Health Plan Weekly

CMS on April 28 finalized the 2023 Notice of Benefit and Payment Parameters for Affordable Care Act exchange plans, cementing its proposal to require insurers to offer standardized plans on HealthCare.gov. In a provision opposed by the insurance industry at large, the Biden administration will require issuers offering Qualified Health Plans (QHPs) on the federal exchange to offer standardized plan options at every network type, at every metal level and throughout every service area where non-standardized options are offered, starting in 2023. Those plans also will be differentially displayed on HealthCare.gov “to help consumers make more informed choices about their coverage.” Another major provision included in the annual omnibus rule governing the ACA exchanges is the addition of new network adequacy standards that require QHPs to “ensure that certain classes of providers are available within required time and distance parameters.”

Health care organizations across the country have poured billions into housing investments in recent years: In the past month, Kaiser Permanente and UnitedHealth Group both announced investments of over $100 million in affordable housing projects. Several health plans tell AIS Health that while they do expect a modest return on investment or reduction in costs from their efforts, they mostly see these expenditures as an act of altruism in line with their missions as stewards of public health.

According to the organizations themselves, total capital allocations to affordable housing investments by Kaiser Permanente, UnitedHealth Group and CVS Health Corp. amount to approximately $1.65 billion combined. A large portion of those funds are allocated to finance investments in affordable housing through the Low Income Housing Tax Credit (LIHTC), a financial instrument rolled out by the federal government in the late 1980s and early 1990s to encourage investment by the private sector in affordable housing.

The end of the COVID-19 public health emergency (PHE) is likely to significantly downsize Medicaid enrollment around the nation, and managed care organizations (MCOs) must figure out how to keep enrollment steady and maintain continuity of coverage among members.

Since February 2020, fueled by a COVID-induced economic downturn and resulting federal policy changes, the Medicaid ranks have ballooned by 14.6 million members, a roughly 21% increase, nearing 86 million enrollees, according to the Kaiser Family Foundation (KFF).

As a condition of receiving enhanced federal funds during the PHE, states have been required to ensure continuous Medicaid and CHIP coverage for most enrollees by pausing eligibility redeterminations. A quartet of large for-profit plans that hold 40% Medicaid market penetration nationally — Anthem, Inc., Centene Corp., Molina Healthcare, Inc., and UnitedHealth Group — are all expecting “modest enrollment declines” once the PHE ends, according to a recent KFF issue brief.

Anthem, Inc. reported strong first quarter financial results, prompting the insurer to raise its earnings guidance for the year. The company attributed the change largely to a lower-than-expected COVID-19 impact, as the Omicron variant and the long-term effect of delayed care during previous COVID peak periods was less severe than Anthem had originally projected in January.

For the first quarter, Anthem generated $8.25 in adjusted earnings per share (EPS), beating the Wall Street consensus of $7.82. The insurer increased its full-year EPS guidance to greater than $28.40, up from its previous EPS estimate of $28.25.

Innovative, mostly non-medical supplemental benefits have seen tremendous growth in the few years the Medicare Advantage program has allowed them. But that growth is still from a base of zero, and industry experts suggest that numerous barriers are keeping adoption of these new supplemental benefits at a relatively slow pace.

Starting with plan year 2019, MA organizations began offering a wider range of benefits such as Adult Day Care and In-Home Support Services thanks to CMS’s reinterpretation of the definition of “primarily health-related supplemental benefits.” And with the passage of the CHRONIC Care Act of 2018, MA plans in 2020 began offering Special Supplemental Benefits for the Chronically Ill (SSBCI), a category of “non-primarily health related” items and services that can be made available to certain beneficiaries.

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.

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.

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.

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.

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.