Health Plan Weekly

The Cigna Group posted results for the third quarter of 2023 that impressed Wall Street, driven by a lower-than-expected medical loss ratio (MLR). However, Cigna executives faced questioning from analysts on potential PBM regulations. 

Cigna enjoyed relatively low care utilization, with MLR at 80.5%, beating the Wall Street consensus projection by 12 basis points. The managed care division’s adjusted revenues were $12.7 billion, up 14% year over year. 

“Our medical care ratio was better than expectations, driven by our U.S. commercial business. More specifically, our favorable [MLR] performance was a reflection of ongoing disciplined pricing and continued affordability initiatives,” said Cigna Chief Financial Officer Brian Evanko during a Nov. 2 earnings call. 

In the third quarter, CVS Health Corp. performed well overall, but the firm’s health insurance division was a drag on profits due to higher-than-expected utilization, especially in Medicare Advantage. However, a big gain in MA Star Ratings could bode well for the firm’s health benefits division going forward. 

CVS faced a higher-than-expected medical loss ratio (MLR) in its health benefits division, Aetna, exceeding the Wall Street consensus by 140 basis points. That high utilization primarily took place in Aetna’s MA book of business, according to CVS executives. 

As of Nov. 1, nearly 10.1 million people had been disenrolled from Medicare during the resumed eligibility redetermination process, according to KFF’s Medicaid Enrollment and Unwinding Tracker. KFF, which compiles data from CMS and state websites, noted that 35% of people with a completed renewal application were disenrolled from Medicaid, while the remaining 65% had their coverage renewed. The disenrollment rates range from 10% in Illinois to 65% in Texas. During most of the COVID-19 public health emergency, states have been banned from conducting routine eligibility checks on Medicaid beneficiaries, but that process restarted on April 1. 

Medica, which offers health insurance coverage in 12 states, has promoted Lisa Erickson to president and CEO, replacing John Naylor, who announced his resignation in July. Erickson joined Medica as chief financial officer in April after spending three and a half years as senior vice president of industry and network relations at Optum, UnitedHealth Group’s health services subsidiary. Medica is based in Minnetonka, Minnesota, a Minneapolis suburb. 

Blue Cross Blue Shield of North Carolina plans to acquire all 55 North Carolina locations of FastMed, an urgent care provider in which it had a minority investment, according to an Oct. 20 press release. Experts tell AIS Health, a division of MMIT, that the deal is a smart move, as long as Blue Cross NC has a sound strategic approach to operating the clinics. 

Insurers have acquired plenty of providers in recent years, but larger, publicly traded insurance companies have led that charge. The deal stands out for two clear reasons: First, Blue Cross NC is a regional carrier — albeit a large one, with 2.3 million covered lives, according to AIS’s Directory of Health Plans. Second, most payer acquisitions of providers have not targeted urgent care operations.