Membership Growth

Despite Utilization Creep, Medicaid Losses, MCOs Lift Earnings Estimates

Government-focused publicly traded insurers reporting second-quarter 2023 earnings in July devoted a fair amount of discussion to the impact of Medicaid redeterminations on enrollment and rate adjustments, while analysts were interested in the recent trend of increased medical costs, particularly on the Medicare side. Despite these potential headwinds, the insurers appeared confident in their financial outlook for 2023, as all four raised their earnings projections for the full year.

After pausing eligibility verifications in exchange for receiving enhanced federal funding during the COVID-19 public health emergency (PHE), states were allowed to begin disenrolling people who longer qualify for Medicaid as of April 1. According to the latest update to AIS’s Directory of Health Plans, managed Medicaid enrollment as of June was nearly 73.4 million across 41 states, compared with 72.9 million a year ago — a decline that doesn’t yet fully reflect the impact of ongoing redeterminations. Nevertheless, some states have aggressively moved forward, prompting CMS to issue revised guidelines on best practices to avoid terminations driven by procedural reasons. Florida, for example, has already lost some 224,000 managed care enrollees (or close to 5%) from a year ago, according to DHP’s estimates.

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News Briefs: CMS in 2022 Issued $200,000 in Fines for One-Third Financial Audit Findings

Only three Medicare Advantage insurers received a civil monetary penalty (CMP) as a result of a program audit last year, according to the 2022 Part C and Part D Program Audit and Enforcement Report published on July 18. CMPs based on 2022 program audit referrals totaled $63,220, and another $200,000 in fines stemmed from one-third financial audit findings. By contrast, the previous audit cycle resulted in approximately $1 million in CMPs issued based on 2021 referrals, and nearly half of that amount related to one-third financial audits. The latest audit cycle included 291 contracts under 25 separate parent organizations covering approximately 33.6 million, or 62%, of beneficiaries enrolled in the Parts C and D programs. CMS in the report said the amount of the CMP “does not automatically reflect the overall performance of a sponsor” and that the summary of findings is “not intended to reflect overall industry performance and should not be interpreted to mean that there are pervasive issues throughout the industry related to the noncompliance we identified.”

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Despite Phaseout, Look-Alike Plans Still Threaten Integrated Care for Duals

Payers’ increasing interest in offering integrated health plans for Medicare-Medicaid dual eligibles, namely Dual-Eligible Special Needs Plans (D-SNPs), also led to a proliferation in “look-alike” plans marketed to duals. The main difference — look-alike plans are not legally required to contract with state Medicaid programs on care coordination, a cause of concern for advocates and policymakers alike. As D-SNPs gained traction over the past decade, enrollment in look-alike plans also grew rapidly, according to a new study published in the July 2023 issue of Health Affairs. While CMS has already cracked down on look-alike plans — new regulations caused dozens of contract non-renewals for 2023 — the study authors suggest that look-alike plans still pose a potential threat to improving integrated care delivery for duals, who are often more medically and socially vulnerable than other Medicare beneficiaries.

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Unused Supplemental Benefits May Drive Duals to Switch MA Plans, Finds Deft Study

New data from Deft Research suggests that Medicare Advantage plans continue to struggle with retaining their dual eligible members, mainly because of problems associated with the supplemental benefits offered to address social needs. Published on June 29, Deft’s 2023 Dual Eligible Retention Study found that duals switch plans at about twice the rate of other MA beneficiaries. And while Deft says duals “absolutely depend” on supplemental benefits such as dental care, grocery allowances and utility assistance, duals’ reported issues with their current health coverage often stem from these enhanced offerings, whether they be a source of confusion or just prove difficult to use.

An estimated 30% of dual eligibles make a coverage change over the course of a year, and 8% of duals have already made a switch this year as of mid-May, according to Deft. (Dual eligibles can enroll in or switch dual plans once per quarterly Special Enrollment Period or during the Medicare Annual Election Period). By contrast, Deft in its 2023 Medicare Shopping and Switching Study, which is based on the responses of about 5,000 Medicare beneficiaries, observed that switching by “full pay” (i.e., those receiving no extra help) MA beneficiaries shot up to 15% this past AEP, compared with 12% in the prior two periods.

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CMS: Health Insurers Can Be Paid to Help With Medicaid Redeterminations

The return of Medicaid redeterminations, which the managed care sector expected to be a daunting challenge, has proven even more difficult to handle than anticipated. States have begun to seek more time and resources from CMS to manage staggering amounts of beneficiary outreach and other administrative chores. Now, thanks to recent regulatory guidance, states can also pay managed care organizations to take on some of that work.

Several states — which are ultimately responsible for handling the income checks and disenrollments necessary for what many have called the “unwinding” of COVID-19 pandemic-related continuous enrollment — have paused redeterminations or extended their deadlines for enrollees to complete their redetermination paperwork, and others may follow. The pauses are clear evidence of the scale and complexity of the task at hand.

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News Briefs: Biden Admin Strikes Deal to Preserve Preventive Coverage Mandate, for Now

The Biden administration reached a deal with the Texas company Braidwood Management to preserve the Affordable Care Act’s preventive coverage mandate while the firm’s legal challenge to that provision is litigated. In March, Texas District Court Judge Reed O’Connor ruled that it’s unconstitutional for the ACA to require group and individual health plans to fully cover certain services recommended by the U.S. Preventive Services Task Force, and he said requiring employer plan sponsors to cover preexposure prophylaxis (PrEP) for HIV violates the Religious Freedom Restoration Act of 1993. The Fifth Circuit Court of Appeals temporarily stayed the ruling in May and instructed the parties in the case to agree on how the ACA’s preventive coverage mandate should be handled as an appeal of O’Connor’s ruling proceeds. As part of the agreement — which still has to be approved by the appeals court — just the parties challenging the preventive coverage mandate may opt out of covering USPSTF-recommended services or PrEP; all other health plans must cover those services without cost sharing.

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J.D. Power: To Buoy Member Satisfaction, Insurers Must Be ‘Active Health Partners’

Customer satisfaction with commercial health plans declined year over year, according to J.D. Power’s 2023 Commercial Member Health Plan study. The data analytics firm noted that overall satisfaction decreased by 13 points (on a 1,000-point scale), while there were declines in satisfaction with customer service by 33 points, coverage and benefits by 20 points, provider choice by 16 points, and information and communication by 16 points.

During the previous five years, overall satisfaction increased by 17 points, although there was no change from 2021 to 2022.

Christopher Lis, Ph.D., who is J.D. Power’s managing director of global health care intelligence, tells AIS Health, a division of MMIT, that plans can improve their members’ satisfaction in a few ways. He notes that plans can become “an active health partner” and provide timely and transparent information to beneficiaries and provide individualized support and service.

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How One Louisiana Plan Will Enroll People Leaving Medicaid in Marketplace Plans

Medicaid resumed eligibility redeterminations in April after a multi-year pause related to the pandemic. This has profound implications for Medicaid managed care organizations, which could lose a large portion of their membership — and it is a major opportunity to boost enrollment for plans operating Affordable Care Act marketplace plans. Those plans could enroll some of the people leaving Medicaid due to redeterminations.

Exchange insurers such as Blue Cross Blue Shield of Louisiana may be able to take advantage of the opportunity. Elevance Health, Inc., the parent company of Anthem, recently announced plans to acquire Blue Cross Blue Shield of Louisiana; Anthem has about 350,000 Medicaid members in Louisiana, according to the AIS Directory of Health Plans (DHP). Blue Cross Blue Shield of Louisiana doesn’t cover any Medicaid members, but has about 70,000 marketplace members, per DHP.

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As COVID-Related Policies Expire, Health Coverage May Reshuffle

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.

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CMS Tells States to Slow Down Medicaid Disenrollment as Florida, Arkansas Reports Raise Alarm

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.”

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