New competition among Midstate hospital systems is also carrying over into Medicare, as Pennsylvania’s major care providers are making a push in the region with their Medicare Advantage plans.
Enrollment is currently open for Advantage plans, insurance policies which receive state and federal Medicare funding, but are privately administered, and may come with an additional premium to the insurance company for benefits above and beyond what the basic government benefit offers.
Coming on the heels of its merger with PinnacleHealth, the University of the Pittsburgh Medical Center is offering Medicare Advantage plans in 15 additional PA counties for 2018, bringing total coverage to 51 counties, according to John Lovelace, President for Government Programs at UPMC.
“The increases are all in central and eastern PA,” Lovelace said. “We’re in Philadelphia currently, but are adding the collar counties, as well as the Midstate.”
Because of UPMC-Pinnacle’s rapid acquisition of healthcare infrastructure — four Midstate hopsitals, including the former Carlisle Regional Medical Center — the company is able to concentrate on more efficient managed care rather than the typical fee-for-service Medicare structure.
“These are all places where, because of the relationships with providers, we can offer really good value plans,” Lovelace said.
Many of UPMC’s offerings are zero-premium, zero-deductible — meaning they cost nothing beyond the regular Medicare schedule, relying on UPMC’s internal efficiencies to offer added benefits to patients while bolstering the company’s cash flow.
Likewise, Highmark Vice President for Senior Markets Ellen Galardy said the Medicare market has been one of the most stable for the state’s largest insurer, which is expanding its own offerings.
“The expansion of our books has been strong in central PA,” Galardy said. “The Medicare market has been a really stable market in the past couple of years.”
Like UPMC, Highmark continues to offer zero-cost plans, as well as low-cost options that give benefits beyond basic Medicare for preferred providers – one of the most popular PPO Advantage plans is now only $27 per month, for instance, Galardy said.
Likewise, Lovelace said UPMC has seen one of its more premium plans drop $214 per month in premiums.
“The trend of growth has not been horrifying in the last several years, and in a lot of areas we’ve been able to reduce out-of-pockets costs,” Lovelace said.
This will hopefully continue as long as adding more participants to the Medicare Advantage rolls furthers the law of averages. In the Midstate, there is considerable headroom for this — the center of the state has Advantage plan penetration of only around 25 percent, Lovelace said, while UPMC’s core Western PA markets have close to 60 percent.
Nationally, about one in three Medicare recipients go through an Advantage plan, Galardy said.
“We still see growth year over year and I think that will continue for the foreseeable future,” she said.