Health Plan Weekly

Nearly 5.5 million people have selected health plans since the Affordable Care Act open enrollment period began on Nov. 1, CMS said in its latest marketplace enrollment update. That total captures signups on HealthCare.gov through Dec. 3 and through Nov. 26 for the state-based marketplaces, and it represents an 18% increase compared to the same time period last year. So far 22% of total plan selections have been from individuals who are new to the marketplaces, while 78% are returning customers, CMS said. The open enrollment period lasts through Jan. 15 for HealthCare.gov states and most state-based marketplaces.  

Blue Shield of California — which lost its bid to continue to serve California’s Medicaid managed care program — plans to lay off 373 employees by Jan. 25, Modern Healthcare reported. The decision from California’s Dept. of Health Care Services came in August after the state held its first competitive bidding process for Medi-Cal contracts. Blue Shield was not chosen — prompting the insurer to later sue the state — while Elevance Health’s Anthem Blue Cross Partnership Plan, Centene Corp.’s Health Net and Molina Health Care were selected to participate in varying service areas across 21 counties. The layoffs represent a small portion of Blue Shield’s total workforce of 7,800, Modern Healthcare noted, and the cuts are mostly concentrated at the insurer’s Sacramento-area offices. 

In AIS Health’s annual roundup of health insurer executive compensation data, four newly public startup insurers stand out because their CEOs’ total compensation in 2021 easily outstrips that of chief executives at major firms like UnitedHealth Group and Cigna Corp. However, experts tell AIS Health that the startups’ filings with federal regulators paint an unintentionally deceiving picture, as the CEOs of those not-yet-profitable firms are highly unlikely to collect hundreds of millions of dollars’ worth of stock awards listed there. 

“They’re never going to realize, in one year, that much compensation,” says Ari Gottlieb, a principal at A2 Strategy Group who has been closely tracking the performance of the four startup insurers that went public in 2021: Alignment Healthcare, Inc., Bright Health Group, Inc., Clover Health Investments Corp. and Oscar Health, Inc.  

During the first three quarters of this year, private equity companies were involved in 725 health care services deals in the U.S. and Canada, according to a PitchBook report released on Nov. 15. That is more than the number of transactions that occurred during each of the years between 2017 and 2020 and on par with 2021 when a record 1,004 such transactions took place for the full year.  

PitchBook, a data analytics and software company, defined the health care services segment as “traditional health care providers that offer medical treatment in hospitals, clinics, residential facilities and homes.” UnitedHealthcare sponsored the report, but the insurer did not have editorial control.  

The rise in consolidation among hospital systems operating in different geographic areas may be hampering the competitive strength of health insurers by limiting their negotiating muscle, a new study in Health Affairs says. 

The pricing effects of hospital consolidation is not new. Previous research, including a 2020 report from the Medicare Payment Advisory Commission (MedPAC), shows that merging hospital systems tend to lead to higher prices. 

However, the new study seeks to unravel the effects of a particular phenomenon — what happens after a merger or acquisition (M&A) among hospitals that operate in different markets and the impact on downstream factors, including contract negotiations with insurers.