Health Plan Weekly

  • Commercial-to-Medicare Price Ratios Remain Stable, Vary Across Regions

    Commercial health plans pay much higher prices for hospital care than public payers, but just how much higher those prices are is far from uniform across the country. Between 2012 and 2019, average commercial-to-Medicare price ratios were relatively stable, with a 7% increase, but there were large increases in some hospital referral regions (HRRs) and reductions in others, according a study published in Health Affairs. Researchers suggested that restraining the growth rate of HRR commercial price ratios to the national average “would have reduced aggregate health care spending by $39 billion in 2019.”
  • News Briefs: Public Health Emergency Gets Another Extension

    The Biden administration extended the COVID-19 pandemic public health emergency (PHE) through July 15. The PHE declaration makes possible enhanced Medicaid funding — in exchange for states pausing eligibility redeterminations — and expanded telehealth flexibilities for Medicare and Medicaid beneficiaries. As a condition of receiving enhanced federal funds during the PHE, states are required to ensure continuous Medicaid and CHIP coverage for most enrollees, leading to a nearly 18% jump in Medicaid enrollment. CMS has promised to give states at least 60 days’ notice prior to ending the PHE and 12 months after the month in which the PHE ends to complete eligibility redeterminations. Ultimately, “with the recent rollover of COVID-19 hospitalization activity, we would not be surprised if this is the last extension of the COVID-19-related PHE by the Biden administration,” Citi analyst Jason Cassorla predicted.
  • Amid ‘Family Glitch’ Fix, Enhanced ACA Subsidy Expiration Looms

    While the Biden administration has proposed a long-awaited fix for the Affordable Care Act’s “family glitch” — potentially making coverage more affordable for thousands — the looming expiration of major ACA subsidy expansion threatens to overshadow that progress.

    Health insurers that spoke to AIS Health, a division of MMIT, seem concerned about the potential drawback of generous financial help for exchange enrollees, but are not necessarily ready to hit the panic button yet.

    “We have the unfortunate benefit, I’d characterize it, as having been through in the past other situations where there was uncertainty about the future of the market,” says Bill Tuthill, vice president of market strategy and federal markets for Highmark Inc. Perhaps the most frightening times occurred when all or major parts of the ACA were in danger of being struck down by the Supreme Court — but that threat didn’t pan out, Tuthill tells AIS Health, a division of MMIT.

  • Can Purchaser Groups Slow Down Health Care Price Growth?

    For years, health plan sponsors have banded together in purchaser groups in an effort to keep prices down and share benefit design best practices. Yet new research from the Commonwealth Fund indicates that purchaser groups have had marginal success in slowing the growth of health care costs.

    Despite these limitations, health care insiders tell AIS Health, a division of MMIT, that purchaser groups have an important role to play in managing price growth. They also say that, while hospital consolidation has a large role in driving up health care prices, health insurers have not done their part to stop prices from increasing — and in fact may have incentives to keep prices rising.

  • UnitedHealth, Change Signal Support for Salvaging Their Deal

    Both UnitedHealth Group and Change Healthcare Inc. are making it increasingly clear that they aren’t giving up on their proposed $13 billion transaction despite federal regulators’ move to block the deal. However, one antitrust attorney is skeptical that the two companies will ever end up combining.

    Bloomberg reported on April 1 that Change “is in advanced talks” to sell its payment integrity business — ClaimsXten — to private equity firm New Mountain Capital for more than $2 billion, citing “people with knowledge of the matter.” The news outlet noted that no deal had yet been struck, and that it is not clear whether the divestment would still proceed if UnitedHealth’s deal to buy Change unravels.

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