Health Plan Weekly

The Senate confirmed Robert F. Kennedy Jr. as HHS secretary on Feb. 13. The longtime vaccine critic was elevated to the high-profile health care office after assuaging the concerns of key Senate Health, Education, Labor, and Pensions (HELP) Committee member Sen. Bill Cassidy, M.D., (R-La.). Health care trade association reactions have been optimistic, with most indicating they are eager to work with Kennedy on various issues, such as PBM reform and population health. “Small business-owned pharmacies are disappearing, and pharmacy deserts are forming, because of the business practices of Big Insurance and their PBM subsidiaries, and we very much hope Kennedy and the Trump administration will support our effort to rein in these bad actors,” said National Community Pharmacists Association CEO Douglas Hoey. Said Association for Community Affiliated Plans CEO Margaret Murray: “Opportunities abound to bring improvements to our nation’s system for health coverage and care — many of which will require outside-the-box thinking. We look forward to working with Secretary Kennedy and his team to tackle the pressing issues of access to coverage and care, disease prevention, and public health improvement.” And Pharmaceutical Research and Manufacturers of America CEO Stephen J. Ubl said, “During his confirmation hearings, Secretary Kennedy discussed the need to reduce the burden of chronic disease, improve health outcomes and make health care more affordable for the American people. Our industry is eager to work with the Trump administration to help address these urgent priorities.” 

Molina Healthcare, Inc.’s fourth-quarter results came in below the company’s and analysts’ expectations, driven by higher-than-anticipated care utilization among its members. The insurer also disclosed that it anticipates the trend to continue this year, a surprise to investors.   

For the fourth quarter, Molina reported adjusted earnings per share (EPS) of $5.05, well below the $5.87 Wall Street consensus estimate. The insurer also had a 90.2% medical loss ratio (MLR), higher (or worse than) the 88.7% consensus. 

Despite reporting fourth-quarter earnings on Feb. 4 that exceeded Wall Street’s projections, Centene Corp. saw its stock price decline by nearly 6%, which analysts attributed to potential concerns about the insurer’s Medicaid and Affordable Care Act exchange segments.  

Centene in the fourth quarter had adjusted earnings per share (EPS) of 80 cents, significantly above the Wall Street consensus estimate of 49 cents, and $40.8 billion of revenue, higher than the $39.1 billion consensus. And its 89.6% medical loss ratio (MLR) was slightly below (better than) the 90% consensus. 

The Cigna Group recently announced it is working to streamline its prior authorization (PA) processes. Experts tell AIS Health that while PA improvements are sorely needed, the move appears to mostly be aimed at quelling public outcry about health insurers that followed the December shooting death of UnitedHealthcare CEO Brian Thompson. 

“You could not even pretend that you’re responding to the firestorm that the Brian Thompson murder opened up if you weren’t addressing prior authorization,” Michael Abrams, managing partner at consulting firm Numerof & Associates, tells AIS Health, a division of MMIT. “That was one of the key sore points for people across the country.” 

While 2024 was an especially challenging year for health insurers, a major credit-rating firm is now predicting that 2025 and beyond may not be that much better.  

Specifically, Moody’s Ratings said in a newly issued report that it is changing its outlook on the health insurance sector from stable to negative.  

The company noted that although major insurers’ earnings growth is likely to remain in the low single digits, “insurers will continue to grapple with medical costs in excess of reimbursement rates” for both Medicare Advantage and Medicaid, “while commercial coverage also faces continued high medical costs.” Moody’s cited projections in PwC’s 2025 Medical Cost Trend Report, which estimated that commercial group medical cost trend in 2025 will be at its highest level in 13 years.