UnitedHealth Group’s Surest brand has become a hot product in recent months, with sales of the alternative benefit design accounting for one third of the health care giant’s new commercial business, according to some accounts. UnitedHealthcare, the firm’s managed care arm, pitches commercial clients on Surest by promising lower costs and higher quality — without sacrificing a broad network.

Alternatives to conventional PPO plans are more appealing than ever for commercial insurance plan sponsors, who have struggled with sharp medical cost and premium increases in recent years. But restrictive narrow network plans are often unpopular with plan members, and payer stakeholders have begun to shy away from models that shift costs to members.

Insurers that participate in the individual, small-group and large-group markets are estimated to pay a total of $1.1 billion in medical loss ratio (MLR) rebates to their customers in 2024 — falling short of record-high $2.5 billion in rebates in 2020 but staying similar to rebates levels in 2022 and 2023, according to a KFF analysis on preliminary data filed by insurers.

Under the Affordable Care Act, insurers that spend less than a certain percentage of their premium income on health care claims and quality improvement must rebate customers. Individual/small group plans must issue rebates if their MLRs fall below 80%, while the cutoff is 85% for large group plans. About half of the total rebate amount will go to individual market enrollees this year. Nearly $12 billion in rebates in total have been issued since the ACA required insurers to pay back excess profits to customers starting in 2012.

Although UnitedHealth Group CEO Andrew Witty caused a brief health insurer stock selloff with his remarks about a Medicaid “disturbance,” both his company and other managed care powerhouses have since been busy trying to reassure jittery investors.

The trouble started on May 29, when Witty was answering questions from analyst Lance Wilkes during the Bernstein Strategic Decisions Conference. Witty pointed out that “there’s probably going to be some disturbance around” syncing Medicaid managed care payment rates with the heightened costs associated with covering Medicaid enrollees, now that millions of people have been dropped from the rolls during the “unwinding” process.

Between 2019 and 2021, the use of remote physiologic monitoring (RPM) via wearable devices and mobile applications soared by more than 1,300% among Medicaid enrollees, which was driven by a small number of providers, according to a recent Health Affairs study.

Based on Transformed Medicaid Statistical Information System Analytic Files data from Jan. 1, 2019, to Dec. 31, 2021, the study found that the number of RPM recipients per 100,000 Medicaid enrollees increased from 2.1 recipients in 2019 to 29.6 recipients in 2021 and started to accelerate with the March 2020 onset of the COVID-19 public health emergency. Among over 5,600 distinct providers who billed RPM claims for Medicaid enrollees in 2021, more than half of the claims were from 5% of providers.

Plan sponsor groups say that health insurers have blocked or ignored employers’ requests to obtain information relating to both parties’ role as plan fiduciaries under the Employee Retirement Income Security Act of 1974 (ERISA). That’s despite the fact that insurers are required under a recent law to provide that information to employers on request — and that plan sponsors and plan members have begun to sue insurers to gain access to it.

Plan sponsors have growing legal risk in their role as ERISA fiduciaries due to ongoing litigation and provisions included in the Consolidated Appropriations Act, 2021 (CAA). The lawsuits, many of which spring from requirements in the CAA, all relate to requirements that say health plans must prove they obtained the lowest prices possible for health care services and prescription drugs.

As the use of and interest in GLP-1 medications for weight loss increases, numerous vendors are pitching self-insured health plans on solutions to manage the demand and high costs of the medications. However, benefits experts say employers are approaching these outside companies with caution and are still trying to figure out how to manage the significant expenses associated with GLP-1 drugs.

Chantell Sell Reagan, Pharm.D., WTW’s national pharmacy clinical leader, estimates that about 25 to 30 vendors are marketing solutions to employers to help with FDA-approved weight loss medications such as Novo Nordisk’s Wegovy (semaglutide) and Eli Lilly & Co.’s Zepbound (tirzepatide). Wegovy and Zepbound are also approved to treat type 2 diabetes under the brand names Ozempic and Mounjaro, respectively.

Between 2019 and 2021, the use of remote physiologic monitoring (RPM) via wearable devices and mobile applications soared by more than 1,300% among Medicaid enrollees, which was driven by a small number of providers, according to a recent Health Affair study.

Based on Transformed Medicaid Statistical Information System Analytic Files data from Jan. 1, 2019, to Dec. 31, 2021, the study found that the number of RPM recipients per 100,000 Medicaid enrollees increased from 2.1 recipients in 2019 to 29.6 recipients in 2021 and started to accelerate with the March 2020 onset of the COVID-19 public health emergency. Among over 5,600 distinct providers who billed RPM claims for Medicaid enrollees in 2021, more than half of the claims were from 5% of providers.

Hospital and outpatient service prices paid by commercial health plans grew in 2022, reaching a national average of 254% of Medicare’s compensation rate that year, according to RAND Corp. researchers. Experts tell AIS Health that they agree with the study’s conclusions that market consolidation is a key contributor to high prices and that higher costs are not correlated with higher quality. But they also say payers aren’t powerless to stem the tide of rising costs.

According to the May 13 RAND research, which is based primarily off an analysis of commercial claims data from all 50 states and all-payer claims database data in states where it is available, hospital and outpatient prices have grown substantially since earlier versions of the same research was published that studied the 2010s. (For a more detailed look at the RAND data, see this infographic.) In addition, the study concluded that there is a strong correlation between market consolidation and high prices.

Although first-quarter performance was decidedly mixed for the country’s largest publicly traded health insurers, three startup “insurtechs” — Oscar Health, Inc., Alignment Healthcare, Inc. and Clover Health Investments Corp. — largely impressed industry analysts with their financial results.

Oscar had a particularly outstanding showing, as the Affordable Care Act marketplace-focused insurer recorded its first quarterly profit since its founding in 2012 (the firm went public in 2021). Its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $219 million, which was approximately $100 million ahead of the Wall Street consensus estimate. The firm reported diluted earnings per share of 62 cents, compared to an 18-cent loss in the first quarter of 2023.

Employers and private insurers, on average, paid 254% of what Medicare did for the same inpatient and outpatient services at the same facilities in 2022, according to a new RAND Corp. study.

The report examined data from more than 4,000 hospitals across all U.S. states except Maryland and found that average relative prices paid by private insurers increased from 241% of Medicare rates in 2020 to 254% in 2022, which was largely driven by growth in inpatient relative prices.