Medical Costs

An estimated 16 million working-age U.S. residents are afflicted with “long COVID,” but the risk factors and mechanisms of the condition — let alone how to treat it — are poorly understood, which means caring for patients with the disease is a daunting challenge for health plans. According to one health insurance leader, identifying members struggling with long COVID and proactively coordinating their care are crucial to contain costs and help members manage the disease.

Long COVID is a loose term for a condition with a variety of symptoms that persist after acute COVID-19 infection has passed. According to the National Institutes of Health (NIH), clinicians refer to the term as Post-acute Sequelae of SARS-CoV-2 Infection (PASC). Typical symptoms include fatigue, post-exertional malaise, shortness of breath, coughing, chest pain, heart palpitations, gastrointestinal issues, and joint and muscle pain, according to the Centers for Disease Control and Prevention. Medical researchers have yet to arrive at a consensus on the risk factors behind long COVID and have yet to develop a standard of care. For the most part, practitioners are just trying to manage symptoms as they come.

U.S. health care spending grew 2.7% to reach $4.3 trillion in 2021, representing a slowdown in growth compared to the 10.3% increase recorded in 2020. That’s according to the 2021 National Health Expenditures Report from CMS’s Office of the Actuary, which attributed the spending-growth slowdown to a 3.5% year-over-year decline in health care expenditures from federal government that jumped in 2020 amid the COVID-19 response. The decline in government spending “more than offset” the impact of greater insurance coverage and higher health care utilization seen in 2021. The report also noted that private health insurance spending increased by 5.8% in 2021 to reach $1.2 trillion.

If a new lawsuit filed by two Connecticut union locals against Elevance Health, Inc. is successful, health insurers managing self-funded plans could face a torrent of litigation from unhappy plan sponsors. Plan sponsor trade groups and the attorneys handling the Connecticut lawsuit argue that carriers across the country systematically overcharge administrative services only (ASO) plan sponsors for procedures — and that newly available price transparency data proves it.

The Connecticut lawsuit alleges that Elevance, the company formerly known as Anthem (which still sells plans under that brand name), charged excessive fees for some procedures or negotiated kickbacks with providers in its network. Attorneys for the union locals — International Union of Bricklayers and Allied Craftworkers Local 1 and Sheet Metal Workers’ Local No. 40 — accuse Elevance of “either unlawfully retaining…improperly discounted amounts for itself, or…imprudently overpaying providers. Either way, [Elevance] is in breach of its fiduciary obligations to the Plans” under the Employee Retirement Income Security Act (ERISA), the suit argues.

Of the approximately 30.2 million seniors currently enrolled in Medicare Advantage, more than 5.2 million receive their coverage through an employer-sponsored group MA plan, according to the latest CMS enrollment data. That’s roughly the same proportion of MA enrollees in group plans as last year, when AIS Health reported on the rising popularity of Employer Group Waiver Plans (EGWPs, also commonly referred to as group Medicare). Meanwhile, those offerings are growing as the share of employers sponsoring retiree medical benefits is on the decline, according to recent analysis from the Kaiser Family Foundation, which raised questions about the lack of transparency around these plans and the potential cost implications to the overall Medicare program. But industry experts argue that MA offers value to retirees that they can’t get through traditional, fee-for-service (FFS) Medicare.

As health insurers rapidly expand their technology divisions and ally with tech companies to create population health and business insights, many health care leaders have expressed a hope that new technologies and insights can help tackle social determinants of health (SDOH). Those tools hold great promise, according to experts, but must be paired with old-school, community-based coalition building to be successful.

During a panel convened for a Dec. 6 Milliman Inc. webinar, health tech experts from organizations including Independence Blue Cross and Microsoft Corp. agreed that population health and equity insights can’t move the needle on SDOH if they aren’t paired with grassroots coalitions.

Two recently published studies by Prime Therapeutics LLC shine a light on specialty drug costs. In the first, researchers found that a newer agent for cystic fibrosis is effective, but it is so costly that its related savings in health care services avoided do not offset its cost. The second study showed that a focused communication effort for a transition to a preferred infliximab biosimilar, among other strategies, has resulted in millions of dollars in savings in only the first three months after implementation of the strategy.

Posters on the studies were presented at the Academy of Managed Care Pharmacy (AMCP) Nexus meeting.

The rise in consolidation among hospital systems operating in different geographic areas may be hampering the competitive strength of health insurers by limiting their negotiating muscle, a new study in Health Affairs says.

The pricing effects of hospital consolidation is not new. Previous research, including a 2020 report from the Medicare Payment Advisory Commission (MedPAC), shows that merging hospital systems tend to lead to higher prices.

However, the new study seeks to unravel the effects of a particular phenomenon — what happens after a merger or acquisition (M&A) among hospitals that operate in different markets and the impact on downstream factors, including contract negotiations with insurers.

A COVID-19 hospitalization cost more than $40,000 on average for people with large-employer health coverage in 2020, according to the Peterson-Kaiser Family Foundation Health System Tracker. Half of those hospital admissions cost over $25,000, and a quarter cost almost $39,000. About 38% of COVID-related hospitalizations in 2020 included an intensive care unit stay, and the average cost of such admissions was $65,569 — more than double the average amount paid for COVID admissions without an ICU stay.

Influenza cases and hospitalizations — which dipped in 2020 and 2021 as the public took steps like masking and staying home to slow transmission of COVID-19 — are back this year with a vengeance.

But while one equities analyst recently warned investors that such “heightened flu activity” could impact financial metrics for payers that haven’t priced for such a scenario, a credit rating analyst tells AIS Health, a division of MMIT, that insurers aren’t likely to take a major hit.

The average annual premium for employer-sponsored health insurance in 2022 was $7,911 for single coverage and $22,463 for family coverage, similar to the average premiums last year, according to the Kaiser Family Foundation 2022 Employer Health Benefits Survey. On average, employees contributed 17% toward single coverage premiums and 28% toward family coverage premiums. Among employees at small firms, 33% of them chose a plan where the employer paid the entire premium for single coverage, compared with only 6% at large firms. Meanwhile, 31% of small firm workers were in a plan that required them to contribute more than half of the premium for family coverage.