Will “Medicare Advantage” Drive a Health Tech boom in the US?

Medicare Advantage (MA) has undergone significant changes within the last few years enabling it to cover supplemental and non-medical benefits such as home care. Centres for Medicare & Medicaid Services’ (CMS) efforts to expand MA’s coverage is not only helping traditional players in the market but is also setting the stage for disruption.

According to CMS, there has been a significant increase in MA uptake and enrollment is projected to increase to an all-time high of 24.4 million beneficiaries from the current enrollment of 22.2 million in 2020.

As more and more insurers are able to benefit from MA, they continue to add innovative products and services to their coverage offerings. By 2020, beneficiaries will have more plan choices, about 1,200 more than those available in 2018.

With enrollment increasing, premiums going down, and plan choice expanding; Medicare Advantage is not only benefiting the senior population but it is also opening opportunities for non-traditional companies to enter the senior healthcare space.

This means that start-ups and technology companies can now offer innovative solutions that can address the needs of seniors and are covered under the MA plans.

So how exactly has Medicare Advantage evolved?

So, MA basically works as an alternative to traditional “fee-for-service” (FFS) Medicare where the government paid providers to charge a fee for each procedure or service. With MA, the government gives insurers more freedom by paying one monthly sum per member to manage a range of different health expenses.

Not only that, but new MA plans also cover non-medical offerings that can help improve or maintain the health or overall function of seniors. The inclusive plans are designed to meet the diverse needs of seniors. The idea is to enable them to lead healthy lives, with the focus being on preventive care.

These supplemental benefits include services such as in-home support, in-home palliative care, non-medical transportation, and even support for family caregivers.

So what’s the impact on the market?

These changes were put in place about four years ago and now the impact can really be seen. Where MA plans saw little to no growth periodically for a while, once these changes were introduced MA plans have seen staggering growth. According to CB Insights, MA plans increased 34% in the last two years to 2,734, which means that an enrollee is now able to choose between 24 plans in 2019, compared to 19 two years earlier.

Not only has there been an increase in the plans but the population eligible for MA is also expected to grow significantly. Only within 5 years, as the Baby Boomer generation has aged, roughly 10 million more people now qualify for medicare. This number will only increase in the coming years.

As insurers and other partner healthcare organizations, such as home care agencies and physician groups, look to offer more options to seniors than they previously did; they need to also keep the costs of new offerings in perspective.

This is why all the stakeholders, specifically insurers, are looking for ways to cater to the growing market by leveraging technology. As this can enable them to lower costs while at the same time increase benefits.

This is where technology innovation comes in..

As the stage for technological innovation has been set, many large, as well as small technology firms, are focusing on research and innovation to solve the problems facing the senior healthcare market today.

We can see that technology giants such as Apple and Amazon are exploring opportunities in this space and investing in wearables as well as applications. Amazon has recently launched a primary care service for its employees, called Amazon Care which offers telemedicine checkups, at-home or in-office doctor’s visits and prescription deliveries all through one platform. Though it is not related to MA but something similar for senior care space can be a huge step forward when it comes to virtual care.

Additionally, we are also observing that traditional health-care players such as including pharmaceutical organizations and home healthcare companies are collaborating with technology companies to help modernize their previously traditional offerings.

Similarly, start-ups, such as LocateMotion, are working on IoT devices and AI solutions to gather data that can be used to improve personalized and preventive care. This data, especially when made available in real-time can help deliver prompt care, derive insights, and deploy medical resources if needed.

So what’s next?

As the Governing factors in preventive care in medicare, it is not only creating ease for seniors but also achieving the goal of innovation in a sector that has previously been very traditional.

Combining the multi-decade expertise of companies that have thrived in the sector for decades with the technological prowess of technology companies, can help create truly unique offerings that have the potential to change how the industry delivers care and benefits to seniors.

Simply put, with technological innovation comes cost savings, quicker response times, and effective care.

#ageinplace #seniorliving #staytogether #AI #5G #IoT

Written and Researched by Nauman Jaffar, Founder / Advisor, LocateMotion and Erum Ansari, PR & Content Manager, LocateMotion