Health Plan Weekly

  • News Briefs

     The Dept. of Justice’s antitrust division is considering whether to file a suit aiming to block UnitedHealth Group’s $8 billion proposed acquisition of Change Healthcare, according to press reports. The Biden administration and Democrats have argued in recent months that health care industry consolidation has harmed consumers and the economy, and targeting the UnitedHealth/Change rollup would be the first Biden-directed sign that the administration intends to take a more confrontational stance against mergers and acquisitions than its recent predecessors.

     The DOJ has joined several whistleblower complaints against Kaiser Permanente alleging the combined payer-provider received artificially inflated reimbursement for its Medicare Advantage plans. The lawsuits, filed under the whistleblower provision of the False Claims Act, argue that Kaiser “submit[ted] inaccurate diagnosis codes for its Medicare Advantage Plan enrollees in order to receive higher reimbursements,” according to a DOJ press release.

  • Cigna Beats 2Q Expectations With Aid From Evernorth

    Cigna Corp. had a better second quarter than equities analysts expected, leading to positive but cautious reviews by Wall Street on the health insurer’s outlook for the rest of the year. Cigna executives credited strong returns from the payer’s Evernorth health services division, saying that they offset higher-than-expected costs related to COVID-19.

    Cigna took in total revenues of $43.1 billion in the second quarter, and adjusted income from operations was $1.8 billion, or $5.24 per share. That earnings per share figure beat Wall Street’s projection of $4.96, according to Citi analyst Ralph Giacobbe. However, Cigna’s reported 85.4% medical loss ratio was higher than the 81.8% projected by analysts.

  • CVS/Aetna Has Solid Quarter Despite COVID Headwinds

    CVS Health Corp., the parent company of health insurer Aetna, reported higher than expected profits in the second quarter of 2021. The pharmacy, health insurance and retail giant took in $2.42 in earnings per share, beating Wall Street’s estimated EPS of $2.07.

    CVS reported $72.6 billion in overall revenue in the second quarter, an 11.1% increase from 2020. Citi analyst Ralph Giacobbe wrote in an Aug. 4 note to investors that the results were “well ahead” of the consensus projection of $70.2 billion in revenue.

  • Major Insurer Groups Oppose ACA Signup Period Extensions

    In recent comments submitted to CMS, the two major insurer trade groups — who thus far have mostly been on the same page as the Biden administration — object to proposals that would lengthen the annual enrollment window for Affordable Care Act exchange plans and add a new, monthly signup period for low-income individuals.

    Underpinning the trade groups’ objections are concerns about adverse selection, which occurs when people wait until they’re sick or otherwise need costly health care services to purchase insurance. Similar to practices in the employer-sponsored insurance world and Medicare, the ACA marketplaces curb adverse selection by limiting enrollment to an annual signup window known as the open enrollment period (OEP). To sign up during a midyear special enrollment period (SEP), people generally need to have experienced a qualifying life event such as a job loss or marriage.

  • Texas Prior Authorization Law Ignites Accountability Debate

    To health insurers, a new Texas law that significantly limits prior authorization practices will effectively eliminate health care providers’ accountability to offer safe, high-quality and cost-effective care. To Texas providers, the measure is a long-awaited first step toward having clinicians spend less time on arduous paperwork and more time on patient care.

    Industry observers say both sides have valid arguments, but they also worry that Texas’ legislation may be so difficult to implement that even its best intentions could fall flat.

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