Membership Growth

The Congressional Budget Office estimated that in 2023, 248 million people who are younger than 65 will have health insurance coverage, with over 57% covered through employment-based health plans. As COVID-era policies expire over the next decade, employment-based coverage will grow to 159 million and remain the largest source of insurance.

The coverage patterns vary significantly by income. People with income less than 150% of the federal poverty level are more likely to be uninsured or covered through Medicaid or the Children’s Health Insurance Program, while those with higher income are predominantly insured through employer-sponsored coverage.

Medicaid redeterminations resumed in recent weeks after years of pandemic-related policies that suspended income verification for the safety net health insurance program, and some states — particularly Florida — seem to be moving faster than others to remove beneficiaries from their rolls, prompting a warning from the Biden administration. Experts say that the pace of redeterminations will vary from state to state — and so will redeterminations’ possible negative effect on health equity, which could intensify if states are cavalier or overaggressive with disenrollments.

“We’re looking closely at the Medicaid renewal numbers released by several states today. Keeping eligible people covered is our #1 priority. States need to do their part to keep people from losing coverage due to red tape,” said CMS Administrator Chiquita Brooks-LaSure on Twitter on June 1. The CMS-controlled Twitter account for Medicaid, while retweeting Brooks-LaSure, said that “we are closely monitoring the Medicaid renewal numbers that states are reporting,” and added that “we will continue to work directly with states to help keep eligible individuals covered.”

The Congressional Budget Office (CBO) garnered headlines recently when it projected that not only will the uninsured rate reach a record low this year, it will creep up again in the next 10 years. In a June 1 webinar hosted by Health Affairs, a CBO official expounded upon how those projections came about, noting that at the behest of Congress, the agency is closely following how coverage shifts affect particular demographics.

In its new projections, CBO said that the uninsured rate among people who are younger than 65 will increase from an unprecedented 8.3% this year to 10.1% in 2033, which would still be below the 12% rate from 2019 before the COVID-19 pandemic. The estimates, which were published in Health Affairs on June 24, show the impact that the expiration of temporary policies put into place during COVID will have on insurance coverage.

Medicare Advantage enrollment grew by more than 507,000 lives during the 2023 Open Enrollment Period (OEP), according to CMS’s May data release and AIS’s Directory of Health Plans. That’s a significant increase from last year’s OEP, when plans added about 230,000 new members from February to May 2022. The news comes just weeks after a KFF analysis found that the number of seniors enrolled in MA vs. original Medicare officially crossed the 50% threshold.

Shortly after the city of New York inked a deal with CVS Health Corp.-owned Aetna to administer a PPO plan to some 250,000 retirees and their eligible dependents, a group of former city employees are suing to block Mayor Eric Adams (D) from transitioning their retiree health care coverage away from fee-for-service (FFS) Medicare. According to news reports, the class action lawsuit was filed in the state Supreme Court on May 31 by nine individual municipal retirees and the NYC Organization of Public Service Retirees, which sued to block the implementation of a previous contract with Elevance Health, Inc. (then Anthem). The original transition was supposed to begin on April 1, 2022, but the city revised its plans after a state Supreme Court judge ruled that the proposal violated city law by requiring retirees who opted out of the switch to pay $191 per month to maintain their FFS coverage. That July, Elevance backed out of the deal. In the “final approved plans, retirees who opt out of the city’s coverage will have to pay for any supplemental coverage on their own,” reports Becker’s Payer Issues. The plaintiffs alleged that the option to switch to FFS with Medicare Supplemental Insurance is cost prohibitive and that the new coverage offering constitutes nothing more than a “bait and switch,” according to Crain’s New York Business. The $15 billion pact with Aetna is expected to save the city $600 million a year.

Still intent on standing apart from established Medicare Advantage competitors with their use of technology, Medicare-focused “insurtechs” Alignment Healthcare, Inc. and Clover Health Investments Corp. recently reported first-quarter 2023 earnings that showed shrinking losses and increasing insurance revenue. While both insurers are focused on retaining and/or growing their MA membership, fellow startup Bright Health Group, Inc. will soon shed its MA business — its last insurance asset — to continue growing its noninsurance segment focused on value-based care (VBC) delivery.

Declaring a “strong start to the year,” Alignment Healthcare, Inc. on May 4 posted first-quarter revenue of $439.2 million, reflecting year-over-year growth of 27.1%. That was aided largely by a nearly 21% jump in health plan premium revenue to $399.7 million as MA membership climbed 16% to 109,700 lives, the company reported.

As CMS continues to tighten oversight of misleading marketing activities, the agency will soon require Medicare Advantage organizations to file all materials that mention any type of benefit. In a May 10 memo from the Medicare Drug & Health Plan Contract Administration Group, CMS explained that while it previously interpreted the mentioning of widely available benefits (e.g., vision, dental, premium reductions) as “general descriptions” that were not “made with sufficient intent to draw attention to a particular plan or subset of plans” and lead to an enrollment decision “without information on the associated costs for enrollees,” complaints received through various channels have indicated otherwise. Therefore, CMS is expanding its interpretation of “marketing” to “include content that mentions any type of benefit covered by the plan and is intended to draw a beneficiary’s attention to plan or plans, influence a beneficiary’s decision-making process when selecting a plan, or influence a beneficiary’s decision to stay enrolled in a plan (that is, retention-based marketing) and thus subject to review.” As such, the agency will require any material or activity that is distributed by any means and mentions any benefit to be submitted into the Health Plan Management System effective July 10.

Although executives during The Cigna Group’s first-quarter 2023 earnings call put a heavy emphasis on the firm’s evolving PBM business model, Cigna’s ability to control health care costs was a noteworthy —albeit less headline-grabbing — highlight that caught one equities analyst’s eye.

Cigna delivered “the best MLR beat of the bunch,” Jefferies analyst David Windley wrote in a May 8 research note, pointing out that the insurer’s medical loss ratio of 81.3% beat the Wall Street consensus estimate by 60 basis points. For the full year 2023, Cigna expects its MLR to be in the range of 81.5% to 82.3%.

As the industry prepares for a comprehensive overhaul of the model used to determine Medicare Advantage insurers’ risk-adjusted pay, the three largest MA organizations signaled during recent earnings calls that they are well positioned for the changes.

Reporting first-quarter 2023 financial results on May 3, CVS Health Corp. beat Wall Street expectations of $2.09 per share with adjusted earnings per share (EPS) of $2.20, largely driven by better-than-expected membership in the health care benefits segment despite a year-over-year increase in medical loss ratio. Total revenues increased 11% from the first quarter of 2022 to reach $85.2 billion, fueled by growth across all segments, while the health care benefits segment (Aetna) generated revenues of $25.9 billion, up from $23.1 billion a year ago. Medical membership grew sequentially by 1.1 million members to a total of 25.5 million lives as of March 31, reflecting increases across all product lines including growth of 900,000 enrollees in the Affordable Care Act exchange business.

A Senate Finance Committee “secret shopper” investigation of Medicare Advantage plan provider directories turned up inaccurate, nonworking phone numbers or unreturned calls in 33% of 120 provider listings. Staff reviewed directories of 12 different plans in a total of six states and called 10 systematically selected providers from each plan for a total of 120 calls, according to the May 3 report. Furthermore, more than 80% of the supposedly in-network mental health providers that were contacted by reviewers were unreachable, not accepting new patients or out of network. In remarks given at a May 3 hearing to discuss the issue, Committee Chairman Ron Wyden (D-Ore.) called these so-called ghost networks a “breach of contract” by health insurers and vowed to “use all resources” at his disposal to “get some real accountability.” When insurers host such ghost networks, “they are selling health coverage under false pretenses, because the mental health providers advertised in their plan directories aren’t picking up the phone or taking new patients,” he stated. “In any other business, if a product or service doesn’t meet expectations, consumers can ask for a refund.” He also pointed out that CMS performs regular audits of MA plans to ensure that they meet minimum standards but does not routinely audit MA provider directories. "[T]he results speak for themselves. It’s time for that to change," he added.