Health Plan Weekly

With millions of people at risk of losing Medicaid coverage once the COVID-19 public health emergency ends, two states are setting up insurance programs designed to scoop up people who make too much for Medicaid and find Affordable Care Act exchange coverage unaffordable.

If Oregon and Kentucky follow through on their plans to set up Basic Health Programs (BHPs), they’ll join just two other states — New York and Minnesota — that have taken advantage of an often-overlooked provision of the ACA, Section 1331. However, there is some evidence that health insurers are wary of BHPs gaining traction.

CVS Health Corp. posted robust financial results in the first quarter of this year, with revenues increasing by 11.2% to $76.8 billion. Wall Street praised the firm — particularly its Aetna health insurance division — for delivering strong results, and predicted the Caremark PBM would overcome disappointing results for the first quarter.

The integrated health care company’s quarterly adjusted operating income was $4.48 billion, increasing nearly 7% year-over-year from the first quarter of 2021.

Here’s how major health insurers’ stock performed in April 2022. UnitedHealth Group had the highest closing stock price among major commercial insurers as of April 29, 2022, at $508.55. Molina Healthcare, Inc. had the highest closing stock price among major Medicaid insurers at $313.45.

Driven by the COVID-19 pandemic, telehealth utilization increased 7,060% from 2019 to 2020, while utilization dropped 38% in ambulatory surgery centers, 30% in emergency rooms, 16% in urgent care centers and 4% in retail clinics, according to a new FAIR Health white paper. The FH Medical Price Index tracks the weighted average growth in median procedure charges and median allowed amounts. Among the six procedure categories it studied, hospital evaluation and management saw the largest percent increase in both the charge amount index and allowed amount index.

As part of its PBM restructuring efforts, Centene Corp. will sell two pharmacy benefits subsidiaries, Magellan Rx and PANTHERx, for approximately $2.8 billion in separate deals. Magellan Rx will be sold to Blue Cross and Blue Shield affiliate-owned PBM Prime Therapeutics for $1.35 billion, while specialty pharmacy PANTHERx will be sold to a group of private equity firms that includes The Vistria Group, General Atlantic and Nautic Partners for $1.45 billion. Both prices are preliminary and the deals must undergo antitrust review. The PANTHERx sale “is expected to close in the next two to four months,” according to a Centene press release, while Magellan Rx “is expected to close in the fourth quarter of 2022.” Centene executives have sought to sell the firm’s PBM assets for some time; new CEO Sarah London said in February that the firm planned to “reduce our three PBM platforms down to one and to focus...[on] clinical member and provider engagement.” After the deals, Centene will retain PBM Envolve Health, presumably to fulfill those functions. Meanwhile, Centene has spent millions to settle claims by state Medicaid programs that it overcharged them for prescription drugs.

Although the Affordable Care Act has now survived multiple legal challenges heard by the Supreme Court, the 12-year-old law does not appear to be home free yet. A case currently pending before a Texas district court — which could make it up to the highest court in the land — threatens to dismantle the ACA’s mandate that group and individual health plans must fully cover preventive services such as birth control and vaccines.

If the lawsuit is successful in striking down or weakening one of the ACA’s more popular provisions, it would also raise the question of whether private health plans would stop covering certain preventive services with zero cost sharing. According to industry experts, the answer isn’t so simple.

Health insurers have long struggled to administer behavioral health benefits, which won’t get easier any time soon: Demand for mental health services is high due to the opioid crisis and the mental health strains of the COVID-19 pandemic. Experts from clinical, financial and policy backgrounds say that coordinating behavioral health care with traditional medical benefits — and bringing behavioral health care providers into insurer networks — are both essential to managing costs and ensuring access to care.

Despite decades of policymaking that has attempted to streamline access to mental health care benefits, most notably through mental health parity, mental health care remains expensive and hard to access. (Several federal laws mandate mental health care parity: Health plans are not allowed to impose benefit limitations on mental health care that are more severe than limits placed on medical and surgical benefits.) What’s more, mental health care providers are usually siloed from other clinicians on a patient’s care team, which tends to exacerbate medical conditions and increase costs.

Sarah London, Centene Corp.’s new CEO, acknowledged during the insurer’s April 26 first-quarter earnings call that “there were challenges out of the gate” when the company’s Magellan Health unit took over California’s Medi-Cal Rx program in January. But, she added, “I think the team recovered incredibly well.”

London’s comments came after the California Department of Health Care Services (DHCS) said it is investigating Centene’s PBM practices following a California Healthline article earlier this month that detailed numerous issues with the launch. A DHCS spokesperson confirmed the investigation via email to AIS Health, a division of MMIT, but would not elaborate on details.

Humana Inc.’s financial performance in the first quarter of this year received mostly positive reviews from Wall Street. Revenue growth from the health insurer’s mail-order pharmacy business alongside modest care utilization allowed the firm’s executives to raise their end-of-year earnings guidance.

The firm took in $23.9 billion in total revenue in the quarter, an increase from $20.6 billion in the first quarter last year. Humana’s pretax income for the quarter was $1.2 billion, up from about $1 billion in the first quarter of 2021. The firm’s adjusted earnings per share also increased year-over-year, going up to $8.04 from $7.67.

Here’s how major U.S. health insurers performed financially in the fourth quarter of 2021. Health Plan Weekly subscribers can access more health plan financial data — including year-over-year comparisons of leading health plans’ net income, premium revenue, medical loss ratios and net margins. Just email support@aishealth.com to request spreadsheets for current and past quarters.