Health Plan Weekly

Medicare Advantage now enrolls more than 30.6 million individuals, including more than 25 million in individual MA plans, according to the latest monthly enrollment data from CMS. Industry trade group AHIP called the information “cause to celebrate,” noting that “just 10 years ago, the program had 13 million enrollees.” Enrollment in the private Medicare plans is likely to rise more in the short term, however, as the 30.6 million figure reflects only those signups accepted through Dec. 2, 2022, and thus does not capture the full outcome of the Annual Election Period that ran from Oct. 15 through Dec. 7, Citi analyst Jason Cassorla pointed out in a Jan. 17 research note.  

The percentage of Americans who said they or a family member put off medical treatment due to cost rose to 38% in 2022, representing a 12-percentage-point increase compared to 2021. That’s according to a new Gallup poll, which noted that the percentage of Americans reporting deferring care due to cost was at its highest level since Gallup began its survey in 2001. That finding comes after inflation reached the highest point in 40 years in 2022, and in the wake of “two consecutive 26% readings during the COVID-19 pandemic that were the lowest since 2004.” Gallup also added that “lower-income adults, younger adults and women in the U.S. have consistently been more likely than their counterparts to say they or a family member have delayed care for a serious medical condition.” 

Right before the holidays, the U.S. Dept. of Defense (DOD) offered a gift to Humana Inc., renewing its contract to manage health care services for TRICARE beneficiaries via a new $70.9 billion pact that begins in 2024. Yet Centene Corp. received an unwelcome surprise when it learned that its current TRICARE contract will expire at the end of 2023 and then move to a company called TriWest Healthcare Alliance.  

Meanwhile, the new contracts appear aimed at addressing troubles that have dogged the military health care program in the past, such as rocky contractor transitions and concerns about continuity of care for families that change locations much more often than their civilian counterparts. In addition to active-duty service members and their families, TRICARE serves retirees and their families, survivors, and certain former spouses. 

Health care transactions, particularly in the provider space, appear poised for another banner year, even as inflation, rising interest rates and a possible recession slow mergers & acquisitions (M&A) across the rest of the economy. Some providers are in financial crisis and seem sure to consolidate with each other or be taken over by private equity entities, while health insurers seem poised to spend pandemic-related windfalls.  

Generally, health insurers are in good financial health. The health insurance business is somewhat protected from inflation, as carriers can pass through rising prices to commercial plan sponsors. Meanwhile, risk in government books of business is ultimately borne by the public. In addition, many carriers have plenty of cash on hand, meaning they are also insulated from rising interest rates. In spring 2020, when COVID-19 hospitalizations hit their first nationwide peak and local governments shuttered many businesses and in some cases barred nonessential medical procedures, health care utilization cratered. Utilization did not approach normal levels until the end of that year, and so premium revenues far outstripped claims paid for most insurers.  

During the J.P. Morgan Healthcare Conference on Jan. 11, chief executives of Bright Health Group, Inc., Clover Health Investments Corp. and Oscar Health, Inc. discussed their companies’ aims to achieve profitability this year or next year. Thus far, however, the companies have not had a profitable quarter since they went public in 2021.  

For the first three quarters of 2022, the companies collectively had a net loss of more than $1.3 billion: Bright Health lost $691.3 million, Clover Health lost $254.8 million and Oscar Health lost $383 million. 

The Consolidated Appropriations Act, 2023 (2023 CAA) — the latest edition of the annual bill that funds the federal government — includes notable new policies that will touch on telehealth, behavioral health and Medicaid enrollment, among other areas. According to policy experts, because of the law, health plans have a great deal of new compliance requirements to manage in plan year 2023 and beyond. 

Congress discussed notable reforms to telehealth and mental health care over the course of 2022, and the 2023 CAA includes permanent changes to the latter — and temporary extensions of pandemic-era policies for the former. Meanwhile, the law sets out requirements for states and managed care organizations disenrolling Medicaid members as part of the return of Medicaid eligibility redeterminations.