Health Plan Weekly

Higher-than-expected medical loss ratios (MLRs) in Medicaid were a common — albeit minor — pain point for both Centene Corp. and Molina Healthcare, Inc. when the companies reported their first-quarter 2024 financial results.  

Centene, which reported its quarterly results on April 26, recorded an MLR of 90.9% for its Medicaid line of business, which was higher (worse) than the Wall Street consensus estimate of 90.3%.  

Chief Financial Officer Andrew Asher said during the company’s earnings call that the figure was “a little higher in the quarter than we expected as we continue to work through the appropriate matching of rates and acuity in the short-term.” 

Substantial racial and ethnic disparities in health and health care are pervasive across all states in the U.S., according to The Commonwealth Fund 2024 State Health Disparities Report.

The report evaluated 25 health indicators of health system performance for Black, white, Hispanic, American Indian and Alaska Native (AIAN), and Asian American, Native Hawaiian, and Pacific Islander (AANHPI) populations. It found that racial health disparities are a bigger problem in some states than in others. Massachusetts, Rhode Island and Connecticut saw relatively high performance for all racial and ethnic groups, while Oklahoma, West Virginia and Mississippi performed poorly for all groups.

Walmart Inc. announced on April 30 that it is closing its 51 health centers in five states as well as its virtual care offering. The company said in a press release that it had determined “there is not a sustainable business model for us to continue” with its Walmart Health and Walmart Health Virtual Care centers and added that “the challenging reimbursement environment and escalating operating costs create a lack of profitability that makes the care business unsustainable for us at this time.” Walmart launched the clinics in 2019. The company will continue to operate its nearly 4,600 pharmacies and more than 3,000 vision centers. 

UnitedHealth Group CEO Andrew Witty testified before the Senate Finance Committee and House Energy & Commerce Committe on May 1 about the cyberattack on Change Healthcare, a UnitedHealth subsidiary. Fierce Healthcare reported that Witty said much of Change’s data was stored in data centers rather than on the cloud and that hackers accessed a server that did not have two-factor authentication. Fierce also noted that several politicians criticized UnitedHealth for its massive vertical integration, noting it owns a PBM and is a major player in health care delivery. Axios reported that UnitedHealth “could face more regulation or even calls to divest some of its businesses in the fallout from the hack.” Last month, a bipartisan group of politicians wrote a letter to Witty seeking information about the cyberattack and noted that Change’s systems process about 15 billion transactions each year and are linked to about 900,000 physicians, 118,000 dentists, 33,000 pharmacies and 5,500 hospitals. 

With Humana Inc.’s share price slumping in recent months, one Wall Street analyst points out that conditions may be better than ever for a possible takeover of the Medicare Advantage insurer by The Cigna Group. 

“The math now works for a [Cigna] + [Humana] fusion even with [Humana’s] lower EPS [earnings per share],” wrote Jefferies analyst David Windley in an April 22 note to investors. The two managed care giants were rumored to be in talks to combine at the end of 2023, but the Wall Street Journal reported on Dec. 10 that the firms were walking away from the deal. But that was before Humana cut its full-year EPS outlook when reporting its fourth-quarter 2024 results earlier this year, citing a trend of higher-than-expected utilization that has bogged down the MA-focused carrier’s results since the beginning of 2023. 

The ERISA Industry Committee (ERIC), a benefits trade group for large employers, launched an ad campaign attacking the Biden administration’s mental health parity policies — a notable escalation in plan sponsors’ intensifying opposition to the administration’s approach to mental health care access, which could ultimately lead to litigation.  

In a press release, ERIC said it hopes to influence upcoming mental health parity regulation, noting that “departments of President Biden’s administration, including the U.S. Departments of Health and Human Services (HHS), Labor (DOL) and the Treasury are finalizing proposed rule changes regarding mental health and substance use disorder parity.” The expected rule would be a finalized version of a regulation released in September 2023, which calls for much stricter network adequacy standards than were required in previous parity rulemaking.