Health Plan Weekly
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Deferred Care Drives Up Employer Health Care Spending, Especially on Oncology
After a year in which health care cost trend flatlined, costs for self-funded plan sponsors increased “significantly” — by 8.2% — in 2021, according to the Business Group on Health’s 2023 Large Employers’ Health Care Strategy and Plan Design Survey. In addition, for the first time in the history of the annual survey, cancer eclipsed musculoskeletal conditions as the top driver of large firms’ health costs.
In 2020, 78% of polled employers said cancer was the top cost-driving condition, and the share rose to 80% in 2021 and 83% in 2022. The percentage of employers identifying musculoskeletal conditions as the most expensive condition dropped each of the three years, from a high of 90% in 2020, down to 84% in 2021 and 76% in 2022.
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Incomes, Consumer Prices, Medicaid Expansion Explain Health Spending Variation Across States
Health care spending per person varied significantly across the nation in 2019, and differences between states grew across time, according to a recent Health Affairs study. State-level health care spending per person ranged from $7,250 in Utah to $14,500 in Alaska in 2019, while annualized growth rates per person ranged from 1.0% in Washington, D.C., to 4.2% in South Dakota from 2013 to 2019.
In 2019, Medicare and Medicaid spending combined accounted for more than one third of total health expenditures in most states, ranging from 27% in Alaska to 48% in Arkansas. The study shows that out-of-pocket spending varied more than overall spending. For example, while South Dakota’s overall health care spending is 50% higher than Arizona, the average South Dakotan spent nearly three times as much out-of-pocket per year ($4,600) compared to the average Arizonan ($1,700).
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News Briefs: HHS Predicts 15M Will Lose Coverage Once Medicaid/CHIP Redeterminations Resume
HHS is currently projecting that 17.4% of Medicaid and Children’s Health Insurance Program (CHIP) enrollees — or about 15 million people — will move out of those programs when the COVID-19 public health emergency (PHE) ends. States have been barred from conducting eligibility redeterminations for Medicaid and CHIP during the PHE, as a condition of receiving enhanced federal funding, but those eligibility checks will resume whenever the PHE ends. Of those expected to lose Medicaid/CHIP coverage, almost one third are expected to qualify for premium tax credits to help defray the cost of Affordable Care Act marketplace plans, and among those people, more than 60% can access a zero-premium plan.
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FTC Fines Broker for Pushing ‘Sham’ Health Insurance Plans
Benefytt Technologies, Inc., a health insurance brokerage controlled by private equity firm Madison Dearborn Partners, LLC, will refund its customers $100 million after the Federal Trade Commission (FTC) found Benefytt knowingly defrauded consumers shopping for Affordable Care Act marketplace plans. Health care experts tell AIS Health, a division of MMIT, that similar schemes involving deceptive and exploitative sales tactics are now a common problem.
The FTC said in a press release that Benefytt misrepresented bundles of short-term, limited duration (STLD) plans and supplemental health insurance products as comprehensive plans that meet the ACA’s standard benefits requirements. Benefytt’s marketing practices were misleading, the FTC said, and involved “lying to consumers about their sham health insurance plans and using deceptive lead generation websites to lure them in.” According to the FTC complaint, Benefytt also “illegally charged people exorbitant junk fees for unwanted add-on products without their permission.”
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Startup Health Insurers Oscar, Clover Signal Course Changes After 2Q
The four publicly traded startup health insurers — Oscar Health, Inc., Bright Health Group, Inc., Clover Health Investments Corp. and Alignment Healthcare, Inc. — continued to post losses in the second quarter of 2022, but two out of the four lost less money than they did in the prior-year period. Beyond their finances, however, some of the companies are making changes to their business strategies in a bid to set a stronger course for the future.
Medicare Advantage-focused Clover Health, for instance, revealed that CEO Vivek Garipalli will be replaced by Andrew Toy, the company’s current president, starting on Jan. 1, 2023. In an Aug. 8 news release, Clover said the move “is the culmination of a succession plan we’ve had in place since Andrew joined Clover as CTO and led the development of Clover Assistant,” referring to the company’s proprietary clinical decision-making tool.
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