COVID

Four health insurance industry trade groups, in a letter to HHS Sec. Xavier Becerra, said technical issues that led to reports of patients having to pay out-of-pocket for their updated COVID-19 vaccines “have been largely, if not completely, resolved.” The letter, penned by the Alliance of Community Health Plans, Association for Community Affiliated Plans, AHIP, and Blue Cross Blue Shield Association, stated that “health insurers are fully covering the new COVID-19 shots, as required, with no cost sharing when consumers access them from a network provider or receive them through an out-of-network provider when in-network options are unavailable.” In addition to publishing the letter, executives from AHIP, Elevance Health, Inc.’s Anthem, Cigna Healthcare, Humana Inc., and Aetna parent company CVS Health Corp. met with Becerra on Sept. 27 to assure Becerra that they worked quickly to resolve any coding errors that may have prevented vaccines from being fully covered, multiple news outlets reported.

The Centers for Disease Control and Prevention on Sept. 12 recommended that everyone 6 months and older receive the latest versions of COVID-19 mRNA vaccines developed by Pfizer Inc.-BioNTech SE and Moderna Inc. — which will be the first wave of COVID vaccines that won’t be paid for by the federal government. During the public health emergency, private payers only had to reimburse providers for administering the vaccines. Per the Centers for Disease Control and Prevention, “people who don’t have health insurance or with health plans that do not cover the cost can get a free vaccine from their local health centers; state, local, tribal, or territorial health department; and pharmacies participating in the CDC’s Bridge Access Program.” Most private health plans and all government-backed plans cover CDC-recommended vaccinations without cost sharing for members.

Executives from health insurance firms Centene Corp. and Humana Inc. on Sept. 6 pitched investors on rosy projections for the rest of the year at the 2023 Wells Fargo Healthcare Conference — despite ongoing Medicaid eligibility redeterminations and elevated utilization in Medicare Advantage, particularly around COVID-19 hospitalizations.

In remarks during the conference, Centene CEO Sarah London highlighted the spinoffs and balance sheet restructuring that she has orchestrated since taking over the firm in spring 2022. London said that Centene bought back $200 million of shares in August, and “expect[s] to exceed our original $1.5 billion share repurchase target in 2023.”

As health insurers decide how to price their Affordable Care Act exchange plans for the 2024 plan year, inflation, COVID-related costs and Medicaid redeterminations are some of the major factors influencing their calculations, according to a new issue brief from the American Academy of Actuaries. Industry experts say that overall, gross premiums are likely to go up — but because few consumers will feel the impact on their net premiums thanks to expanded subsidies, insurers and regulators may not be driven to aggressively keep rates in check.

“I think the early read right now is the rate increases are going to be higher than last year,” says Fritz Busch, a principal and consulting actuary at Milliman who helped produce the report. In 2023, the average benchmark ACA exchange premium rose by 3.4%. “It’s going to vary by state, but you’re already seeing some [rate requests] well into the double digits — and some single as well — but I think, on average, it’s going to be higher.”

The return of Medicaid redeterminations, which the managed care sector expected to be a daunting challenge, has proven even more difficult to handle than anticipated. States have begun to seek more time and resources from CMS to manage staggering amounts of beneficiary outreach and other administrative chores. Now, thanks to recent regulatory guidance, states can also pay managed care organizations to take on some of that work.

Several states — which are ultimately responsible for handling the income checks and disenrollments necessary for what many have called the “unwinding” of COVID-19 pandemic-related continuous enrollment — have paused redeterminations or extended their deadlines for enrollees to complete their redetermination paperwork, and others may follow. The pauses are clear evidence of the scale and complexity of the task at hand.

States received more than $117 billion in enhanced federal funding during the COVID-19 pandemic’s Medicaid disenrollment pause, according to a new KFF analysis. With unemployment on the rise during the pandemic, Medicaid rolls surged, but state spending did not. States spent $231 billion on Medicaid in 2019; that figure dropped to $214 billion in 2020, KFF reported. Since then, state spending has yet to surpass 2019 levels. That’s because the federal government elected to increase the Federal Medical Assistance Percentage (FMAP) by 6.2 percentage points in exchange for states’ suspension of eligibility redeterminations for the duration of the Public Health Emergency (PHE). But instead of ending the enhanced FMAP funds with the expiration of the PHE, the Consolidated Appropriations Act of 2023 allowed for enhanced funding to begin a gradual decrease — to 5 percentage points higher than normal levels in April, 2.5 in June, and 1.5 in October.

Curative Inc., the Texas startup that launched as a COVID-19 testing provider and pivoted to selling commercial health insurance last year, bought bankrupt Illinois-based life insurance firm American Country Insurance Company (ACIC) earlier this month for an undisclosed sum. The transaction will allow Curative to sell health plans in Illinois, but health care insiders doubt that the firm’s signature offering — large-group commercial health plans with no deductibles — can viably be delivered by a small startup.

Curative said on June 15 that it acquired ACIC, which entered bankruptcy in 2020 and has been in receivership in the states where it operates ever since. Terms of the deal were not disclosed. Per a Curative press release, the ACIC deal will allow the firm to operate “licenses to sell large-group health insurance in select additional states.” Michael Abrams, principal of Numerof & Associates, tells AIS Health, a division of MMIT, that one of those states will be Illinois, as ACIC held both life insurance and health insurance licenses in that state.

Not long after UnitedHealth Group sparked an insurer-stock selloff by revealing that it is seeing higher-than-usual outpatient care utilization, Humana Inc. disclosed that it, too, is seeing elevated medical costs due to an increased use of services.

“At this point it appears that there may be a new trend brewing with a rise in utilization and claims, particularly in the Medicare Advantage segment,” A.M. Best Senior Director Sally Rosen remarked in a new video released by the insurance-focused credit rating firm.

And that’s significant for the managed care industry writ large, Rosen tells AIS Health, a division of MMIT. “Medicare Advantage comprised more than one-third of the industry’s underwriting income in 2022, and while the dollar amount has fluctuated, the percentage of underwriting income coming from Medicare Advantage has made up about one third for each of the past three years,” she says.

UnitedHealth Group’s stock took a nosedive on June 13 after Chief Financial Officer John Rex said elevated outpatient care utilization might push the insurer’s 2023 medical loss ratio (MLR) higher than it originally expected. Since UnitedHealth is the bellwether of the managed care sector, other insurers’ stock traded down in the wake of Rex’s comments. However, equities analysts suggested that the highly diversified UnitedHealth isn’t in any danger of taking a major earnings hit.

During the Goldman Sachs Global Healthcare Conference, Rex said UnitedHealth has seen higher levels of outpatient care activity since the first quarter of 2023, and looking at data from the second quarter, the trend doesn’t appear to be going away. He cited hip and knee replacements as well as cardiovascular care — all “very localized in [the] Medicare business” — as the areas where UnitedHealth is seeing higher utilization.

Starting April 1, states were once again allowed to start disenrolling people from Medicaid who no longer qualify. But after early indications that people are getting kicked off the roles for procedural reasons, the federal government this week offered a stern warning to states that may have been too quick to begin disenrollments.

Eligibility redeterminations were suspended during the COVID-19 public health emergency as a condition of states receiving higher federal funding. In that time, more than 20 million people joined Medicaid rolls nationwide, with enrollment soaring to 95.9 million lives as of May 2023, according to the latest update to AIS’s Directory of Health Plans (DHP). With millions of people standing to lose coverage with the resumed redeterminations, many in the health care industry feared lack of beneficiary knowledge about the renewal process could cause mass procedural disenrollments among those who are still eligible for coverage.