Health Plan Weekly

While deal talks between The Cigna Group and Humana Inc. have reportedly fizzled, Cigna’s desire to sell its Medicare Advantage business is apparently still alive and well. Health Care Service Corp. and Elevance Health, Inc., are the two contenders for Cigna’s MA segment, which could fetch more than $3 billion, according to a report from Bloomberg, citing anonymous sources.  

Industry observers say they aren’t surprised that Cigna is still trying to offload its MA book of business, even if doing so is no longer necessary to fend off antitrust scrutiny associated with a Cigna-Humana megamerger. What’s less clear, they say, is what Cigna’s growth strategy would then look like. 

The Lower Costs, More Transparency Act (H.R. 5378), which the U.S. House of Representatives passed on Dec. 11, contains several provisions that would impact health insurance companies such as the requirement that negotiated rates between payers and providers become public. Meanwhile, U.S. Sen. Mike Braun (R-Ind.) has proposed similar legislation that would amend the Public Health Service Act and provide for more health care price transparency.  

Taken together with the implementation two years ago of transparency regulations for hospitals and insurers, the bills indicate “there’s a broad recognition that we’ve already moved forward in starting to make this data public, so let’s just improve that in a way that works,” according to Dania Palanker, assistant research professor at Georgetown University’s Center on Health Insurance Reforms.  

Self-funded health plans backed by large employers are expanding the amount and quality of behavioral health benefits available to their members, but a new report prepared by Milliman Inc. shows that those plans’ members will likely have a hard time using those benefits due to provider shortages. One expert says that to overcome entrenched, structural problems in behavioral health access, plan sponsors must employ creative solutions and be willing to boost reimbursement to behavioral health providers. 

The Dec. 13 Milliman report indicates there is high demand and poor access to mental health care across the country, confirming what other research and anecdotal evidence has shown in recent years. Public health data compiled by the Centers for Disease Control and Prevention’s National Center for Health Statistics and analyzed by Milliman confirm that the most dire outcomes of untreated behavioral health conditions, deaths by suicide and overdose, respectively increased by 32% and 376% between 2001 and 2021.  

Bright Health Group, Inc. suffered another blow on Dec. 13, when the foundering startup insurer revealed that Molina Healthcare, Inc. will pay less than originally planned for Bright’s California Medicare Advantage business. Molina now plans to pay $425 million for the California business, instead of the originally announced $510 million — a development that could complicate the ongoing liquidation of several Bright subsidiaries and its Affordable Care Act risk adjustment repayment agreement with CMS. 

According to a Molina press release from Dec. 18, “the purchase price for the transaction, net of certain tax benefits, is reduced from the previously announced $510 million to approximately $425 million, and now represents 23% of expected 2023 premium revenue of $1.8 billion.” Molina expects the deal, which it predicts will close “on or about January 1, 2024,” will add $1.00 per share “to new store embedded earnings” in the coming year.