Health Plan Weekly

Medicaid eligibility redeterminations will restart in just a few weeks, on April 1, but few beneficiaries know that they could lose health insurance benefits in the coming months, according to a new poll from the Urban Institute and Robert Wood Johnson Foundation (RWJF). Although some plans are taking proactive steps to manage eligibility checks, experts tell AIS Health, a division of MMIT, that many aren’t, despite the potential for significant losses of revenue for Medicaid managed care organizations (MCOs). 

The Urban Institute-RWJF poll found that in December, 64.3% of adults had “heard nothing at all about the return to [the] regular Medicaid renewal process.” Rates of awareness of eligibility redeterminations varied little by region, with all regions reporting a lack of awareness between 61.3% and 67.6%. Differences were also marginal across expansion and non-expansion states.  

Government-funded health plans have become highly profitable for the country’s largest insurers as Medicaid rolls have swelled and as more and more seniors choose Medicare Advantage plans. Yet analysts say changes are coming that may partially even the playing field between smaller health plans and industry heavyweights, which command the bulk of government business.

A new report from the insurance-focused credit rating firm A.M. Best — titled “US Health Insurers Prepare for Shift Driven by End of Government Mandates” — stated that health plans overall “have reported good top-line growth over the last two years, with premium revenues up 8.2% in 2021 and 10.9% through the third quarter of 2022.”

By the end of 2021, gross margins per enrollee in the Medicare Advantage market had returned to pre-pandemic levels, and were significantly higher than gross margins in other health insurance markets, according to a recent Kaiser Family Foundation analysis. In 2021, gross margins for MA plans averaged $1,730 per enrollee, more than double the margins in the individual market ($745), the fully insured group ($689) and the Medicaid managed care market ($768). Gross margins for the individual market and group markets were 36% and 17% lower, respectively, in 2021 than they were in 2019, whereas the gross margins per enrollee for Medicaid managed care plans were higher in 2021 than pre-pandemic.

Legislative leaders in North Carolina have struck a deal to expand Medicaid in the state, although the measure won’t be voted on until later this month at the earliest. During a news conference on March 2, state House Speaker Tim Moore and Senate leader Phil Berger, both Republicans, touted the agreement as a major accomplishment for North Carolina, which is one of 11 states that has not yet expanded Medicaid eligibility under the Affordable Care Act. “What a huge policy direction this is that will provide help for so many in this state, but it’s going to do it in a way that’s fiscally responsible,” Moore said, according to the Associated Press. Under the agreement, which was still being drawn up at press time, the state’s 10% share of covering the Medicaid expansion population would be paid through assessments on hospitals. Previously, the Urban Institute estimated that expanding Medicaid could reduce the uninsured population by 30%, or 346,000 people, in North Carolina. 

Humana Inc. will exit the commercial insurance business and focus exclusively on government books of business, the company said on Feb. 23. Industry analysts say it was a wise strategic move, and experts tell AIS Health, a division of MMIT, that the decision will have a marginal impact on Humana’s profits.  

Humana said that “following a strategic review,” it has decided to shelve its Employer Group Commercial Medical Products (FEHB) business — which includes all fully insured, self-funded and Federal Employee Health Benefit plans — over the next 18 to 24 months. A press release said the division “was no longer positioned to sustainably meet the needs of commercial members over the long term or support the company’s long-term strategic plans.” The streamlining move comes on the heels of Humana’s divestment of its hospice business during 2022; the firm also executed a “value creation plan” that executives say delivered $1 billion in additional earnings.