Health Plan Weekly

Fresh off of touting its organic Medicaid growth during its second-quarter 2022 earnings call, Humana Inc. recently unveiled an acquisition that will help the insurer grow its Medicaid business inorganically as well. Industry analysts say it’s a sound strategic move, but they add that Humana’s growing Medicaid assets aren’t likely to eclipse its focus on Medicare Advantage anytime soon. 

The Louisville, Ky.-based company said on Aug. 12 that it will purchase substantially all the assets of Inclusa, which provides long-term services and supports to about 16,600 older adults and adults with disabilities through Wisconsin’s Family Care program. Humana already has a Medicaid presence in Wisconsin, having purchased the insurer iCare there in 2020.  

With the Inflation Reduction Act (IRA) now signed into law by President Joe Biden, analysts are predicting that some — but not all — of its health care provisions will be a boon for the managed care industry. 

In a new report, insurance industry-focused credit rating firm A.M. Best noted that insurers estimated 2 million to 3 million people would drop their Affordable Care Act exchange policies if enhanced subsidies — which were ushered in as part of coronavirus relief legislation — expired in 2023. The IRA prevented that outcome, however, by extending subsidies for three years. The increased financial aid for enrollees both eliminated the subsidy cliff for higher earning individuals and provided access to zero-premium plans for people on the lower end of the income scale, helping drive enrollment to a record high in 2022. 

Now that the Inflation Reduction Act (IRA) has surmounted the key hurdle of passing the Senate — and is expected to soon pass the House of Representatives as well — the Affordable Care Act exchange market is set for another late-season policy shift that could alter next year’s premium rates. However, experts tell AIS Health that the effect on carriers’ overall premium calculations won’t be as significant as the impact on consumers’ out-of-pocket insurance expenses.

The IRA extends for three years the ACA subsidy expansion that has been in place since midway through the 2021 plan year thanks to the American Rescue Plan Act (ARPA), a coronavirus relief package. ARPA’s main impacts were twofold: First, it eliminated the subsidy cliff for higher-income individuals by extending eligibility for advance premium tax credits to include people who have incomes over 400% of the federal poverty level (about $54,000 for a single person or $111,000 for a family of four in 2022). The law also increased subsidy levels for those already eligible, setting benchmark silver premium contributions at $0 for all enrollees with incomes below 150% of FPL (about $20,000 for one person or $42,000 for a family of four).

Six payers have signed a memorandum of understanding (MOU) to become the first members of the California Advanced Primary Care Initiative, a new program intended to expand the use of value-based primary care in the state.

The initiative is in its early stages, and plenty of work needs to be done to finalize the plans, according to participants in the program who spoke with AIS Health, a division of MMIT. But the agreement calls for the companies to work together to increase their investment in primary care, contract with providers in value-based arrangements, adopt measures that will be publicly released, and hold practices accountable for meeting benchmarks and reward them for strong performance.