Health Plan Weekly

Premiums on the individual marketplace are set to increase by an average of 10% nationally, according to an analysis by the Kaiser Family Foundation (KFF) of the first batch of preliminary premium rate filings sent to state exchange regulators. The filings are just the first in several steps before carriers lock in rates for open enrollment for the 2023 plan year, and don’t represent the final price of those premiums. But experts tell AIS Health, a division of MMIT, that utilization and medical trend mean that substantive price increases are a certainty — even if Congress extends the American Rescue Plan Act’s (ARPA) enhanced premium tax credits, which are set to expire at the end of this year.

More employers are looking at offering near-site or onsite health clinics to employees and their families, in a bid to improve employee retention, elevate quality of care and better manage medical and pharmacy costs. To optimize these clinic offerings, employers should incorporate high-performing providers and align incentives between patients and primary care physicians (PCPs), say experts who spoke at a recent conference held by the Business Health Care Group (BHCG) of Wisconsin.

According to Mercer’s “Health & Benefit Strategies for 2023” report (see infographic), 17% of large employers said they currently provide onsite or near-site health services to employees, while 12% are planning or considering doing so. The survey was conducted April 26 to May 13, 2022, and included 451 organizations with 500 or more employees.

More purchasers than ever are offering virtual primary care to their members and may be on the verge of launching “virtual-first” plans, according to recent surveys by benefits consultants and brokers. However, health care experts tell AIS Health, a division of MMIT, that there’s an important distinction between the availability of such options to members and actual uptake — and point out purchasers aren’t yet convinced that virtual offerings will reduce costs or improve the member experience.

Recent benefit surveys show increasing interest from employer purchasers in the availability of virtual primary care — which places a member with a telehealth primary care provider inside a traditional health benefit — and virtual-first plans, which are benefit designs that require members to use some sort of telehealth option (usually a telehealth PCP) as their primary point of contact with the health care system.

California elected officials approved a controversial plan that will enroll members of Medi-Cal, the state’s Medicaid program, in Kaiser Permanente’s MCO — shifting those same enrollees off the books of the insurers that currently claim them as members. That’s despite the vociferous objections of 16 county-run MCO plans, which stand to lose hundreds of thousands of members in the transfer to Kaiser Permanente, according to the CEO of the largest plan involved.

Kaiser Permanente did not have to participate in the normal Medi-Cal MCO bidding process to strike the deal. Instead, the integrated health system and insurer, which is based in Oakland, worked directly with the office of Democratic Gov. Gavin Newsom to develop a bill, Assembly Bill No. 2724 (A.B. 2724), authorizing the no-bid contract. State legislators approved the bill on June 29, with the lower chamber, the Assembly, voting 48-15 in favor and the Senate approving the deal 25-7.

Sen. Joe Manchin (W.Va.), the centrist Democrat who has almost singlehandedly stalled the party’s congressional agenda, said on July 15 that he would consider extending marketplace subsidies only if they do not contribute — in his view — to inflation, according to press reports. Manchin holds a quasi-veto over most elements of the Democrats’ agenda. Democrats hold control of the Senate by a single vote — with the chamber split 50-50 between the two parties, Vice President Kamala Harris can cast tiebreaking votes in her constitutional role as President of the Senate. That is the way Democrats must pass most of their legislation, because Republicans would use the filibuster to block most progressive bills. A 60-vote majority is needed to bypass the filibuster, which means only bills with broad support across both parties could make it through the upper chamber outside budget reconciliation. Budget reconciliation is an arcane procedure that allows the Senate to pass legislation with a simple majority, so long as the bill in question relates largely, in the Senate parliamentarian’s judgment, to the budget.

Health insurers, states and the federal government are beginning to take more seriously health inequities, according to experts who spoke with AIS Health, a division of MMIT, as the issue becomes a hot topic due to the health and financial costs caused by disparities in health care access and outcomes.

Health inequities related to race, socioeconomic status and sex/gender account for $320 billion in annual health care spending for five high-cost diseases, according to a Deloitte report released on June 22. Deloitte actuaries project that could increase to $1 trillion by 2040 and lead to an average $2,000 increase in health spending per person in the U.S. if those issues are not addressed. The researchers examined the costs of health inequities related to the treatment — or lack thereof — of breast cancer, diabetes, colorectal cancer, asthma and coronary heart disease.

Over 70% of employers with 500 or more employees are planning to enhance their benefit programs in 2023, with increasing emphasis on health care affordability, work and life balance and women’s reproductive health, according to Mercer’s “Health & Benefit Strategies for 2023 Report.” The report, which is based on surveys of 708 organizations with a focus on the 451 large employers, also found that health benefit strategies are becoming less about reducing health care costs but more about supporting the emotional, physical, social and financial well-being of employees.

Researchers from the American Academy of Actuaries expect the most notable factors in 2023’s health insurance premium rate-setting will be COVID-19 variants, the expiration of enhanced premium subsidies in the individual marketplace, the resumption of Medicaid eligibility redeterminations, inflation and provider labor shortages — a combination of public health, policy and economic factors that represent the long tail of the COVID-19 pandemic.

The impact of COVID-19 is still difficult to model. New variants to the virus and regional outbreaks mean that plan-level analysis is fraught. But the cost of hospitalization and a consistent standard of care mean that plans have a useful base for modeling.

By no later than 2024, California will allow residents aged 26-50 with any immigration status to enroll in Medi-Cal, the state’s Medicaid program — making the state the first in the nation to allow all undocumented residents to enroll in safety-net insurance programs. State officials estimate that Medi-Cal enrollment statewide could grow by more than 700,000 as a result of the expansion, and follows a similar move last year to expand Medi-Cal eligibility to undocumented Californians aged 50 and over, a cohort of about 185,000 people, according to the office of Democratic Gov. Gavin Newsom.

That enrollment surge will likely come at the same time as state agencies and managed care organizations wind down record Medicaid enrollment backed by pandemic relief funds and the national suspension of eligibility redeterminations required by the federal pandemic response measures. The CEO of the state’s largest MCO, L.A. Care, tells AIS Health, a division of MMIT, that the insurer is staffing up to address the administrative challenges — and said the expansion should improve health outcomes for a group of residents who are underserved and disadvantaged by the current setup.

About 18.3% of in-network claims were denied by non-group qualified health plans (QHPs) offered on HealthCare.gov in 2020, according to a recent Kaiser Family Foundation analysis. Among the 144 issuers in HealthCare.gov states with complete data on claims received and denied, 52 of them had a denial rate between 10% and 19%. In 2020, the majority of denials (72%) were classified as “all other reasons,” while one in five of the roughly 765,000 medical necessity denials involved behavioral health services. In addition, of the more than 42 million denied claims in 2020, marketplace enrollees appealed fewer than 61,000 claims — a 0.1% appeal rate — and insurers upheld 63% of denials that were appealed.