Health Plan Weekly

Average ACA Benchmark Plan Premium Continues to Drop in 2022

The national average premium for the second-lowest-cost silver plan, or benchmark plan, sold through the Affordable Care Act exchanges is $438 per month in 2022, a 1.8% drop compared to 2021, according to an Urban Institute analysis. Average benchmark premiums, by state, ranged from $309 in New Hampshire to $766 in West Virginia. The premium variation was associated with the type and number of insurers participating in a region. The presence of a Medicaid insurer led to lower benchmark premiums. In 2021, the benchmark premium in a rating region with only one insurer was $189.5 higher per month than in regions with five or more insurers.

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© 2024 MMIT

News Briefs: Humana Will Divest Kindred Divisions

Humana Inc. will spin off subsidiary Kindred at Home’s hospice and personal care divisions, with private equity fund Clayton, Dubilier & Rice taking majority ownership in exchange for $2.8 billion cash. Humana will retain a minority share in the new hospice company, which the deal values at $3.4 billion. David Causby, president and CEO of the divisions in question, will lead the new firm. “We are excited by the new strategic partnership structure with Humana and look forward to working closely with CD&R to pursue growth,” said Causby.

Former CMS Administrator Leslie Norwalk resigned from Centene Corp.’s board, citing “the governance process surrounding a recent important decision.” Norwalk in her resignation letter said that process “fell egregiously short of what I and a number of other Board members considered appropriate for making an informed decision.” Norwalk added that the board did not debate the move in question. Her resignation comes shortly after the death of longtime CEO Michael Neidorff, whom Sarah London replaced in March.

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© 2024 MMIT

Insurers, Private Equity Firms Are Buying Up Home Care Providers

Health insurers are taking over home health care providers: Most notably, the two largest Medicare Advantage health insurers, UnitedHealth Group and Humana Inc., have each moved to acquire sizable home care providers in the last year. Health care insiders tell AIS Health, a division of MMIT, that home health deals by insurers will become more frequent as plans hope to avoid reimbursing long-term hospital stays by treating members at home — even as private equity firms make inroads into the home health space with an eye toward increasing margins across the industry.

UnitedHealth on March 29 said it plans to spend approximately $6 billion in cash to purchase LHC Group, Inc., a home health care company. In August 2021, Humana completed its acquisition of Kindred at Home, which it has since begun to fold into its CenterWell provider brand. In a recent earnings call, Humana CEO Bruce Broussard said that the carrier is looking for still more home care providers to purchase.

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© 2024 MMIT

UnitedHealth Sees Sunny 1Q, Says Deferred Care Impact Is MIA

UnitedHealth Group on April 14 reported first-quarter 2022 financial results that beat Wall Street expectations and led the health care behemoth to raise its full-year earnings guidance. The firm also offered insights into health care utilization trends that could serve as good news for the entire industry, as executives said they still have not seen evidence of members’ health conditions deteriorating because of care deferred during the pandemic.

Overall, care utilization in the quarter was roughly at baseline levels, Chief Financial Officer John Rex said during UnitedHealth’s conference call to discuss quarterly results. With the Omicron variant-driven surge early in the year, the company recorded about 40,000 COVID-19-related hospitalizations in January — “the highest of any month since the onset of the pandemic,” Rex said. But by March, hospitalizations declined to around 2,000 as the surge receded.

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© 2024 MMIT

CareFirst Aims to Bolster Public Health With New Program, Exec

CareFirst BlueCross BlueShield, a not-for-profit payer serving a population of 5.3 million in Maryland, Virginia and Washington D.C., has launched a new Public Health Infrastructure team and chosen a leader for its team: Djinge Lindsay, M.D.

CareFirst says its new public health initiative is all about improving health outcomes and health equity for its members. Lindsay tells AIS Health, a division of MMIT, that she and her team plan to leverage data and tackle the biggest barriers standing in the way of health equity.

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© 2024 MMIT

MCO Stock Performance, March 2022

Here’s how major health insurers’ stock performed in March 2022. UnitedHealth Group had the highest closing stock price among major commercial insurers as of March 31, 2022, at $509.97. Molina Healthcare, Inc. had the highest closing stock price among major Medicaid insurers at $333.59.

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© 2024 MMIT

Commercial-to-Medicare Price Ratios Remain Stable, Vary Across Regions

Commercial health plans pay much higher prices for hospital care than public payers, but just how much higher those prices are is far from uniform across the country. Between 2012 and 2019, average commercial-to-Medicare price ratios were relatively stable, with a 7% increase, but there were large increases in some hospital referral regions (HRRs) and reductions in others, according a study published in Health Affairs. Researchers suggested that restraining the growth rate of HRR commercial price ratios to the national average “would have reduced aggregate health care spending by $39 billion in 2019.”

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© 2024 MMIT

News Briefs: Public Health Emergency Gets Another Extension

The Biden administration extended the COVID-19 pandemic public health emergency (PHE) through July 15. The PHE declaration makes possible enhanced Medicaid funding — in exchange for states pausing eligibility redeterminations — and expanded telehealth flexibilities for Medicare and Medicaid beneficiaries. As a condition of receiving enhanced federal funds during the PHE, states are required to ensure continuous Medicaid and CHIP coverage for most enrollees, leading to a nearly 18% jump in Medicaid enrollment. CMS has promised to give states at least 60 days’ notice prior to ending the PHE and 12 months after the month in which the PHE ends to complete eligibility redeterminations. Ultimately, “with the recent rollover of COVID-19 hospitalization activity, we would not be surprised if this is the last extension of the COVID-19-related PHE by the Biden administration,” Citi analyst Jason Cassorla predicted.

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© 2024 MMIT

Amid ‘Family Glitch’ Fix, Enhanced ACA Subsidy Expiration Looms

While the Biden administration has proposed a long-awaited fix for the Affordable Care Act’s “family glitch” — potentially making coverage more affordable for thousands — the looming expiration of major ACA subsidy expansion threatens to overshadow that progress.

Health insurers that spoke to AIS Health, a division of MMIT, seem concerned about the potential drawback of generous financial help for exchange enrollees, but are not necessarily ready to hit the panic button yet.

“We have the unfortunate benefit, I’d characterize it, as having been through in the past other situations where there was uncertainty about the future of the market,” says Bill Tuthill, vice president of market strategy and federal markets for Highmark Inc. Perhaps the most frightening times occurred when all or major parts of the ACA were in danger of being struck down by the Supreme Court — but that threat didn’t pan out, Tuthill tells AIS Health, a division of MMIT.

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© 2024 MMIT

Can Purchaser Groups Slow Down Health Care Price Growth?

For years, health plan sponsors have banded together in purchaser groups in an effort to keep prices down and share benefit design best practices. Yet new research from the Commonwealth Fund indicates that purchaser groups have had marginal success in slowing the growth of health care costs.

Despite these limitations, health care insiders tell AIS Health, a division of MMIT, that purchaser groups have an important role to play in managing price growth. They also say that, while hospital consolidation has a large role in driving up health care prices, health insurers have not done their part to stop prices from increasing — and in fact may have incentives to keep prices rising.

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© 2024 MMIT