Demystifying
Medicare Advantage

Significance of benefits and other factors on enrollment gain

December 13, 2021       Whitepaper

Multiple factors come together to form a successful plan. While some factors strongly correlate to net enrollment gains, other factors serve as a value add to make plans more attractive to beneficiaries. Therefore, identifying these factors and correctly basing them as Significant or Insignificant factor is crucial in designing attractive plans and improving enrollment gains.

The various attributes have been segmented into three levels –

  1. Significant – Important factor in any given region which have a high correlation with enrollment gain.
  2. Insignificant – Factor that has low correlation with enrollment gains but can be used as a value add to improve plans.
  3. Table Stakes – Benefits present in nearly all the existing plans. Can be considered the bare minimum a plan must offer to be regarded as a competitive plan.

Scope –

This study focuses on Non-SNP, MAPD plans for HMO & PPO Plan Types.

Methodology –

The results of this study were derived from a combination of black box and explainable AI (xAI) models. Random forest, neural networks, and multiple regression, along with regularization techniques like Lasso and Ridge regression, were some of the methodologies used to develop the significance bucketing AI/ML models. The results of these complex algorithms were then used as inputs for xAI methodologies such as LIME (Local Interpretable Model Agnostic Explanations). Finally, the results were verified using a sound business understanding foundation.

Fifty-four factors comprising of Original Medicare benefits, Optional benefits, and Cost & Other factors were used as inputs for the significance bucketing AI/ML models. While all 54 factors were segmented as Significant, Insignificant, or Table Stakes, this whitepaper focuses only on Optional benefits, and Cost & Other factors. With Original Medicare benefits being included in each plan irrespective of its significance towards net enrollment gain, those benefits were not considered in this analysis. However, evaluation of those benefits is equally important, and the influence is measured for the variables of the benefit, such as member cost, which was not considered in this whitepaper.

Results –

The results found below are the result of an in-depth, nationwide analysis of each factor, which have been rolled up to the nine census regions of the United States. Some factors are broken by plan type (HMO & PPO) to demonstrate how the significance, or influence of variables, can vary between the two segments, while other factors are shown at an overall level when the two had similar results.

Premium

Premium has always been one of the top cost factors, and zero-dollar premium is currently dominating the market. All three cuts of plan type (HMO, PPO, and combined HMO & PPO) across all nine regions saw high growth in the zero-premium segment. In fact, there were very few regions in which PPO had premium identified as an Insignificant factor. In addition, even though zero-premium saw much higher net enrollments, the $1-$20 premium plans saw a higher net enrollment per Bid ID in some regions.

Key Takeaways -

Annual Drug Deductible

Zero-dollar drug deductible plans have gained the most enrollments, both at an overall and HMO level, and is generally seen as a Significant factor. For HMO plans, zero drug deductible has attained the highest net enrollment across the board. However, non-zero plans have had higher net enrollments per Bid ID in a few regions. PPO plans, on the other hand, presents a very different story. Zero-dollar has the highest net enrollment overall and dominate most regions in terms of net enrollment and net enrollment per Bid ID. The most popular non-zero buckets are the $101-$200 and $201-$300 segments. One region, Mountain, has $300 plus as the dominant bucket for both net enrollment and net enrollment per Bid ID. Because of such high variance in dollar preference, annual drug deductible is an Insignificant factor for PPO.

Key Takeaways -

MOOP – Maximum Out of Pocket

MOOP presents as an impactful plan attribute, however, HMO and PPO behave very differently and the significance is unique to each region. HMO plans, for example, mostly favor MOOP costs around the $2,000 to $6,000 range. It’s clear from the data that beneficiaries prefer a lower MOOP in HMO plans as many regions have gained max net enrollment on the lower end of the scale ($2,000 to $4,000), with some being very low ($0 to $2,000). The only outlier is the New England region, where the eligible preference lands at $6,000+ plus. On the other hand, PPO plans favor the $6,000 plus range, with most regions having gained max net enrollment in that higher end of the spectrum. East North Central, Mountain, and West North Central are the only outliers where a MOOP of $2,000 to $6,000 was preferred. Overall, the data suggest that beneficiaries aren’t deterred from a higher MOOP when purchasing PPO plans.

Key Takeaways -

Plan Type

For years HMO plans have dominated enrollments in the Medicare Advantage market. However, with the current rise of PPO over the past few years, there is a shift in the status quo. Between HMO and PPO plans, fewer PPO plans have captured a larger number of net enrollments, indicating that PPO is becoming the new standard preference. Specifically, zero-dollar premium plans. Therefore, Plan Type, while currently Insignificant, in time, will become a Significant factor favoring zero-dollar PPO plan type.

Key Takeaways -

Drug Benefit Type

A Defined Standard drug benefit type is identified as the bare minimum drug coverage a plan must provide. In many ways it’s the type of plan that other plans are judged against. From the data it’s quite obvious that both beneficiaries and payors prefer a more robust drug coverage, with 97% of all plans being EA (Enhanced Alternative), capturing 98% of net enrollments. Hence, drug benefit type identifies as Insignificant with nearly no variance in the data.

Key Takeaways -

Giveback

The giveback benefit, also known as Part B premium reduction, is when a Medicare Advantage plan reduces the amount you pay towards your Part B monthly premium. While there are a low number of plans that provide giveback, there has been an uptick in recent years. Currently, only 6% of plans offer giveback, capturing 11% of the net enrollments. Hence, giveback often shows as Insignificant due to a lack of consistent correlation in the market. As giveback continues to rise, we expect this to become a significant driver in some regions.

Key Takeaways -

Star Rating

As expected, most plans with a star rating of 4 and higher captured the highest enrollments. However, an increased number of net enrollments went towards new plans with no star rating, indicating that other attributes within the plan design factor towards higher enrollments. Due to this, statistically, star rating continues to show as Insignificant. However, star ratings, when known, are a vital indicator towards enrollment. When analyzed at the state or county level, where new plans have less impact, stars often presents itself as more significant versus the rolled up regional or national analysis.

Key Takeaways -

Eye Wear

Eyewear inclusion has grown by nearly 20% in the past five years. Present in 71.6% of plans in 2017, it has risen to 92.4% in 2021. PPO plans saw far stronger growth than HMO, increasing from 61.4% in 2017 to 90.7% in 2021. The growth of this benefit as resulted in it becoming Table Stakes in every market. In fact, with such a high beneficiary preference, Original Medicare is strongly considering adding Eye Wear as a mandatory benefit.

Key Takeaways -

Emergency

Worldwide emergency is one of the benefits that has been present in most of the plans across the county for the past five years. It was present in 95.4% of the plans in 2017 and 97.5% of plans in 2021. Therefore, this benefit is identified as a Table Stake and something that every plan should offer.

Key Takeaways -

Eye Exam

Eye exam has always been one of the top benefits in the market for the past five years. It was present in 95.5% of the plans in 2017 and is present in 98.9% of plans in 2021. This benefit is widely considered Table Stake and not including it will undoubtedly lead to enrollment loss. Similar to eye wear this benefit, it may soon be part of Original Medicare.

Key Takeaways -

OTC – Over the counter

OTC is one of the fastest-growing benefits, increasing in offering from 33.1% in 2017 to 75.9% in 2021. OTC is a Table Stake for HMO plans as there is no region where plans without an OTC benefit gained net enrollments. However, PPO plans tell a different story. Overall, PPO plans with OTC have captured the most net enrollments, however, a dive into each region shows multiple where plans not offering an OTC benefit have also gained net enrollments. Due to this, some regions for PPO identify this benefit as Insignificant. Diving deeper into the allowances, HMO plans have an average allowance of $300 per annum, while PPO plans have an average allowance of $224.

Key Takeaways -

Hearing Aids

While both HMO and PPO witnessed continuous inclusion growth in the past five years; PPO grew by 42.7%, from 43.7% in 2017 to 86.4% in 2021. At an overall level, this benefit has grown from Significant to a Table Stake over the past four years and not offering this benefit will undoubtedly have a negative effect enrollment growth.

Key Takeaways -

Preventive Dental

With a 15% growth in the past five years, preventive dental has always remained one of the top benefits in terms of inclusion. From 77.8% in 2017 to 92.5% in 2021, this benefit has grown to become a Table Stake, and presents a major influence on enrollment growth potential across all regions.

Key Takeaways -

Comprehensive Dental

Now present in over 81% of the plans, comprehensive dental has seen a 33% growth in the past five years. The results of our xAI analysis identifies this benefit is Significant across the board, and Table Stake in some regions. With a continued increase in inclusion, Comprehensive Dental is set to become a Table Stake across all regions within the next couple years. With such a strong growth rate, Payors have identified Comprehensive Dental as a crucial benefit for beneficiaries, further supported by our analysis.

Key Takeaways -

Meals

Witnessing a 38% growth in the past five years, Meal Services have grown from 17.4% in 2017 to 55.3% in 2021. However, the results of the xAI analysis identifies this as an Insignificant benefit in all regions but one. This indicates that even though the Meal benefits have grown substantially, beneficiaries generally aren’t influenced in plan selection by the inclusion.

Key Takeaways -

Transportation

Overall, Transportation has grown by nearly 17% in the past five years, present in 19.4% of the plans in 2017 and 36.8% of plans in 2021. HMO plans mainly drive this growth compared to PPO plans with 48% and 15.8% inclusion, respectively. The results of the xAI analysis shows this benefit as Insignificant across the board, indicating that even though the Transportation benefit has grown nationally, it has little to no influence on plan selection for the majority of beneficiaries.

Key Takeaways -

Acupuncture

Driven mainly by HMO, Acupuncture has grown in inclusion by nearly 12% in the past five years, at an overall level. It was present in 10.9% of the plans in 2017, growing to nearly 23% of plans in 2021. However, even with growth nationally, this benefit is identified as Insignificant across all regions with little to no identifiable influence on net enrollment gain.

Key Takeaways -

Coverage Gap

Identified as Insignificant in our xAI analysis, 54% of the plans without Coverage Gap captured 69% of the enrollments in 2021. For HMO, the split between the percentage inclusion in plans and the percentage enrollment capture is nearly equal but in favor of without, while for PPO, 56% of the plans without Coverage Gap captured 82% of the enrollments.

Key Takeaways -

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