ACA Exchanges

As publicly traded insurers vie for contracts in an increasingly competitive Medicaid environment, this year has seen a considerable uptick in bid protests and legal challenges with billions of dollars at stake. Dayton, Ohio’s CareSource, one of the largest not-for-profit Medicaid insurers in the U.S., has participated in at least five such protests after embarking on an aggressive market expansion. And while its approach involving strategic partnerships with local providers has had mixed results, the insurer is intent on pursuing states where it believes it can best serve enrollees, whether that be through Medicaid or other product lines.

CareSource currently serves 2.1 million enrollees in Medicaid, Affordable Care Act exchange and dual eligible plans. According to AIS’s Directory of Health Plans (DHP), nearly 1.8 million (or about 85%) of those lives are in Medicaid or duals plans in Georgia, Indiana, Michigan and Ohio. Its home state of Ohio is its largest Medicaid market, where it serves approximately 1.2 million individuals.

Legal experts during a recent panel discussion said federal agencies and lawmakers have new uncertainty around health care regulation in the aftermath of the Supreme Court’s decision to end a legal concept that gave agencies broad leeway when they issued rules.

In its rulings in Relentless v. Department of Commerce and Loper Bright Enterprises v. Raimondo, the Supreme Court effectively repealed Chevron deference, a legal precedent that is more than 40 years old. The idea behind it is that agency staff have subject matter expertise that Congress is unlikely to share, and Congress couldn’t be expected to continually update statutes to address every emerging issue of importance to a specific sector of the economy.

With Vice President Kamala Harris now poised to get the Democratic nomination for president, Wall Street analysts have been busy prognosticating what that means for the array of for-profit health care firms they cover — including health insurers.

So far, select analysts are predicting that Harris’ ascendence will give Democrats a greater chance of winning the election, which would be bad news for Medicare Advantage-focused insurers but good for those more focused on Medicaid and the Affordable Care Act exchanges.

According to the latest data from KFF’s Medicaid Enrollment and Unwinding Tracker, more than 24.5 million people have been disenrolled from Medicaid as of July 23. Among reporting states, there is wide variation in Medicaid disenrollment rates, KFF noted, ranging from 57% in Montana to 12% in North Carolina. The nonprofit foundation said some of that variation is likely explained by “who states are targeting with early renewals as well as differences in renewal policies and system capacity.” Overall, 31% of people with a completed renewal were disenrolled in reporting states while 69%, or 53.6 million enrollees, had their coverage renewed, KFF said. Still, the foundation noted that “due to varying lags for when states report data, the data reported here undercount the actual number of disenrollments to date.”

CMS on July 19 took new steps to protect Affordable Care Act marketplace enrollees from unauthorized plan switching — moves that were applauded by the independent broker industry. One policy expert says the new policies are welcome and should help with unauthorized plan switching, but she suggests that more must be done to prevent unauthorized plan signups. Meanwhile, a new Senate bill and industry efforts could make a difference in unauthorized signups.

In a July 19 press release, CMS said it would make notable changes in the way it processes plan switches on HealthCare.gov, including:

Molina Healthcare, Inc. has agreed to pay $350 million to acquire ConnectiCare, a subsidiary of EmblemHealth that covers about 140,000 medical lives in Connecticut. The July 23 announcement occurred one day before Molina reported second-quarter earnings results that beat Wall Street analysts’ projections. The ConnectiCare deal is expected to close in the first half of next year and is subject to regulatory approvals.

Centene Corp., meanwhile, reported second-quarter financial results on July 26 that underscored the elevated cost trends it’s seeing in its dominant Medicaid segment. Like other insurers, Centene is feeling the effects of a higher-acuity risk pool created by the exodus of millions of people from the Medicaid rolls since states restarted routine eligibility checks last spring. Still, other positive developments for Centene led one Wall Street analyst to declare its quarterly performance “mixed.”

In recent letters to two federal watchdog agencies, Republican leaders of key House committees demand an investigation into “widespread” improper enrollment in Affordable Care Act exchange plans, citing the findings of a paper from Paragon Health Institute, a right-leaning think tank.

Health policy experts who spoke to AIS Health agree that that there are incentives for enrollees — and the brokers who help them find coverage — to estimate their income in such a way that they will qualify for the richest ACA subsidies. However, they aren’t convinced that there’s large-scale enrollment fraud taking place.

In their paper, the Paragon researchers estimate that 4 million to 5 million people are improperly enrolled in $0-premium (or fully subsidized) ACA exchange plans as of 2024, costing taxpayers between $15 billion and $20 billion.

As states resumed their Medicaid eligibility redeterminations last spring, some experts suggested that officials should prioritize helping Medicaid managed care (MMC) enrollees who were losing coverage enroll in a plan from the same carrier in the Affordable Care Act (ACA) individual marketplace. Private insurers like Centene Corp. have also emphasized this strategy, with the goal of stemming member attrition. However, a new study from Health Affairs suggests that “a within-carrier transition is likely to be possible only for roughly half of Medicaid managed care enrollees.”

By examining Clarivate’s InterStudy enrollment data from 2021, researchers found that in 2021, 52.1% of MMC members were enrolled by a carrier that also had a plan on the ACA marketplace in the same county. Among all MMC enrollees, 24.5% were in counties where the largest insurer was the same in both Medicaid and the ACA marketplace. In 10.3% of the 2,625 counties with MMC, all MMC enrollees were in a plan offered by an insurer that also had a marketplace plan.

Legal odds are growing long for the Affordable Care Act’s preventive services coverage mandate after a June 21 appeals court decision, which didn’t resolve a lawsuit that could undermine the legal authority of federal preventive services experts to recommend those services be covered free of charge by health plans. The next stage of the Braidwood v. Becerra suit will be decided by either the conservative Supreme Court or a federal judge who has issued a series of rulings undermining the ACA.

The U.S. Court of Appeals for the Fifth Circuit found that the federal government can still require health plans to provide some preventive services to plan members free of charge under the Affordable Care Act — for now. The ruling still leaves open the possibility that, in the end, Braidwood could upend the preventive services coverage regime set up by the ACA. In the next step of Braidwood, the Biden administration must decide whether to petition the Supreme Court for an appeal, or let the case be decided by Texas District Court Judge Reed O'Connor, who has repeatedly ruled against provisions of the ACA.

With two recent papers, a right-leaning think tank has managed to draw the ire of a wide array of health benefits stakeholders — including the top insurer trade group, a major health insurer, employers, unions, agents and brokers.

Both papers come at a time when health care industry stakeholders are increasingly trying to read the tea leaves to determine what policies President Joe Biden or former President Donald Trump would embrace if reelected.

In a paper published in May, the Paragon Health Institute argues that not only should federal policymakers end the enhanced Affordable Care Act subsidies that have been in place since 2021, but they should also cap the current open-ended tax exclusion for employer-sponsored health insurance.