By John Ruffier
Since the 1970s, Medicare beneficiaries have had the ability to receive Medicare benefits through private health plans (mainly Health Maintenance Organizations) as an alternative to the traditional Medicare program administered by the federal government. The Medicare Modernization Act of 2003 updated the program’s name to its current moniker: “Medicare Advantage.”
While the majority of people on Medicare remain in the traditional, government-run program, as of 2017 roughly 1/3 of those receiving Medicare (totaling 19 million people) were enrolled in Medicare Advantage plans. Further, Medicare Advantage plan enrollment is growing rapidly, with a tripling of Medicare Advantage participants in the 12 years between 2004 and 2017.
In April 2018, the Centers for Medicare & Medicaid Services finalized a policy allowing Medicare Advantage plans to cover certain non-skilled in-home care as supplemental benefits, paving the way for Medicare Advantage to become a payer for senior living services. In the wake of this policy change, several insurers that offer MA plans expressed a willingness to work more closely with senior living providers – including Anthem and Humana.
Ultimately, the benefit to senior housing owners and operators is still unclear as this new benefit rolls out, but a recent article in Senior Housing News suggests a surprising possible consequence: the entry of insurance companies into the senior housing in order to offer Medicare Advantage directly to customers. While only time will tell if such a tectonic change will occur, there is no doubt that the change to rules governing Medicare Advantage will affect senior housing communities.