Higher medical spending could be the new normal in Medicare Advantage — and insurers will have to find a way to respond, McKinsey analysts wrote.
The consulting firm on March 13 published its list of five key trends insurers in the Medicare Advantage space need to consider in the next year.
Here are McKinsey's top trends for 2024:
- Product reset: Insurers may become more selective about how many plans and benefits they offer, as medical costs rise and policymakers reconsider the value of supplemental benefits. Plans may need to offer a "concise narrative" to the beneficiaries they are trying to attract, rather than trying to be all things to all people.
- Aging population: As the Medicare population ages and the healthcare worker shortage persists, new care models will be needed to address higher-acuity patients. A key question here is if an influx of patients with higher needs will push more payers toward vertical integration, McKinsey analysts wrote.
- Star ratings: Plans will need to adjust to tougher star rating cut points from CMS, according to McKinsey. Insurers will also need to shift their focus to quality outcomes, as CMS will deemphasize beneficiary satisfaction ratings in its star ratings.
- Opportunities in SNPs: Special needs plans and dual-eligible special needs plans are opportunities for growth, but insurers will need to make proactive moves to prepare for new contracting strategies from states for D-SNPs.
- Constraints on brokers: Increased regulation of third-party marketing and broker organizations may lead insurers to upscale their own marketing and sales efforts, according to McKinsey.
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