Membership Growth

With nearly all states having completed the Medicaid “unwinding process” that shed millions of people from the rolls, a new analysis notes that total Medicaid and Children’s Health Insurance Program (CHIP) enrollment is actually higher than it was before the COVID-19 pandemic. One expert tells AIS Health that private insurers helped conduct crucial outreach to ensure people losing coverage could get insured elsewhere — although Medicaid managed care organizations (MCOs) still are grappling with the financial consequences of the unwinding.

The unwinding process began in April 2023 after the end of the continuous enrollment provision in the Families First Coronavirus Response Act. This provision was enacted due to the COVID-19 public health emergency to ensure that no one covered by Medicaid lost their insurance — even if a change in income rendered individuals ineligible. Enrollment had reached an all-time high of 94 million when unwinding began, up from 71 million in February 2020.

More than 25 million people lost their Medicaid or Children’s Health Insurance Program (CHIP) coverage and over 56 million had their coverage renewed during the Medicaid eligibility redetermination process, according to a KFF analysis of data released by states and CMS. Though millions have been disenrolled, nearly 10 million more people are currently enrolled in Medicaid/CHIP than at the start of the pandemic.

Starting in April 2023, states were permitted to resume disenrolling people from Medicaid who no longer qualify after a multiyear pause of routine eligibility checks during the COVID-19 public health emergency. Compared to pre-pandemic levels, total Medicaid/CHIP enrollment is now higher in all but four states: Colorado, Montana, Arkansas and Tennessee. Missouri and North Carolina saw Medicaid/CHIP enrollment growth of more than 50%, as of May 2024.

In August, Highmark Inc. launched a new Medicaid managed care organization in West Virginia, becoming the Mountain State’s first Blue Cross Blue Shield-branded MCO. In doing so, the insurer will confront challenges that MCOs of all stripes are facing, such as building a comprehensive provider network and grappling with the financial pressures related to states resuming their routine eligibility checks after a multiyear pause.

The West Virginia Dept. of Human Services approved Highmark Health Options’ application to be the state’s newest MCO in January, giving the not-for-profit organization a statewide contract that runs for four years. Highmark Health Options will compete against a trio of MCOs in West Virginia that include Elevance Health, Inc.’s Unicare Health Plan of West Virginia, Aetna Better Health of West Virginia, and The Health Plan’s Mountain Health Trust. As of September, Highmark Health Options West Virginia had attained roughly 1,800 members, according to AIS’s Directory of Health Plans (DHP).

After major insurers reported second-quarter financial results that reflected continued medical cost pressure in the government business, analysts revisited their takes on expectations for CVS Health Corp.’s Aetna, Centene Corp. and industry peers. Two notable factors driving some of the headwinds in the back half of the year are the 2025 Medicare Annual Election Period (AEP), which kicks off on Oct. 15, and the impact of Medicaid redeterminations. The latter was of particular concern to analysts after Sept. 4, when Centene provided an update at the Wells Fargo Healthcare Conference signaling lower-than-expected Medicaid enrollment.

For managed care organizations with a large Medicaid footprint, the consistent takeaway for Barclays after second-quarter earnings reports was “incremental trend pressure relative to current expectations,” stemming from redeterminations picking up in the first half of the year “that put increased acuity pressure on state rates,” wrote equity research analysts on Aug. 22. “From here, membership should start to stabilize, which is the first step toward recovery.”

After an administrative law judge (ALJ) agreed with protesters that the Arizona Health Care Cost Containment System (AHCCCS) used an “arbitrary and flawed procurement process” that involved the use of undisclosed scoring criteria when awarding new contracts for the Arizona Long Term Care System (ALTCS), the implementation of the new pacts is on hold. AHCCCS on Aug. 13 said it is “pausing member transition activities” related to the new contracts that were scheduled to begin Oct. 1 and initially awarded to subsidiaries of Centene Corp. and UnitedHealthcare (UHC).

AHCCCS has 30 days to accept, modify or reject the ALJ’s decision, which was issued Aug. 9. The agency said it is “currently in the process of reviewing” the decision.

As evidenced by hotly contested Medicaid contract awards in Florida, Kansas and Texas this year, local and regional health plans are increasingly being shut out of opportunities to serve enrollees in their communities. And though a recent administrative law judge decision in Arizona suggests the winds could be changing, community plans need to become more strategic about their approach to procurements, says one industry expert.

Beyond the headlines, “so much more has happened in the Medicaid space than the eligibility redetermination process,” says Clay Farris, founder and practice lead of client solutions at Mostly Medicaid, which offers advisory services to community plans and other stakeholders across the Medicaid continuum. He is referring to the so-called unwinding of policies that were in place during the COVID-19 public health emergency, when a yearslong pause on routine eligibility checks led Medicaid and Children’s Health Insurance Program (CHIP) enrollment to hit an unprecedented 94 million in March 2023. As of Aug. 1, at least 24.8 million people had been disenrolled from Medicaid because of redeterminations, KFF reports.

During recent conference calls to discuss second-quarter 2024 earnings, Centene Corp., Elevance Health, Inc. and Molina Healthcare Inc. all discussed the long-term Medicaid growth opportunity despite declining membership resulting from redeterminations and increasing medical costs — scenarios that they expect to stabilize next year. And while Centene may be scaling back its Medicare Advantage footprint and Elevance pursued a “disciplined approach” to 2025 bids, all three emphasized their continued focus on serving dual eligible Medicare-Medicaid beneficiaries.

For the quarter ending June 30, Centene on July 26 posted adjusted earnings per share of $2.42 and said it is on track to deliver adjusted EPS of at least $6.80 for the full year. The company ended the quarter with more than 13.1 million Medicaid members, down from just over 16 million a year ago. However, its total membership increased slightly to nearly 28.5 million members, with growth in the Affordable Care Act exchanges and Medicare Prescription Drug Plan (PDP) businesses offsetting Medicaid losses. Its overall medical loss ratio for the quarter was a higher-than-expected 87.6%, as cost pressures in Medicaid led to a segment MLR of 92.8% (compared with 88.9% in the prior year quarter).

In its second quarter 2024 earnings report, Humana Inc. said it now expects individual Medicare Advantage membership growth of approximately 225,000 this year, up from its previous projection of approximately 150,000. The insurer on July 31 reported adjusted earnings per share of $6.96, which was higher than internal and Wall Street projections but down from its prior year EPS of $8.94, and Humana reaffirmed its adjusted EPS guidance of “approximately $16.00.” It also maintained its full-year medical loss ratio guidance of “approximately 90 percent,” which “prudently allows for the higher net inpatient costs observed in the second quarter to continue for the remainder of the year,” according to prepared remarks from Jim Rechtin, president and CEO. During a July 31 conference call to discuss the results, Rechtin added that the company has seen some “modest claims pressure in Medicaid” but does not expect it to impact full-year results. The company’s Medicaid membership is on track to grow by 250,000 lives and reach roughly 1.5 million members by the end of the year. That increase is primarily driven by new contracts in Oklahoma and Indiana, as well as growth in Humana’s Ohio Medicaid business, and partially offset by the redetermination process that is mostly completed. Its active Medicaid footprint is now nine states.

Medicare Advantage Prescription Drug plans (MA-PDs) continued to gain more enrollees than stand-alone Prescription Drug Plans (PDPs) in 2024, according to a KFF analysis.

As of 2024, about 53.1 million Medicare beneficiaries were enrolled in a plan with Part D prescription drug coverage, with 57% in MA-PDs and 43% in stand-alone PDPs. Two-thirds of enrollees receiving the low-income subsidies (LIS) — 9 million out of 13.7 million — chose MA-PDs in 2024. Among the 14 national PDPs, 11 of them lost non-LIS enrollees, with only Wellcare Value Script seeing significant membership growth (from 2.6 million to 3.7 million) due to its low monthly premium.

As CMS applies pressure on health plans and states to enhance coordination for dually eligible Medicare-Medicaid enrollees and as congressional lawmakers urge momentum for the Delivering Unified Access to Lifesaving Services (DUALS) Act, the path to integrated care remains a challenge in many states. And two recent studies show that beneficial outcomes, even for enrollees in Dual Eligible Special Needs Plans (D-SNPs), are not guaranteed.

In separate analyses looking at the New York and Virginia markets, researchers discovered a wide range of improvement areas that, even among highly integrated D-SNPs (HIDE-SNPs) and fully integrated D-SNPs (FIDE-SNPs), could capitalize on the potential of the D-SNP approach. The study covering the Virginia market, published last month in JAMA Health Forum, analyzed the impact of exclusively aligned enrollment (EAE), which the study authors describe as “the highest level of D-SNP integration.” This occurs when the parent organization’s D-SNP (a type of Medicare Advantage plan) is limited to individuals who are also enrolled in that organization’s Medicaid managed care organization.