Payer

Radar On Market Access: COVID-19 May Drive More Insurers Into ACA Exchanges

May 14, 2020

As the impact of the COVID-19 pandemic continues to reverberate throughout the U.S. economy, it’s become clear that there will be a major enrollment shift away from employer-sponsored plans and into Medicaid and the individual market, AIS Health reported.

As the impact of the COVID-19 pandemic continues to reverberate throughout the U.S. economy, it’s become clear that there will be a major enrollment shift away from employer-sponsored plans and into Medicaid and the individual market, AIS Health reported.

In fact, one recent analysis suggested that there could be “unprecedented growth” in the individual health insurance market. “The impact of COVID-19-related job losses will likely more than double the current enrollment in Individual & Marketplace plans, with the potential for the Individual market to triple in size to over 35 million in a sustained and severe economic contraction,” stated the analysis from A2 Strategy Group.

Such growth, the report said, “will come from newly unemployed individuals in all states who exceed Medicaid eligibility thresholds” because of money they receive from the Coronavirus Aid, Relief, and Economic Security Act. And in states that haven’t expanded Medicaid, nearly all of the newly unemployed who earn below 100% of the federal poverty level could qualify for Affordable Care Act premium subsidies.

Another analysis from the Urban Institute and Robert Wood Johnson Foundation (RWJF), estimated that if U.S. unemployment reaches 20%, 25 million people would lose employer-sponsored health insurance. “Of these, 11.8 million would gain Medicaid coverage, 6.2 million would gain marketplace or other private coverage, and 7.3 million would become uninsured,” it stated.

Katherine Hempstead, the senior adviser to the executive vice president at RWJF, says it’s possible the coming enrollment shifts will cause some health insurers to re-evaluate their level of participation in the ACA exchanges, which some large insurers left in 2017 and 2018 before the market stabilized.

In fact, Maryland Gov. Larry Hogan (R) said on May 12 that UnitedHealth filed to offer plans on the sate’s ACA exchange in 2021, bringing the total number of insurers in that market from two to three.

Ari Gottlieb, a principal at A2 Strategy Group, says the effect may be even stronger after 2021.

“If the market doubles to 25 or 30 million, some of that will probably fall off, but some of that will probably stay,” he says. “I think even a year or two from now, we’re going to have a bigger individual market than we had before.”

Radar On Market Access: CVS Sees COVID Testing Sites as Part of Bigger HealthHUB Strategy

May 12, 2020

Since acquiring Aetna, CVS Health Corp. has touted its HealthHUB stores — which include expanded clinics, labs for health screening and space for wellness pursuits — as the linchpin of its plan to stand out among other large, diversified firms that include a health insurer. Yet as one analyst pointed out during CVS’s first-quarter 2020 earnings call on May 6, that strategy could face new challenges amid the COVID-19 pandemic when many people are reluctant to venture outside their homes.

Since acquiring Aetna, CVS Health Corp. has touted its HealthHUB stores — which include expanded clinics, labs for health screening and space for wellness pursuits — as the linchpin of its plan to stand out among other large, diversified firms that include a health insurer. Yet as one analyst pointed out during CVS’s first-quarter 2020 earnings call on May 6, that strategy could face new challenges amid the COVID-19 pandemic when many people are reluctant to venture outside their homes.

CVS executives said that while the company is indeed seeing less foot traffic at its brick-and-mortar locations, it is still leveraging the power of having a vast retail footprint by offering testing for the new coronavirus, AIS Health reported.

The firm teamed up with federal, state and local governments to open “large-scale diagnostic testing sites across five states,” according to a slide deck that accompanied CVS’s earnings presentation. As of May 4, the company had administered nearly 90,000 tests, and it is planning to establish additional testing sites.

As CEO Larry Merlo put it: “We’re focused on COVID testing today, but there is a broader universe of diagnostics and monitoring that we see becoming an important part of our HealthHUB strategy.”

Merlo also pointed out that virtual visits through the company’s MinuteClinic platform rose 600% in the first three months of 2020 compared with the prior-year quarter. Retail prescription home delivery increased more than 1,000% and specialty pharmacy digital refills jumped about 50%.

The effects of the COVID-19 crisis weren’t all rosy, however. Jonathan Roberts, CVS’s executive vice president and chief operating officer, acknowledged that “the biggest headwind we’re seeing now in pharmacy is really around new therapy starts.” Because doctor visits have decreased significantly, CVS saw at least a 25% dip in new prescriptions in April compared with the same month in 2019, whereas it normally sees about 7% growth.

Overall in the quarter, CVS recorded adjusted earnings per share (EPS) of $1.91, “well above” the Wall Street consensus of $1.62, as Citi analyst Ralph Giacobbe highlighted in a May 6 investor note. Total revenues increased 8.3% in the first quarter of 2020 compared with the prior-year quarter.

MMIT Reality Check on Anemia — Chronic Kidney Disease (May 2020)

May 8, 2020

According to our recent payer coverage analysis for anemia treatments due to chronic kidney disease, combined with news from key healthcare influencers, market access is shifting in this drug landscape.

According to our recent payer coverage analysis for anemia treatments due to chronic kidney disease, combined with news from key healthcare influencers, market access is shifting in this drug landscape.

To help make sense of this new research, MMIT’s team of experts analyzes the data and summarizes the key findings for you. The following are brief highlights. To read the full piece, including payer coverage, drug competition and prescriber trends, click here.

Payer Coverage: A review of market access for anemia treatments due to chronic kidney disease shows that under the pharmacy benefit, about 55% of the lives under commercial formularies are covered with utilization management restrictions.

Trends: In November 2019, AstraZeneca said its FibroGen-partnered drug roxadustat, an oral first-in-class drug to treat anemia in patients with chronic kidney disease, demonstrated positive results in its Phase III trial.

Radar On Market Access: Anthem, Cigna Brace for Recession-Induced Enrollment Shift

May 7, 2020

Anthem, Inc., and Cigna Corp. both reported slightly better-than-expected medical loss ratios (MLRs) as part of their first-quarter 2020 earnings, in part due to delays in elective procedures resulting from the COVID-19 pandemic. Both insurers also reaffirmed their overall earnings-per-share (EPS) guidance for 2020, AIS Health reported.

Anthem, Inc., and Cigna Corp. both reported slightly better-than-expected medical loss ratios (MLRs) as part of their first-quarter 2020 earnings, in part due to delays in elective procedures resulting from the COVID-19 pandemic. Both insurers also reaffirmed their overall earnings-per-share (EPS) guidance for 2020, AIS Health reported.

But the insurers warned that MLRs may tick up later this year. In addition, they predicted that the impact of COVID-19 may lead to significant shifts in enrollment, as workers who are laid off shift to Medicaid or to the Affordable Care Act exchanges.

Anthem posted a first-quarter MLR of 84.2%, slightly better than the consensus estimate of 84.3%, “likely aided to a limited degree by COVID-19 toward the latter part of the quarter,” Citi analyst Ralph Giacobbe pointed out in an investor note.

Anthem’s second-quarter MLR “should be historically low” due to delayed procedures, but that will be offset by a rebound in volumes, buyback suspension and low net interest/investment income during the second half of the year, Jefferies equities analyst David Windley wrote in an investor note.

Anthem management indicated that 40% to 50% of disenrolled commercial lives will move to Medicaid, while 30% will move into individual health insurance, Windley wrote. “However, this creates an unfavorable mix,” with lower per-member per-month payments, especially in Medicaid, and a move to lower-margin products, he noted.

Meanwhile, Cigna reported an MLR of 78.3%, compared with analysts’ consensus estimate of 79.3%, Giacobbe pointed out in an investor note. Cigna is maintaining its 2020 guidance for EPS and revenue, while dropping its outlooks for MLR and other specific financial metrics.

“The impact of COVID-19 is still developing,” Cigna President and CEO David Cordani said April 30. “We clearly see headwinds driven by the recession that it’s causing, including, for example, disenrollment within our commercial customers, both in our integrated medical business [and] our health service business, as well as some pressure in our group disability business.”

However, Cigna expects “the strength of our first quarter to drive us to another strong year for revenue, earnings and free cash flow,” he added.

Radar On Market Access: Humana, Centene Maintain 2020 Earnings Outlook Amid COVID-19 Pandemic

May 5, 2020

Humana Inc. and Centene Corp. are both maintaining their 2020 earnings outlook despite the emergence of the COVID-19 pandemic and economic contraction at the end of the first quarter, AIS Health reported.

Humana Inc. and Centene Corp. are both maintaining their 2020 earnings outlook despite the emergence of the COVID-19 pandemic and economic contraction at the end of the first quarter, AIS Health reported.

Humana’s revenues increased to $18.9 billion, and it reported $5.40 in adjusted earnings per share (EPS), beating the Wall Street consensus of $4.66 adjusted EPS. Centene’s first quarter revenues increased 41% year-over-year to $26 billion, and it reported an adjusted EPS of $0.86. Centene fell short of the consensus with $0.99 adjusted EPS. Both insurers affirmed their projections for the end of the year, with Humana forecasting adjusted EPS of $18.25 to $18.75 and Centene $4.56 to $4.76.

But both companies warned that the pandemic and recession presented substantial risk, and noted that utilization could spike in the latter half of 2020 due to pent-up demand. They also reported that utilization dropped toward the end of the first quarter, and anticipated the same result for the second.

Analysts were cautiously optimistic about both firms’ outlook for the rest of the year. “We believe that Humana boasts a compelling growth opportunity in the increasingly appealing [Medicare Advantage] market. Furthermore, the company also has an opportunity to drive margins given a potentially more favorable reimbursement environment and the maturation of its high-growth member base,” Oppenheimer’s Michael Wiederhorn wrote in an April 29 note.

Despite Centene’s seemingly less impressive results, analysts were positive or neutral about the firm’s first-quarter performance.

Windley wrote in an April 28 note regarding Centene that “we aren’t expecting ridiculously low 2Q [medical loss ratios] as management guards against an increase in utilization and claims severity. That said, the delay in procedures and incremental revenue from higher Medicaid/[health exchange] membership helps absorb new headwinds such as slower WellCare synergy capture, COVID-19 treatment costs, and adverse impacts on investment income/interest expense.”

Though Centene’s results were less robust than Humana’s, the company indicated it is in a strong position for the remainder of the year. The company has a large Medicaid managed care book, and Medicaid enrollment is certain to spike due to layoffs caused by the COVID-19 pandemic.

MMIT Reality Check on Ophthalmic Anti-Inflammatory (Apr 2020)

May 1, 2020

According to our recent payer coverage analysis for ophthalmic anti-inflammatory treatments, combined with news from key healthcare influencers, market access is shifting in this drug landscape.

According to our recent payer coverage analysis for ophthalmic anti-inflammatory treatments, combined with news from key healthcare influencers, market access is shifting in this drug landscape.

To help make sense of this new research, MMIT’s team of experts analyzes the data and summarizes the key findings for you. The following are brief highlights. To read the full piece, including payer coverage, drug competition and prescriber trends, click here.

Payer Coverage: A review of market access for ophthalmic anti-inflammatory treatments shows that under the pharmacy benefit, almost 57% of the lives under commercial formularies are covered without utilization management restrictions.

Trends: In March 2020, Noveome Biotherapeutics said it will evaluate its ST266, a first-of-its-kind cell-free platform biologic drug that was initially developed for ophthalmology indications, as a potential treatment of severe cytokine storm associated with COVID-19.