Premiums

Analysis Tallies Premium Impact of Provider Markups on Specialty Drugs

If providers charged the same price as specialty pharmacies for specialty medications, $13.1 billion in spending on health insurance premiums and premium equivalents could have been avoided in 2024, according to a new analysis from the consulting firm Oliver Wyman, commissioned by AHIP.

Provider-administered drugs can be delivered directly to clinicians from specialty pharmacies — known as white bagging — or providers can purchase the drugs directly and store the drugs until they are needed for patient care, which is called “buy and bill.” When the “buy and bill” method is utilized, the providers can charge a markup for the drug that is passed through to the patient’s bill.

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© 2024 MMIT

Analysis Tallies Premium Impact of Provider Markups on Specialty Drugs

If providers charged the same price as specialty pharmacies for specialty medications, $13.1 billion in spending on health insurance premiums and premium equivalents could have been avoided in 2024, according to a new analysis from the consulting firm Oliver Wyman, commissioned by AHIP.

Provider-administered drugs can be delivered directly to clinicians from specialty pharmacies — known as white bagging — or providers can purchase the drugs directly and store the drugs until they are needed for patient care, which is called “buy and bill.” When the “buy and bill” method is utilized, the providers can charge a markup for the drug that is passed through to the patient’s bill.

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© 2024 MMIT

How Does MA Plan Design Impact Enrollment, Equity?

Medicare Advantage plan design — particularly the cost of premiums — has a major influence on who chooses to enroll. The variance in that enrollment mix can have a big impact on outcomes and utilization, according to a new white paper from Inovalon and Harvard Medical School. Using Inovalon’s Medical Outcomes Research for Effectiveness and Economics Registry dataset, which tracks demographic and outcomes information for about 30% of the MA population at any given time, researchers found that socioeconomically disadvantaged populations were more attracted to MA, especially zero-premium products.

“Our research challenges the misconception that Medicare Advantage is a monolith, revealing significant differences in plan designs and features and how those variables affect enrollment and outcomes,” Boris Vabson, Ph.D., a health economist at Harvard Medical School and co-lead researcher on the project, said in an April 8 statement released alongside the research.

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© 2024 MMIT

Market Concentration Pushes up ACA Plan Premiums, Analysis Shows

High gross premiums in the Affordable Care Act marketplaces are related to limited choices of health plans and high levels of hospital concentration, a recent Urban Institute report shows.

The study analyzed insurer and premium participation data from more than 503 rating areas on HealthCare.gov and state-based marketplaces from 2019 to 2024. In 2024, the average national benchmark premium — the second-lowest-cost silver premium — is $473. State average benchmark premiums range from $335 in New Hampshire to $886 in Alaska. Average annual premium growth between 2019 and 2024 was modest, averaging 0.2% per year.

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© 2024 MMIT

Email ‘Nudges’ Spur Small Increase in Switching to Superior ACA Exchange Plans

Sending informational emails helped lead to some California residents switching to superior Affordable Care Act exchange plans, according to a study published on March 29 in JAMA Health Forum. However, Marina Lovchikova, Ph.D., the trial’s lead author, points out that the vast majority of households remained in their original plans and the impact on health care utilization was minimal. This suggests that more can be done to make sure enrollees are fully aware of their options and eligibility for more generous plans, she tells AIS Health, a division of MMIT.

Lovchikova, a senior researcher at Covered California, says the state’s exchange is “trying to get people to the coverage that could be most affordable for them and increase the access for their coverage. Some methods the state employs are sending emails or doing other low-cost, so-called nudges, which attempt to inform residents of their options but not automatically enroll them in another plan without their consent.

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As ACA Exchanges Turn 10, New HHS Reports Show How Far They’ve Come

Over the first 10 years of the Affordable Care Act marketplaces, enrollment nationwide has almost tripled, from 8 million individuals in 2014 to 21.4 million in 2024, according to an HHS report.

While the ACA initially envisioned the marketplaces to be developed by states, it also provided states with the option to participate in the federally facilitated marketplace, HealthCare.gov. In 2014, 14 states and the District of Columbia chose to operate their own state-based marketplaces (SBMs). In 2024, there are 19 SBMs.

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No Surprises Act Arbitration Drives Up Health Care Prices, Report Says

A new report by Brookings Institution researchers concludes that the No Surprises Act, the 2020 law that banned surprise medical billing, may cause prices — and consequently premiums — to increase, even though policymakers hoped the law would slow or reverse price growth. The report also concludes that a small group of providers, particularly physician staffing groups owned by private equity entities, are responsible for most of the price increases.

This unintended consequence raises the stakes of ongoing litigation between the Texas Medical Association (TMA) and the Biden administration. Those lawsuits challenge regulations governing the NSA-created, HHS-backed arbitration process, called Independent Dispute Resolution (IDR), which resolves balance billing disputes between payers and providers when patients unintentionally receive out-of-network care. The TMA and other provider groups have successfully sued multiple times to block IDR rulemaking that many experts believe would have kept price growth in check.

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© 2024 MMIT

A Closer Look at 2024 ACA Enrollment: Another Year of Record Signups

More than 21.4 million people have signed up or were automatically re-enrolled in Affordable Care Act marketplace coverage during the 2024 open enrollment period, a 31% increase compared to 2023 OEP, according to CMS.

About 16.4 million people enrolled through HealthCare.gov in the 32 states that use that platform, and another 5.1 million enrolled across 18 states and the District of Columbia, which use their own marketplaces. More than 5.2 million people signed up for marketplace coverage for the first time, a 41% increase compared to 3.7 million during the 2023 OEP.

Every state except Maine saw membership growth in 2024, ranging from 0.2% in the District of Columbia to 80.2% in West Virginia. From 2023 to 2024, 44 of the 51 states reported signup increases of at least 10%, and seven states saw surges of more than 50%. Compared to 2021, marketplace enrollment increased over 150% in six states: Georgia, Louisiana, Mississippi, Tennessee, Texas and West Virginia.

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© 2024 MMIT

Actuaries Back Move to Undo 2018 Association Health Plan Rule

The American Academy of Actuaries has urged the Biden administration to follow through on its proposal to rescind a controversial 2018 rule that granted more regulatory leeway to association health plans (AHPs). Rescinding the 2018 AHP regulations will protect consumers and strengthen the actuarial health of the Affordable Care Act exchanges, according to Academy Senior Health Fellow Cori Uccello and a February public comment letter from the organization.

The comments by the professional association are in response to a December 2023 regulatory proposal that followed through on long-expected plans to rescind the 2018 rulemaking. Those regulations, put forward by the Trump administration, significantly loosened the requirements that apply to AHPs and their close cousins, multiple employer welfare arrangements (MEWAs). The 2018 rule was never implemented, however, because it was largely blocked by a summary judgment issued as a result of litigation by 11 states and the District of Columbia.

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© 2024 MMIT

Rethinking Reinsurance: Study Illuminates Tradeoffs of Popular Waivers

While reinsurance programs have become popular among states hoping to stabilize their individual insurance markets, a new study makes a compelling case that the premium reductions attributed to such programs may not be as helpful as they seem.

States can apply for and implement reinsurance programs via Section 1332 waivers, which allow them to waive certain Affordable Care Act rules in order to test marketplace innovations — provided they adhere to strict guardrails. Reinsurance works by subsidizing insurers’ highest-cost claims, allowing them to charge lower premiums overall.

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© 2024 MMIT