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Unused Supplemental Benefits May Drive Duals to Switch MA Plans, Finds Deft Study
by Lauren Flynn Kelly
New data from Deft Research suggests that Medicare Advantage plans continue to struggle with retaining their dual eligible members, mainly because of problems associated with the supplemental benefits offered to address social needs. Published on June 29, Deft’s 2023 Dual Eligible Retention Study found that duals switch plans at about twice the rate of other MA beneficiaries. And while Deft says duals “absolutely depend” on supplemental benefits such as dental care, grocery allowances and utility assistance, duals’ reported issues with their current health coverage often stem from these enhanced offerings, whether they be a source of confusion or just prove difficult to use.
Duals rely on supplemental benefits
by Lauren Flynn Kelly
New data from Deft Research suggests that Medicare Advantage plans continue to struggle with retaining their dual eligible members, mainly because of problems associated with the supplemental benefits offered to address social needs. Published on June 29, Deft’s 2023 Dual Eligible Retention Study found that duals switch plans at about twice the rate of other MA beneficiaries. And while Deft says duals “absolutely depend” on supplemental benefits such as dental care, grocery allowances and utility assistance, duals’ reported issues with their current health coverage often stem from these enhanced offerings, whether they be a source of confusion or just prove difficult to use.
Duals rely on supplemental benefits
- An estimated 30% of dual eligibles make a coverage change over the course of a year, and 8% of duals have already made a switch this year as of mid-May, according to Deft. By contrast, Deft in its 2023 Medicare Shopping and Switching Study observed that switching by “full pay” (i.e., those receiving no extra help) MA beneficiaries shot up to 15% this past Annual Election Period, compared with 12% in the prior two periods.
- “For dual eligibles, the main reasons why they pick their plan are because this plan has more supplemental benefits, and it has higher dollar allowances they can spend on something. It’s a different mindset when you’re elderly and very low income,” compared with non-dual MA beneficiaries who may be more concerned with what drug is covered or what hospital is in the plan’s network, remarks George Dippel, president of Deft.
- One-fifth of duals surveyed by Deft said they are confused about how to use their supplemental benefits, and about 40% reported receiving any materials about how to use them.
- “The sales and marketing folks at a health plan know, if we’re going to attract dual eligibles, we have to have a lot of supplemental benefits. And we have to have big dollar amounts in those purses, because our competitors have it, and this is what dual eligibles focus on,” says Dippel in an interview with AIS Health. “But then you have the finance folks who say, if we have every benefit in here, and everybody spends every dollar, we’re going to go broke…So that’s the tug of war.”
- He likens supplemental benefits to the concept of “breakage” in retail, referring to the extra margin gained when consumers forget to fully exhaust gift cards or fail to mail in forms needed to process rebates. But in MA, breakage takes the form of supplemental benefit “purses,” and if they’re not using those purses, they’re not as likely to stay with the plan. “How about we have the right benefits, we have reasonable purses, and we help these people get the benefits they can out of that amount, and everyone wins?” suggests Dippel.
- Deft also found that when payers are able to resolve their dual members’ utilization issues, they self-rate as highly likely to renew their coverage. With almost 50% of duals reporting that their insurance reporting that their insurer’s inability (or unwillingness) to resolve their problems worsened their opinion of the company’s overall brand, there’s plenty of room for improvement.
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