PHE ends.11
Select the subcategory of data you would like to view using the buttons below. Using the Service Category feature, you can use CTRL and select multiple service categories of interest to view in the graphics below. Hover your mouse over any data item and it will bring up a callout box detailing additional information.
The interactive graphic demonstrates the telehealth coverage for each high-level service category and shows the percentage of the total number of members with telehealth coverage within each category. We rank the categories by the percentage of membership covered by each category. Primary care is offered most frequently in a telehealth setting at over 90% of membership covered, closely followed by two service categories that address mental health needs: nonphysician mental health services (86%) and psychiatric services (84%). Of the top five categories, outpatient substance abuse services is the least frequently available category, and covers about 63% of enrollees.
We reviewed the data categorized by SNP type, as summarized in the interactive graphic.
Figure 1 shows he number of total telehealth services covered, on average, by each SNP type. General enrollment plans on average cover the greatest number of services, with an average of 6.1 telehealth categories covered, followed closely by I-SNP and D-SNP plan types at 5.8 and 5.7 services, respectively. C-SNPs cover fewer services through telehealth, only about 4.6 categories on average.
The interactive graphic summarizes telehealth coverage data by broad plan type: HMO, HMO-POS, and PPO, including both local PPOs (LPPOs) and regional PPOs (RPPOs).
Figure 2 demonstrates HMO-POS plans on average cover about 6.6 categories via telehealth, while PPO and HMO plan types cover 6.0 and 5.8 categories, respectively.
Lastly, the interactive graphic summarizes telehealth coverage by 2021 overall star rating (to be used in the 2022 bid development).
Figure 3 shows plans with a 4.0 or lower star rating only cover an average of approximately 5.7 service categories via telehealth, whereas plans with a 4.5 or 5.0 star rating covered an average of 6.8 and 7.7 services via telehealth, respectively.
We also reviewed coverage of telehealth services in 2021 by plans that had a $0 premium or a non-$0 premium. There was not a discernible difference in the number of average services covered via telehealth, with these plans offering 5.8 and 6.0 services via telehealth, respectively.
To perform these analyses, we relied on detailed information on MA plan telehealth benefit offerings for 2021. We also used publicly available MA enrollment information from February 2021 to develop enrollment-weighted averages by the groupings noted above. The various groupings we analyzed include:
The values presented reflect plans available in 2021. We excluded Part A services from our service category analysis. The information released by CMS includes detailed cost-sharing information by PBP service category, enrollee premium, star rating, and enrollment by plan. We used the Milliman MACVAT (which summarizes the previously mentioned information released by CMS).
We included all individual plans, e.g., non-employer group waiver plan (EGWP) MA prescription drug (MAPD) plans. We excluded standalone prescription drug plans (PDPs), medical savings account (MSA) plans, Medicare-Medicaid plans (MMPs), Program for All-Inclusive Care of the Elderly (PACE) plans, Part B-only plans, and Cost plans.
While most MA plans quickly adapted to the COVID-19 pandemic by covering telehealth, there may be additional expansions of allowable telehealth services as we look toward the future, including Part A or additional supplemental benefits. Some items of consideration include:
Julia M. Friedman is a consulting actuary for Milliman, a member of the American Academy of Actuaries, and meets the qualification standards of the Academy to render the actuarial opinion contained herein. To the best of my knowledge and belief, this report is complete and accurate and has been prepared in accordance with generally recognized and accepted actuarial principles and practices.
The material in this report represents the opinion of the author and is not representative of the view of Milliman. As such, Milliman is not advocating for, or endorsing, any specific views contained in this report related to the Medicare Advantage program.
The information in this report is designed to provide an overview of the 2021 telehealth Medicare Advantage benefit offerings. This information may not be appropriate, and should not be used, for other purposes. I do not intend this information to benefit any third party that receives this work product. Any third-party recipient of this report that desires professional guidance should not rely upon Milliman’s work product, but should engage qualified professionals for advice appropriate to its specific needs. Any releases of this report to a third party should be in its entirety.
The credibility of certain comparisons provided in this report may be limited, particularly where the number of plans in certain groupings is low. Some metrics may also be distorted by premium and benefit changes in a few plans with particularly high enrollment.
In preparing our analysis, I relied upon public information from CMS, which I accepted without audit. However, I did review it for general reasonableness. If this information is inaccurate or incomplete, conclusions drawn from it may change.
1CMS (September 24, 2020). Trump administration announces historically low Medicare Advantage premiums and new payment model to make insulin affordable again for seniors. Press release. Retrieved February 18, 2021, from https://www.cms.gov/newsroom/press-releases/trump-administration-announces-historically-low-medicare-advantage-premiums-and-new-payment-model.
2CMS (March 2020). Telehealth Services. MLN Booklet. Retrieved February 18, 2021, from https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/TelehealthSrvcsfctsht.pdf.
4The full text of the final rule is available at https://www.federalregister.gov/documents/2019/04/16/2019-06822/medicare-and-medicaid-programs-policy-and-technical-changes-to-the-medicare-advantage-medicare.
6CMS (January 7, 2021). COVID-19 Frequently Asked Questions (FAQs) on Medicare Fee-for-Service (FFS) Billing. Retrieved February 18, 2021, from https://edit.cms.gov/files/document/medicare-telehealth-frequently-asked-questions-faqs-31720.pdf.
7CMS (April 10, 2020). Applicability of Diagnoses From Telehealth Services for Risk Adjustment. Retrieved February 18, 2021, from https://www.cms.gov/files/document/applicability-diagnoses-telehealth-services-risk-adjustment-4102020.pdf.
8CMS (December 1, 2021). Trump administration finalizes permanent expansion of Medicare telehealth services and improved payment for time doctors spend with patients. Press release. Retrieved February 18, 2021, from https://www.cms.gov/newsroom/press-releases/trump-administration-finalizes-permanent-expansion-medicare-telehealth-services-and-improved-payment.
10CMS (January 14, 2021). List of Telehealth Services. Retrieved February 18, 2021, from https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/Telehealth-Codes.
12CMS (May 13, 2020). Updated Guidance for Medicare Advantage Organizations. Retrieved February 18, 2021, from https://www.cms.gov/files/document/updated-guidance-medicare-advantage-organizations-5132020.pdf.
14For more information, see https://www.snpalliance.org/wp-content/uploads/2020/10/Friedman_Mike_Supplemental-Benefits-and-Risk-Score.pdf.
16More information about these plans is available at https://www.humana-medicare.com/BenefitSummary/2021PDFs/H5216239000EOC21.pdf and https://www.humana-medicare.com/BenefitSummary/2021PDFs/H5216240000EOC21.pdf