Health Plan Weekly

  • As Hospitals’ Commercial Prices Keep Rising, Experts Float Solutions

    Hospital and outpatient service prices paid by commercial health plans grew in 2022, reaching a national average of 254% of Medicare’s compensation rate that year, according to RAND Corp. researchers. Experts tell AIS Health that they agree with the study’s conclusions that market consolidation is a key contributor to high prices and that higher costs are not correlated with higher quality. But they also say payers aren’t powerless to stem the tide of rising costs. 

    According to the May 13 RAND research, which is based primarily off an analysis of commercial claims data from all 50 states and all-payer claims database data in states where it is available, hospital and outpatient prices have grown substantially since earlier versions of the same research was published that studied the 2010s. (For a more detailed look at the RAND data, see this infographic.) In addition, the study concluded that there is a strong correlation between market consolidation and high prices. 

  • Medicare, Medicaid Segments May Be a ‘Mess,’ but Bounce-Back Expected

    Although insurers have bet big — and cashed in — on privatized Medicare and Medicaid plans, recently those business lines have shown some signs of distress.  

    For example, Humana Inc. and CVS Health Corp.’s Aetna this week put concrete numbers behind the Medicare Advantage membership losses that they expect to sustain next year due to significant headwinds facing the MA industry. And heightened medical loss ratios in managed Medicaid dinged the otherwise solid first-quarter 2024 financial results recently reported by Centene Corp. and Molina Healthcare, Inc. 

  • Little Engines That Could? Analysts See Lots to Like in Insurtechs’ 1Q

    Although first-quarter performance was decidedly mixed for the country’s largest publicly traded health insurers, three startup “insurtechs” — Oscar Health, Inc., Alignment Healthcare, Inc. and Clover Health Investments Corp. — largely impressed industry analysts with their financial results.  

    Oscar had a particularly outstanding showing, as the Affordable Care Act marketplace-focused insurer recorded its first quarterly profit since its founding in 2012 (the firm went public in 2021). Its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $219 million, which was approximately $100 million ahead of the Wall Street consensus estimate. The firm reported diluted earnings per share of 62 cents, compared to an 18-cent loss in the first quarter of 2023. 

  • Brokers Blame Tech Vulnerabilities for ACA Plan Switching, Signup Scams

    CMS recently said it received tens of thousands of complaints from people who were enrolled in Affordable Care Act marketplace plans without their consent by unscrupulous brokers during the first three months of this year. That led the National Association of Benefits and Insurance Professionals (NABIP), a broker trade group, to criticize CMS for its handling of the situation and claim that all brokers had been unfairly blamed by the agency.  

    But one industry expert says that there is “plenty of blame to go around” for the unauthorized enrollments, which can result in financial harm to plan members and insurers alike. 

  • Hospitals Charged Private Health Plans 2.5 Times Medicare Rates in 2022

    Employers and private insurers, on average, paid 254% of what Medicare did for the same inpatient and outpatient services at the same facilities in 2022, according to a new RAND Corp. study.

    The report examined data from more than 4,000 hospitals across all U.S. states except Maryland and found that average relative prices paid by private insurers increased from 241% of Medicare rates in 2020 to 254% in 2022, which was largely driven by growth in inpatient relative prices.

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