Employer Group Health Plans

Although UnitedHealth Group is facing a host of headwinds — including responding to a massive cyberattack and managing elevated care utilization — Wall Street analysts largely deemed its first-quarter earnings report on April 16 “better than feared,” albeit with a few asterisks.

The cyberattack in question started in February and targeted UnitedHealth’s Change Healthcare division. It significantly disrupted providers’ ability to file claims and receive reimbursement, spurring UnitedHealth to issue short-term loans to some affected providers and temporarily suspend prior authorization for certain services, among other remediation measures.

Elevance Health, Inc. posted solid results in the first quarter of 2024 and announced an agreement to build a new primary care-focused provider unit with financing from private equity firm Clayton, Dubilier and Rice LLC (CD&R). Wall Street analysts were positive about the results, praising the firm’s relatively low care utilization — an area where other health insurers have struggled in recent quarters.

Elevance has been busy with dealmaking in recent months. The CD&R deal, announced April 15, will see the private equity firm and Elevance combine what a CD&R press release termed “certain care delivery and enablement assets of Elevance Health’s Carelon Health and CD&R portfolio companies, apree health and Millennium Physician Group” into a “payer-agnostic” primary care provider focused on value-based contracting, including for patients covered by commercial insurance. It will serve 1 million patients from its inception.

Payers and providers are increasingly adopting value-based care, although they need to continue to invest in the models and collaborate to make them work, according to a report released on April 10 by AHIP, the American Medical Association (AMA) and the National Association of Accountable Care Organizations (NAACOS). The 74-page report identified best practices for developing payment arrangements for value-based care, including establishing clearly defined contract terms and considering ways to incentivize payers and providers to participate and move away from fee-for-service arrangements.

“Our goal here — AMA, AHIP and NAACOS — is to identify these real world best practices, get those in the hands of health plans, of physicians and clinicians and the teams in general, the VBC entities, so that they can really absorb this information [and] take action based on it related to their own participation in these models, so that we can really scale this nationwide,” Danielle Lloyd, AHIP’s senior vice president of private market innovations and quality initiatives, said during an April 12 panel discussion at the NAACOS Spring 2024 conference in Baltimore.

In March, the FDA approved Novo Nordisk’s Wegovy (semaglutide) for cardiovascular risk reduction, which could further boost the already-strong sales for the GLP-1 weight-loss medication.

Specifically, Wegovy is now approved to reduce risk of “major adverse cardiovascular events (MACE) including cardiovascular death, non-fatal heart attack (myocardial infarction) or non-fatal stroke” in adults who are either overweight or obese and have established cardiovascular disease, per a Novo press release.

In March, the FDA approved Novo Nordisk’s Wegovy (semaglutide) for cardiovascular risk reduction, which could further boost the already-strong sales for the GLP-1 weight-loss medication.

Specifically, Wegovy is now approved to reduce risk of “major adverse cardiovascular events (MACE) including cardiovascular death, non-fatal heart attack (myocardial infarction) or non-fatal stroke” in adults who are either overweight or obese and have established cardiovascular disease, per a Novo press release.

When the FDA approved Novo Nordisk’s Wegovy (semaglutide) for reducing the risk of serious heart problems, it paved the way for Medicare Part D plans to cover the drug. Industry experts also predict that the drug’s expanded indication will pressure more commercial insurers and their plan-sponsor clients to cover the pricey — and increasingly popular — medication.

“The pressure is just going to be too much” for commercial plans to avoid broadening their GLP-1 coverage, says Debra Devereaux, principal and chief pharmacy/clinical officer at Rebellis Group. However, she cautions that there may not be many significant coverage-policy changes this year.

Many commercial health plans already cover the drug for weight loss. Data from MMIT, AIS Health’s parent company, show that in 31 states, pharmacy formularies that cover more than half of commercial-plan enrollees categorize Wegovy as “preferred” or “preferred with utilization management restrictions.”

The Big Three PBMs — UnitedHealth Group’s Optum Rx, CVS Health Corp.’s Caremark, and The Cigna Group’s Express Scripts — have opted to cover Perrigo Co.’s over-the-counter birth control pill, Opill (norgestrel), at no cost to members in most non-grandfathered commercial plans, according to one expert. That suggests they are taking proactive steps to comply with potential rulemaking that could require most health plans to cover Opill and other types of over-the-counter birth control without cost sharing.

“There has been pretty broad, in the industry, adoption of Opill to the ACA preventive list,” Cody Midlam, Pharm.D., tells AIS Health, a division of MMIT. Midlam is a director at the benefits consulting firm WTW. “If a drug is on that list, that is generally available at $0 cost share at the point of sale for members.”

Trade groups representing health insurers and insurance agents are giving mixed reviews to a recently finalized rule that reinstated strict limits on short-term, limited duration insurance (STLDI) plans.

The rule, first proposed in July 2023, sought to revive Obama administration-era standards regarding STLDI plans — which are exempt from Affordable Care Act consumer protections such as barring insurers from denying coverage to people with preexisting conditions. Both the Obama and Biden administrations were concerned that consumers often mistake such plans for comprehensive coverage, potentially leaving them with nasty surprises when they need care.

During its March 7 Investor Day, The Cigna Group raised its long-term earnings projection and highlighted the diverse offerings it believes will win client business and differentiate itself from competitors. The company placed particular emphasis on opportunities in the specialty pharmacy area, where it already has a strong foothold and plans on expanding in the coming years.

Cigna increased its long-term adjusted earnings per share (EPS) guidance range to an average growth of 10% to 14% per year, up from a range of 10% to 13%. For 2024, it kept its adjusted EPS target of at least $28.25, up from $25.09 last year.

As demand for GLP-1s has grown, so has the desire of plan sponsors and other payers to avoid covering the costly drugs as "lifestyle" products — instead, they want to allow only patients who will derive clear medical benefits from GLP-1s to use them. To address that desire, vertically integrated payer-PBMs, among other vendors, have launched buy-up services for commercial plan sponsors that promise to curb demand for GLP-1s by making other weight loss care more available to patients.

Experts say it’s not clear whether those programs will make a difference for patients — or be worth the money for payers.