COVID

National Health Care Spending Growth Returned to Pre-COVID Levels in 2022

Total U.S. health care spending increased by 4.1% in 2022, hitting $4.5 trillion, according to CMS. The growth rate appeared to return to the average annual rate of the 2010s, while the share of the gross domestic product (GDP) devoted to health care (17.3%) also fell to pre-pandemic levels.

The rise in overall health care expenditures reflected faster growth in spending for administration costs, retail prescription drugs and long-term services from 2021 to 2022, which was offset by a decline in federal public health spending, according to an analysis by KFF. As the pandemic entered its third year, public health spending dropped by $33 billion compared to 2020.

0 Comments

COVID’s Not Over: Fitch, S&P Say Pandemic Forces Are Still Hitting Insurers

Although 2024 seems far removed from the height of the COVID-19 pandemic, the ripple effects associated with that disruptive global crisis are still influencing how this year will turn out for the U.S. health insurance sector, two top credit ratings firms predict.

“We’re calling it the pandemic hangover,” says Brad Ellis, senior director in Fitch Ratings' North American insurance rating group.

“I think this year might be the last year we’re seeing what we call pandemic-related effects on the industry,” adds James Sung, director of insurance ratings at S&P Global.

0 Comments

Drug Utilization Is Down in Medicaid, but Spending Continues to Climb

Medicaid drug spending shows no signs of slowing despite a drop in prescriptions, according to new research from KFF. Net spending on prescription drugs grew 47% to $43.8 billion from fiscal year (FY) 2017 to 2022. The average Medicaid enrollee had 11.4 prescriptions in FY 2017, with a net spend of $39 per prescription. In FY 2022, the number of prescriptions per enrollee dropped to 9.4, while net spending per prescription rose to $58.

Meanwhile, Medicaid enrollment climbed to historic levels amid the COVID-19 pandemic, reaching 96.3 million lives in June 2023, according AIS’s Directory of Health Plans (DHP). With the end of the COVID-era continuous enrollment provision, states are now in the middle of a lengthy — and sometimes controversialunwinding process. Yet utilization (the overall number of prescriptions) stayed under 2017 levels despite the enrollment boom. That could be because the number of days supplied per prescription has increased, with 90-day supplies becoming more common, in addition to lower utilization overall.

0 Comments

Senate Could Make Medicare Telehealth Rules Permanent

The U.S. Senate Finance Committee seems poised to take up legislation that would make permanent the significant, pandemic-era reforms to Medicare telehealth rules, including rules governing site of care origination and audio-only telehealth encounters, which are otherwise set to expire at the end of next year. Medicare Advantage plan and provider trade groups back the legislation and have pushed for telehealth reforms to be permanent when they were up for renewal in previous legislative cycles.

Emergency reforms to Medicare reimbursement rules were a key reason that the telehealth industry boomed in recent years. Telehealth was the only option for many types of outpatient care during the early parts of the COVID-19 pandemic, and patients, plans and providers became accustomed to using telehealth modalities for a wide variety of low-acuity encounters. Those encounters wouldn’t have been reimbursable if it weren’t for temporary, emergency reforms of Medicare telehealth billing rules passed as parts of COVID relief bills and executive orders by Presidents Donald Trump and Joe Biden.

0 Comments

List Price for COVID Drug Draws Fire as Pfizer Hopes to Woo Payers

Almost two years after Paxlovid received emergency authorization as a treatment for acute COVID-19 infection, Pfizer Inc. and the U.S. government are now in the throes of transitioning the drug to the commercial market. That means the drugmaker is, in its own words, “working diligently with payers to achieve the best possible formulary placement” for Paxlovid — but also raising some eyebrows with the list price it set for the antiviral therapy.

Pfizer said in a statement that the commercial list price for Paxlovid (nirmatrelvir/ritonavir) in the U.S. will be $1,390 per five-day treatment course. That’s more than twice what the U.S. government paid for the drug, $529 per five-day course, and significantly higher than the price range of $563-$906 that the Institute for Clinical and Economic Review (ICER) suggested would be most cost effective.

0 Comments

Payment Parity Between In-Person Care, Telehealth Persisted in 2021

Private insurers paid providers a similar amount for both evaluation and management and mental health therapy services regardless of whether the care was delivered in person or via telehealth in 2021, according to KFF-Peterson Health System Tracker. The analysis noted that while private insurers and employers were paying about the same amounts for in-person and telehealth in 2020, it was initially unclear whether they would continue to do so in 2021.

Telehealth use for mental health therapy surged with the COVID-19 pandemic: In 2021, more than half of mental health services were delivered via telemedicine, compared to only 1% in 2019. Common mental health therapy claims were paid at similar rates for in-person and telehealth care.

0 Comments

News Briefs: Insurers Say COVID Vaccine Coverage Issues Are Fixed

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.

0 Comments

News Briefs: CDC Recommends New COVID Shots for Nearly Everyone

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.

0 Comments

Centene, Humana Execs Downplay COVID, Redetermination Headwinds

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.”

0 Comments

Insurers, Regulators May Have Little Incentive to Constrain Rising ACA Premiums

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.”

0 Comments