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January 18, 2017

Lembo pushes Medicare Advantage change

By John Stearns

Connecticut is preparing Friday to issue a request for proposal (RFP) that could potentially save the state “tens of millions” on retiree health costs by implementing a Medicare Advantage plan, Comptroller Kevin Lembo announced today.

Lembo said the proposal would allow retirees to retain the same health benefits and programs, while saving money. He didn’t specify exactly how much could be saved.

The change would be subject to approval by labor unions and management.

“The mission continues: do better work for less cost,” Lembo said in a statement. “Where health care is concerned, cost and quality are not at odds. A switch to a Medicare Advantage plan will not only save state costs, but actually improve the quality and efficiency of care for state retirees.”

Lembo added, “Above all else, I’m going to stick to my own rule once again, which is to let data drive the decision making. The data, the research and the actuaries have demonstrated the benefits of using a Medicare Advantage plan: drops in emergency room use, drops in inpatient days, drops in readmission rates – all while increasing medication adherence, preventive screening rates and all of the usual benefits of actively managing care for a population.”

Public employee health plans in other states that have recently adopted a Medicare Advantage plan have realized significant cost savings, Lembo said.

About 49,000 Medicare-eligible retirees and dependents are covered under the Connecticut state health plan. Currently, when retirees become eligible for Medicare, they are required to enroll in a Medicare plan. When those Medicare retirees utilize health care, Medicare pays about 80 percent of costs and the state pays the rest.

The state now can only estimate at the beginning of each year what healthcare costs will be. By switching to a Medicare Advantage plan, an insurance carrier would contract with the state and, in the process, guarantee a fixed and predictable annual cost to deliver retiree health benefits, Lembo said.

Medicare Advantage plans, in addition to guaranteeing the state a predictable annual cost, are often more affordable for several reasons, including a higher federal reimbursement for such plans, and increased clinical care coordination and management at all points of service, such as physicians, facilities and home care.

These programs include wellness, prevention and management programs for acute illnesses, chronic conditions and advanced illnesses.

Medicare Advantage plans typically include dedicated claims and customer service teams for state group plans that are trained to support a senior membership, and the plans are designed to identify and connect retirees with the most appropriate clinical programs through predictive modeling and health risk assessments, Lembo said.

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