Health Plan Weekly
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Half of People Slated to Lose Medicaid May Transition to Employer Plans
When Medicaid eligibility redeterminations start back up in April, about 9.6 million Medicaid enrollees could transition to employer-sponsored insurance, 2.6 million could move to Children’s Health Insurance Program (CHIP) coverage, and 3.8 million could become uninsured, according to a report released by AHIP. Based on an Urban Institute projection and data on historical coverage transitions from the Current Population Survey Annual Social and Economic Supplement, researchers at NORC at the University of Chicago estimated that in almost all states, the majority of Medicaid enrollees who become disenrolled will transition to ESI, ranging from 57.1% in Delaware to 48.9% in Georgia. Nationwide, over 20% of individuals losing Medicaid coverage during redetermination may become uninsured. Variation across states ranged from 26.2% in South Dakota to 17.7% in Massachusetts.
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News Briefs: Failed Silicon Valley Bank Was One of Oak Street Health’s Lenders
Oak Street Health, Inc., which CVS Health Corp. plans to purchase for $10.6 billion, had a financial arrangement with the now-failed Silicon Valley Bank (SVB), according to an SEC filing. SVB is a lender under Oak Street’s $300 million term loan credit facility along with Hercules Capital Inc., and Oak Street has drawn down just $75 million of that so far. “Of the remaining undrawn $225 million, SVB was committed to providing $45 million,” the filing stated. “While the Hercules Capital portion of the term loan commitment is unaffected, it is unclear at this time whether and to what extent the Company will be able to draw upon SVB’s remaining portion of the term loan commitment.” SVB also provided Oak Street with commercial banking and treasury management services, but Oak Street “maintained less than a quarter of its cash, cash equivalents and marketable debt securities at SVB” and expected to be able to have full access to its funds as of March 13, thanks to the U.S. Treasury’s move to ensure all the bank’s depositors could do so. U.S. financial regulators shut down SVB — a banking partner for many venture capital firms that fund startups — on March 10 after a swift collapse precipitated by a bank run. It was the second-largest bank failure in U.S. history.
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Biden Budget Targets Drug Pricing, Enhanced ACA Subsidies, Mental Health Coverage
Although the Inflation Reduction Act (IRA) enacted significant health care provisions, such as giving Medicare the authority to negotiate prices for select prescription drugs and temporarily extending enhanced premium tax credits for Affordable Care Act plans, President Joe Biden in his fiscal year 2024 budget proposal made it clear that those and other health reforms don’t go far enough.
However, the health care industry will have to wait for more granular details about, for example, how many more drugs Biden plans to add to the price-negotiation list, HHS officials indicated during a May 9 call with reporters. And Biden must also convince a divided Congress to put his proposals into legislation.
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As Dems Push HHS to Limit Short-Term Plans, Market Impact Remains Murky
Amid mounting pressure from Democratic lawmakers and advocacy groups, a rule could be coming as soon as April that rolls back Trump administration regulations expanding the availability of short-term, limited-duration insurance (STLDI) plans. Health policy experts say health insurers are likely to have varying views about such a regulation, and its effect on the Affordable Care Act marketplaces is tough to predict given how little data is available about STLDI.
Among “plans that had invested in the marketplaces, I think they had a lot of concern about the Trump administration short-term plan rule…[but] there are others that were deciding to invest in short-term plans,” says Sabrina Corlette, director of Georgetown University’s Center on Health Insurance Reforms. “So I’m not sure there’s unanimity in the industry on whether Biden rolling back the Trump rule is a good thing or a bad thing.”
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Washington’s Public Option Boasts Tripled Enrollment, Lower Premiums
Washington’s “public option” has had a substantive downward impact on premium rates on the state’s individual exchange, according to state officials — encouraging news for policymakers who have tinkered with the insurance program after it disappointed in the first two years after it launched. Experts tell AIS Health, a division of MMIT, that the results bode well for other states’ public options, even though Washington is still adjusting important elements like network scope and reimbursement rates.
The Washington State Health Care Authority (HCA), one of the state agencies that administers the public option — called Cascade Select — said that in a February report enrollment more than tripled for plan year 2023, increasing from 8,000 in 2022 to 27,000 people statewide. The same report also said that “Cascade Select plans are the lowest cost Silver premiums available on the Exchange in 25 counties, up from 13 counties in 2022.” HCA said Cascade Select plans’ average gross premium rates this year decreased by 3%, compared to average rate increases of 8% for other exchange plans. According to a December 2022 HCA report, Cascade Select plans are available in 34 of 39 counties, up from 19 in 2021.
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