Benefit Design

J.D. Power & Co., in the latest edition of its annual survey of consumer satisfaction with telehealth brands, gave UnitedHealthcare, the managed care arm of UnitedHealth Group, the highest marks of any insurer. The company beat out second place Kaiser Permanente and third place Humana Inc. for the top spot.

Insurers have invested heavily in telehealth since the beginning of the COVID-19 pandemic. Starting in 2020, due to pandemic lockdown orders, telehealth became a key care modality in a way that it never had been before. UnitedHealthcare, according to a press release touting the J.D. Power results, offers telehealth products such as 24-hour virtual urgent care without cost sharing and virtual primary care. The health care giant in June made 24-hour virtual care available to 5 million of its fully insured members without cost sharing.

The first biosimilar for the treatment of multiple sclerosis recently received FDA approval, and when it launches, Tyruko (natalizumab-sztn) from Polypharma Biologics and Sandoz Inc. will enter a competitive therapeutic class that is a high priority for management. Payers have said they expect the new treatment to have a moderate impact on their management of the other agents available to treat the condition.

On Aug. 24, the FDA approved Tyruko for the treatment of two indications: (1) adults with relapsing forms of multiple sclerosis, including clinically isolated syndrome, relapsing-remitting disease and active secondary progressive disease, and (2) adults with moderately to severely active Crohn’s disease with evidence of inflammation who have had an inadequate response to, or are unable to tolerate, conventional Crohn’s therapies and tumor necrosis factor (TNF) inhibitors.

A U.S. district court judge recently struck down a federal rule allowing health plans to not count copayment assistance against members’ out-of-pocket costs. The move clears the way for plans to have to discontinue use of copay offset programs such as copayment accumulators, which have been popular tools to keep their costs down and often impact specialty therapies. But as a result of the ruling, industry experts say that patient adherence likely will improve.

U.S. District Judge John D. Bates of the U.S. District Court for the District of Columbia issued the ruling on Sept. 29.

To help patients pay for costly specialty drugs, pharma manufacturers offer assistance that can help cover their out-of-pocket costs. Companies claim that the assistance helps improve patient adherence to medications that often treat rare and deadly conditions. But critics of them say such programs incentivize drugmakers to raise prices of these agents.

On Sept. 29, a U.S. District Court ruled in favor of patient advocates who challenged a regulation that allowed most individual and group market health plans to use copay accumulator programs. So far, it isn’t clear how CMS will respond to the ruling, likely leaving health plans and PBMs waiting eagerly for guidance from the agency. But one thing is certain: Health insurers aren’t happy about the decision.

Insurers created copay accumulator programs in response to the drug manufacturer practice of offering copay assistance programs — including coupons and copay cards — to defray high out-of-pocket costs patients might face for branded drugs. When copay accumulator programs are applied, health plan enrollees are not allowed to count any direct-to-consumer discounts toward their deductibles or out-of-pocket maximums.

With the Oct. 1 start of marketing for the 2024 Annual Election Period (AEP), several major publicly traded insurers have unveiled somewhat slower plans for geographic expansion than in previous years, while CMS’s 2024 MA and Part D landscape files suggest that premium increases were a common way to offset potential rate cuts. But according to recent press releases unveiling product enhancements for next year, insurers appear to be extending enhanced supplemental benefits to the broader MA population while offering Dual Eligible Special Needs Plan (D-SNP) beneficiaries greater flexibility to address nonmedical needs.

Trends emerging from early analyses of CMS’s 2024 Medicare Advantage and Part D “landscape files” include a lower concentration of $0 premium plans, increases in monthly premiums by some of the biggest insurers, and less aggressive but continued expansions into new service areas. But industry observers caution against reading too much into the data, given the nuances of benefit design that are not detectable from the landscape files. That said, it’s clear the major publicly traded insurers made a few tradeoffs in order to maintain benefit stability and remain competitive amid financial headwinds.

Insurers reporting second-quarter 2023 earnings earlier this year said they factored the emerging trend of increasing utilization into MA bids that were due in June. Also impacting pricing for next year’s offerings is the phasing in of substantial revisions to the CMS-Hierarchical Condition Categories (HCC) risk adjustment model that could reduce payments depending on plan type and coding practices, along with certain Part D changes resulting from the Inflation Reduction Act (IRA) that increase the cost burden for plans in the catastrophic phase of the benefit.

House Reps. Gus Bilirakis (R-Fla.) and Earl Blumenauer (D-Ore.) have re-introduced legislation that would increase the number of people who are eligible to receive supplemental benefits as part of their Medicare Advantage plans. Jeannie Fuglesten Biniek, Ph.D., associate director of KFF’s Program on Medicare Policy, explains that the bill is “trying to expand the definition of who can qualify for extra benefits that are not primarily health related.”

The bill comes as the Medicare Payment Advisory Commission is considering standardizing a limited number of common supplemental benefits in MA — such as dental, vision and hearing benefits — with the goal of helping seniors better navigate a dizzying array of plan options.

Prominent insurance brokers are expecting large percentage increases in employer-plan costs next year, brought on by factors like rising labor costs and higher health care utilization. But there isn’t likely to be any relief in coming years, and experts say plan sponsors will have to be creative and disruptive if they hope to cushion the blow of increasing expenses.

Brokers Mercer Inc., Aon PLC and WTW PLC project that average employer plan costs will increase between 5.4% and 8.5% in plan year 2024.

And while employers don’t have to pass that onto employees in the form of higher monthly plan rates, some industry experts expect rising premiums are on the horizon, too.

Mark Cuban Cost Plus Drug Co. and Select Health, the managed care arm of Utah-based nonprofit health system Intermountain Health, on Sept. 19 struck a deal to provide Select Health members with what a press release called “direct access” to Cost Plus’ online generics pharmacy. Select Health tells AIS Health, a division of MMIT, that members’ level of access to Cost Plus depends on their plan design and plan sponsor: Some members may be able to count any purchases made through Cost Plus toward their annual deductible and out-of-pocket maximum.

Intermountain, which owns its own PBM, Scripius, is just the latest notable regional player to partner with Cost Plus on generics. The deal comes shortly after the much discussed move by Blue Shield of California to unbundle its PBM contracts. (As part of Blue Shield’s new strategy, Cost Plus will manage retail pharmacy pricing and payment for the insurer.)

The latest round of mental health care parity regulations would require health plans to detail members’ access to mental health care and the extent of behavioral health networks in much greater detail than before — and a recent federal report says that most plans were not in compliance with previous reporting standards. Experts say that the reporting requirements are a drastic change from previous standards, and plan sponsors and insurers have asked the Biden administration for more time to review the proposed rule.

The Biden administration has made significant changes to regulators' mental health parity enforcement powers in the past, and the latest set may be the boldest yet. The latest proposed rules, issued July 25, include specific data reporting requirements around non-quantitative treatment limits (NQTLs) and more stringent network adequacy requirements. Indeed, insufficient network adequacy now could count as an NQTL for enforcement purposes.