Health Plan Weekly

With Vice President Kamala Harris now poised to get the Democratic nomination for president, Wall Street analysts have been busy prognosticating what that means for the array of for-profit health care firms they cover — including health insurers. 

So far, select analysts are predicting that Harris’ ascendence will give Democrats a greater chance of winning the election, which would be bad news for Medicare Advantage-focused insurers but good for those more focused on Medicaid and the Affordable Care Act exchanges. 

Molina Healthcare, Inc. has agreed to pay $350 million to acquire ConnectiCare, a subsidiary of EmblemHealth that covers about 140,000 medical livesa in Connecticut. The July 23 announcement occurred one day before Molina reported second-quarter earnings results that beat Wall Street analysts’ projections. The ConnectiCare deal is expected to close in the first half of next year and is subject to regulatory approvals. 

Fellow insurer Centene Corp., meanwhile, reported second-quarter financial results on July 26 that underscored the elevated cost trends it’s seeing in its dominant Medicaid segment. Like other insurers, Centene is feeling the effects of a higher-acuity risk pool created by the exodus of millions of people from the Medicaid rolls since states restarted routine eligibility checks last spring. Still, other positive developments for Centene led one Wall Street analyst to declare its quarterly performance “mixed.” 

CMS on July 19 took new steps to protect Affordable Care Act marketplace enrollees from unauthorized plan switching — moves that were applauded by the independent broker industry. One policy expert says the new policies are welcome and should help with unauthorized plan switching, but she suggests that more must be done to prevent unauthorized plan signups. Meanwhile, a new Senate bill and industry efforts could make a difference in unauthorized signups. 

In a July 19 press release, CMS said it would make notable changes in the way it processes plan switches on HealthCare.gov, including: 

Legal experts during a recent panel discussion said federal agencies and lawmakers have new uncertainty around health care regulation in the aftermath of the Supreme Court’s decision to end a legal concept that gave agencies broad leeway when they issued rules.  

In its rulings in Relentless v. Department of Commerce and Loper Bright Enterprises v. Raimondo, the Supreme Court effectively repealed Chevron deference, a legal precedent that is more than 40 years old. The idea behind it is that agency staff have subject matter expertise that Congress is unlikely to share, and Congress couldn’t be expected to continually update statutes to address every emerging issue of importance to a specific sector of the economy. 

States have been pursuing reforms that would limit hospitals’ ability to charge facility fees for routine medical services delivered in outpatient settings, which drove up enrollees’ premiums and out-of-pocket health care costs, according to a study by Georgetown University’s Center on Health Insurance Reforms.

Facility fees are charges from hospitals and other institutional health care providers that ostensibly cover their operational expenses for providing care. When hospitals acquire or affiliate with physician practices and other outpatient health care providers — a trend seen in the U.S. in recent years — ambulatory services provided at outpatient practices often generate a second bill for the facility fee on top of the professional fees the practitioners charge.