2024 has been a year of changes and unknowns for health plans. From the impending expiration of the Advanced Premium Tax Credit (APTC), more states transitioning to State-Based Marketplaces (SBM), to adjustments in Medicare Advantage (MA) margins, health plans are on alert. These shifts represent not just regulatory and economic challenges, but also opportunities for health plans to refine their strategies in response to evolving market conditions.
To retain members and stay in-line with regulations, new moves are needed. My suggestions follow:
Preparing for the APTC Expiration and Informing Members
The looming expiration of the APTC at the end of 2025 has many health plans concerned. According to Congressional Budget Office, nearly all marketplace enrollees will face higher premium costs and an estimated 3.8 million members will lapse.
To mitigate the impact, health plans should consider implementing these five proactive strategies now to improve member retention rates:
- Proactive Communication: Engage with members well ahead of the APTC expiration to inform them about potential changes in their premium structures, specifying how and when their monthly payments will change.
- Enhanced Support: Temporarily increase the budget for customer-facing representatives to handle the expected surge in member inquiries and concerns.
- Digital Tools: Invest in self-service technologies to make billing updates easier for members. Dive into your data to understand how those most at risk prefer to interact with their coverage.
- Custom Grace Periods: Implement tailored grace periods to help retain members struggling with financial adjustments.
- Alternative Coverage: Regardless of efforts, the APTC expiration will render Marketplace coverage unaffordable for some. Offering alternative coverage options, such as the Individual Coverage Health Reimbursement Arrangement (ICHRA), provider-sponsored coverage, and Medicare Advantage, can help keep affected members insured.
Enrollment and Operational Updates from Virginia’s Insurance Marketplace
Open Enrollment (OE) 2024 marked the start of Virginia’s own SBM. As of the 2024 plan year, 19 states operate SBMs, with Georgia, Oregon, and Illinois also planning transitions.
I was able to attend the Virginia Association of Health Plans (VAHP) 2024 conference and hear key updates on Virginia’s Insurance Marketplace. Here’s what I found most impactful:
- Enrollment Figures: Approximately 343,000 individuals re-enrolled, complemented by 57,000 new enrollees. Additionally, dental plans expanded to cover 48,000 individuals. Virginia saw an over 15% increase in Marketplace enrollments from OE 2023 to OE 2024. As enrollments continue to steadily increase, SBMs need to be prepared to scale.
- System Enhancements: Significant upgrades have been implemented to enhance user experiences. These include the introduction of a new provider directory, facilitated enrollments, and an agent mobile app.
- Enrollment Processing: Virginia’s Insurance Marketplace is leveraging data integrations with the Virginia Department of Taxation to prepopulate subscriber applications. This initiative aims to enhance applicant data accuracy and streamline the enrollment process.
Medicare Advantage: Current Challenges and Future Directions
Medicare Advantage programs are confronting a unique set of challenges this year. Despite facing tighter financial margins, MA plans are attractive due to their growth potential. However, capitalizing on this potential requires substantial improvements in operational efficiencies, especially concerning STAR ratings and risk adjustments.
Data suggests that MA plans will see an estimated $4.7 billion decrease in annual revenues following a 1.12% effective rate cut for 2024. This reduction underscores the need for MA plans to refine their business models and optimize their service delivery to remain competitive and profitable in a challenging market landscape. As MA enrollments continue to rise, many health plans are preparing to outlast early market swings.
As we adapt to these evolving circumstances, the strategies we implement today will significantly shape the future of healthcare policies and practices. Navigating the complexities of healthcare, particularly within state-specific contexts, remains crucial for health plans aiming to enhance service delivery and maintain compliance with regulatory requirements.
