The COVID-19 public health emergency (PHE) will end on May 11, the Biden administration said. Emergency authorities flowing from the PHE have required insurers to make certain COVID-19 testing and treatment available to plan members at no additional cost; expanded access to telehealth in Medicare, Medicaid and CHIP; increased funding to states for Medicaid; and barred states from disenrolling Medicaid members. In December, Congress authorized states to begin disenrolling Medicaid members starting in April, with enhanced funding declining and zeroing out on a set schedule starting then. The Biden administration’s announcement comes as Republicans, newly in control of the House of Representatives, have introduced bills that would end the PHE much sooner. The May 11 end date “align[s] with the Administration’s previous commitments to give at least 60 days’ notice prior to termination of the PHE,” according to a White House statement.
Three years after states’ annual efforts to verify enrollees’ Medicaid eligibility were paused because of the COVID-19 public health emergency (PHE), states as of April 1 may begin terminating Medicaid coverage for individuals who no longer qualify. States and their managed care partners have been working to update beneficiary contact information for the inevitable return of redeterminations, and Medicaid managed care organizations can play a big role in raising awareness about the process, according to industry experts.
“I think that many members, probably 60% to 70% of folks, are just completely unaware that this is happening, and a lot of other folks just don’t realize the rigmarole they have to go through in order to maintain eligibility,” remarks Jerry Vitti, founder and CEO of Healthcare Financial, Inc., a firm that connects low-income, elderly, and disabled populations with Medicaid and other public benefit programs. “But plans can do mailings, do outreach, and be a connection point to Medicaid agencies where they can get enrolled.” Unfortunately, “they have uneven demographic information on these folks since the population is so transient, but they can reach out to members…and I think plans can do a really good job to build awareness of what’s happening and the implications.”
Medicaid managed care organizations this year will have their hands full as they support state efforts to resume eligibility redeterminations and try to help members avoid gaps in coverage, or “churn” historically associated with failing to meet cumbersome paperwork requirements. At the same time, MCOs may have more opportunities to address health-related social needs (HRSNs) as CMS encourages states to pursue new funding flexibilities around items like food and housing, industry experts tell AIS Health, a division of MMIT.
As a condition of receiving enhanced federal matching funds during the COVID-19 public health emergency —which will end on May 11 — states had to maintain continuous coverage for Medicaid enrollees. But the Consolidated Appropriations Act of 2023 (CAA) decoupled that requirement from the expiration of the PHE. Per the CAA, the temporary 6.2 percentage-point increase in the Federal Medical Assistance Percentage will phase down over three quarters starting on April 1, when states may begin terminating Medicaid coverage for individuals who no longer qualify. States have up to 12 months to begin — and 14 months to complete — eligibility redeterminations for all individuals enrolled in Medicaid.
During the open enrollment period that ended on Jan. 15 in most states, 16,306,448 people selected an Affordable Care Act marketplace plan, the Biden administration said on Jan. 25. That total represents a 13% increase compared to the same time last year, and accounts for plan selections through Jan. 15 on the 33 states using HealthCare.gov and through Jan. 14 or 15 on the 18 state-based marketplaces. While record-breaking for the exchanges, the signup total for 2023 is not final, as open enrollment continued through Jan. 23 for Massachusetts Health Connector and through Jan. 31 for DC Health Link, Covered California, Get Covered New Jersey, New York State of Health and Health Source Rhode Island. Still, the Biden administration hailed the new enrollment figures, with CMS Administrator Chiquita Brooks-LaSure stating: “On the tenth anniversary of the ACA Marketplaces, the numbers speak for themselves: more people signed up for plans this year than ever before, and the uninsured rate is at an all-time low.”
UnitedHealth Group kicked off the managed care sector’s latest round of financial results on Jan. 13 by reporting fourth-quarter and full-year 2022 adjusted earnings per share (EPS) of $5.34 and $22.19, respectively. The company’s adjusted EPS for the prior quarter beat the Wall Street consensus estimate of $5.17, and its medical loss ratio of 82.8% was just a hair higher (worse) than the consensus projection of 82.7%. The firm also reported that its full-year revenues of $324.2 billion grew 13% compared to 2021, “with double-digit growth at both Optum and UnitedHealthcare.”
Nearly 15.9 million people have signed up for Affordable Care Act exchange coverage since the start of open enrollment on Nov. 1, CMS reported on Jan. 11. “This record-breaking enrollment represents a 13% increase over last year, including over 3 million people new to the Marketplaces,” the agency said in a press release. As in prior enrollment snapshots, the 15.9 million enrollment figure includes signup data from both the federal and state-based marketplaces. In the 33 states using the HealthCare.gov platform, there were 11.9 million plan selections through Jan. 7, 2023, while the 18 state-based exchanges reported 4 million plan selections through Dec. 31, 2022. Americans in most states have until Jan. 15 to sign up for marketplace coverage for 2023, unless they qualify for a special enrollment period.
During the J.P. Morgan Healthcare Conference on Jan. 11, chief executives of Bright Health Group, Inc., Clover Health Investments Corp. and Oscar Health, Inc. discussed their companies’ aims to achieve profitability this year or next year. Thus far, however, the companies have not had a profitable quarter since they went public in 2021.
For the first three quarters of 2022, the companies collectively had a net loss of more than $1.3 billion: Bright Health lost $691.3 million, Clover Health lost $254.8 million and Oscar Health lost $383 million.
Nearly 11.5 million people selected or were automatically reenrolled in health plans for 2023 on HealthCare.gov as of Dec. 15, 2022, an 18% increase over the same time period in 2021, according to CMS. Although the average premium for benchmark silver plans (before accounting for tax credits) increased by 4.1% in 2023 after four years of declines, enrollees receiving subsidies may find their net premiums for low-cost bronze, silver and gold plans are lower than last year, according to a Kaiser Family Foundation analysis.
This year, a variety of headwinds and tailwinds are likely to buffet the health insurance industry, including inflation, a possible recession, the return of Medicaid eligibility checks, potential policy changes in Medicare Advantage, a split Congress, easing COVID costs and more. But the net effect of all those factors is likely to leave the sector on stable footing, analysts tell AIS Health.
“The tailwinds and headwinds change every year — that’s the case again for ’23. Overall, we think it’s balanced; that’s why we have a stable view,” says James Sung, associate director of insurance at S&P Global Ratings.
Tucked into the annual payment rule for Affordable Care Act exchange plans is a proposal that, if finalized, would upend the way health plans and PBMs go about designing formularies — if only for one business line. Already, industry groups are weighing in to both applaud and criticize the concept of requiring ACA marketplace plans to put only generic drugs on their lowest cost-sharing tiers.
“There will be legitimate points to be made on multiple sides of this, and I think that this is going to be a very delicate tightrope that is going to have to be walked,” says Massey Whorley, a principal at Avalere Health.
Three years into the COVID-19 pandemic, enrollment in both commercial health coverage and public health insurance continued its growth. Managed Medicaid membership jumped from 61.4 million in December 2020 to 74.0 million in 2022, while Medicare Advantage (MA) enrollment reached 29.9 million this year, compared with 25.2 million in 2020, according to AIS’s Directory of Health Plans. Commercial health coverage gained 300,000 enrollees over the past year, yet several major health plans reported slight decreases in commercial enrollment, including Centene Corp. and CVS Health Corp.’s Aetna.