Health Plan Weekly

Centene Corp. on July 1 withdrew its earnings guidance for the year, primarily citing struggles in the Affordable Care Act exchange segment. The company’s stock price declined by 40% in the day following the news and closed at $33.78 on July 2, its lowest price since March 2017.

Wells Fargo analysts in a July 1 note wrote that “exchange risk was already” factored into the stock price before the announcement, although they added that the “update is clearly incrementally negative.”

The Senate on July 1 narrowly passed a bill that would lead to deep Medicaid cuts, causing health insurance trade groups to express concern and warn of a major upheaval in the market. The bill was even more drastic than the House version that passed in May and occurred soon after a Commonwealth Fund analysis found that between 2013 and 2023, all 50 states and Washington, D.C., saw a decline in the uninsured rate.

Sara Collins, a senior scholar and vice president at the Commonwealth Fund, said during a media briefing on June 17 that proposed federal policy changes and those already implemented “threaten to reverse the improvements achieved by states, exacerbate areas of slippage and deepen geographic, income and racial and ethnic disparities and health outcomes.”

AHIP and the American Medical Association, trade groups that are typically at odds over health care issues, each applauded the Supreme Court’s ruling on June 27 that upheld the constitutionality of the Affordable Care Act’s preventive care coverage mandate. While two ACA experts tell AIS Health, a division of MMIT, that insurers, providers and millions of people will benefit from the ruling, they note that the judgment also provided power to HHS Secretary Robert F. Kennedy Jr., a vaccine skeptic who they say may influence some of the medications and treatments that are classified as preventive. They add that this case concerned only U.S. Preventive Services Task Force (USPSTF) recommendations and that the plaintiffs have filed similar lawsuits regarding recommendations from the Advisory Committee on Immunization Practices (ACIP) and the Health Resources and Services Administration (HRSA).

Laurie Sobel, an attorney and the associate director for women’s health policy at KFF, tells AIS Health that the Supreme Court agreed with the federal government in the Kennedy v. Braidwood case and ruled that the structure of the USPSTF does not violate the Constitution’s appointments clause. The Court wrote that the HHS secretary “has power to appoint” the USPSTF’s 16 members and also “may remove Task Force members at will, enabling him to supervise and direct them.”

Patrick Conway, a longtime UnitedHealth Group executive and head of the company’s Optum health services division, has taken over as CEO of Optum Health, its health care delivery arm. Bloomberg reported the change, citing a company memo, and said that Conway remains in charge at Optum. Amar Desai, M.D., Optum Health’s former CEO, is now president of Optum’s integrated care division and Optum Health’s vice chairman. Bloomberg noted that Desai will continue working closely with Conway and Stephen Hemsley, who took over as UnitedHealth’s CEO in May.

CMS Administrator Mehmet Oz, M.D. on June 24 said he hopes the country’s dominant PBMs will opt for self-directed reform in the same way major health insurers recently pledged to overhaul prior authorization.

“There’s window now where three big PBMs might actually consider doing away with the rebate/kickback system,” Oz said during the inaugural Washington, D.C., conference held by Transparency-Rx, a coalition of smaller PBMs that supports industry reform and champions transparent business models.