Health Plan Weekly

More than 1 in 5 adults without access to a vehicle or public transportation missed or skipped a health care visit in the previous year, according to a recent Urban Institute study.

Using June 2022 data from the Urban Institute’s Health Reform Monitoring Survey, the researchers found that overall, about 5% of non-elderly adults reported forgoing medical care due to transportation barriers in the previous year. The experience was more common among Black and Hispanic/Latinx adults, individuals from low-income families, people with disabilities and those using public insurance.

Primary care practitioners are working through dramatic change in the business of their profession: More PCPs than ever are working under capitation or risk-based reimbursement arrangements. That trend accelerated as physician employment increased during the worst years of the COVID-19 pandemic, with many doctors selling their independent practices to private equity, insurers or hospital systems.

Although risk-based reimbursement is well established in government books of business, the commercial market is adopting risk-based primary care payment using lessons learned in Medicare Advantage and Medicaid managed care. The transition to commercial risk-based compensation was the subject of a May 23 panel convened by the Primary Care Collaborative, a primary care policy group.

The higher the market share of the leading insurer in a state, the lower the negotiated prices were that the insurer paid to hospitals, according to a new study published in Health Affairs, which used market concentration data from 2019 and payer-specific negotiated prices from 1,446 acute care hospitals as of the end of 2021.

The level of insurer market concentration varied significantly across the nation. In states like Alabama and Alaska, the dominant insurers held a near-monopoly position with market share over 71%, while the leading health plans in states like New York and Wisconsin faced a more competitive environment. The study found that market leaders in the most concentrated markets paid 15% less to hospitals than those in the least concentrated markets.

During a May 17 hearing, PBMs and merging hospitals were in the crosshairs of a U.S. House of Representatives subcommittee considering policies to slow the growth of health care prices. Although independent experts called as witnesses agreed with members’ assertions that PBMs, hospital mergers, and hospital purchases of independent physicians exacerbate high health care costs, the experts also pointed out that prices are already too high, and preventing hospital mergers or reining in PBMs will do little to reverse decades of price growth.

The hearing, titled “Why Health Care is Unaffordable: Anticompetitive and Consolidated Markets,” was convened on May 17 by the Health Subcommittee of the House Ways and Means Committee. The hearing piled on to the growing momentum across Congress that seems likely to result in more stringent PBM regulations, with majority Republicans tipping support for policies that would rein in PBMs.

The national uninsured rate in 2022 was 8.4%, down from 9.2% in 2021 and 9.7% in 2020, according to the Centers for Disease Control and Prevention’s National Health Interview Survey. In a May 18 research note, Citi analyst Jason Cassorla noted that the lower uninsured rate is “not surprising” given efforts to make the Affordable Care Act marketplaces more affordable and accessible, such as elongated special enrollment periods and enhanced premium subsidies. Another likely factor is the Medicaid continuous enrollment requirement that was in place until April 1, 2023, due to the COVID-19 public health emergency. Since Medicaid eligibility redeterminations have now resumed, “we would expect upward pressure on the uninsured rate” going forward, Cassorla wrote, but he added that a “partial offset” would come from newly Medicaid-ineligible individuals signing up for ACA marketplace coverage.

Racial disparities in health care have become a top policy priority since the start of the COIVID-19 pandemic, which disproportionately killed people of color, particularly Black and Native American people. The Biden administration made closing racial health gaps a key part of its pandemic response — and health insurance-related policy changes going forward. One new report from the CMS Center for Medicare & Medicaid Innovation (CMMI, or the Innovation Center) says that the administration has made “meaningful progress” in closing racial disparities, and a review of health insurer equity efforts from the New York United Hospital Fund (UHF) says that “many…carriers have made substantial commitments to the communities they do business in,” but both conclude that insurers and policymakers must do far more to eliminate racial health gaps.

Although multiple states have set up some version of a public option — a government-established insurance plan — on their Affordable Care Act exchanges, two researchers are striving to convince policymakers to consider a public option program in California that they say will more effectively enhance competition and bring down premiums.

The “secret sauce” of the proposal is the state’s existing “delegated model,” in which provider organizations take on some or all the financial risk associated with delivering health care services, according to Stephen Shortell, Ph.D., a health policy professor at University of California, Berkeley.

In the space of a week, multiple PBM-regulating bills have advanced in House and Senate committees that address a variety of concerns about how the industry does business. However, industry observers say it’s still unclear what reforms will prevail in the push to overhaul a sector that is increasingly bearing blame for creating a byzantine and expensive drug pricing system.

“It’s one of those things where it’s not a burning issue that you can poll and constituents go crazy about, but the issue of PBMs and what the heck are they — and the feeling that there is something potentially improper about the way they’re doing [their job] — may be enough to get legislation [passed],” says James Shehan, chair of the FDA regulatory practice at the law firm Lowenstein Sandler LLP.

As more employers shifted to self-funded health plans, the stop-loss insurance segment expanded to $26 billion in 2021, with a growth rate exceeding 10% in each of the past five years, according to an A.M. Best report. There has been a notable uptick in employers with fewer than 1,000 employees choosing stop-loss insurance since 2018. Although the medical loss ratio for stop-loss has been lower than for group commercial coverage over recent years, it rose from 81.5% in 2020 to 85.0% in 2021, largely due to a year-over-year increase in stop-loss claims from major insurers and several other insurers that had claims for the first time in 2021.

Following a hearing on insulin costs in which senators from both political parties grilled PBM executives, the Senate Health, Education, Labor and Pensions (HELP) Committee approved the Pharmacy Benefit Manager Reform Act of 2023 (S. 1339). The legislation would ban spread pricing, introduce a host of transparency requirements, and compel PBMs to pass on rebates and fees they collect to their health plan clients, Pink Sheet reported. However, HELP Committee Chairman Bernie Sanders (I-Vt.) would not allow a vote on an amendment that would prohibit PBMs from charging administrative fees based on a percentage of a drug’s list price, as that amendment did not yet have a Congressional Budget Office score. The measure passed on an 18-3 vote with Sen. Rand Paul (R-Ky.), Sen. Mitt Romney (R-Utah) and Sen. Tommy Tuberville (R-Ala.) voting no.