Health Plan Weekly

Executives at CVS Health Corp. revealed on Feb. 16 that its Aetna insurance division plans to return to the Affordable Care Act exchanges starting in 2022, a move that health care policy experts say underscores the increasing attractiveness of the individual insurance market for carriers. They also indicate that the trend is expected to continue, barring some major — and unlikely — policy shift.

“After careful consideration, we have decided to reenter the individual public exchange market as of January 1, 2022,” newly minted CEO Karen Lynch said in her prepared remarks during CVS’s earnings call to discuss fourth-quarter and full-year 2020 financial results (see story, p. 3). “As the ACA has evolved, there is evidence of market stabilization and remedies to earlier issues,” Lynch added. “It is now time for us to participate in these markets. We will show that we can bring great value to those who seek coverage.”

✦ Humana Inc. announced a deal with IBM Corp. that will offer the insurer’s commercial group members an online chat virtual assistant based on IBM’s Watson Health conversational artificial intelligence software. The service will be available to all of Humana’s 1.3 million employer group medical members and 1.8 million of Humana’s employer group dental members. A press release noted that “consumers who do not understand how their health plan works or how to estimate out-of-pocket costs are more likely to delay or avoid essential care,” and positioned the agreement as a solution to that problem. Read more at http://huma.na/3qcVnn3.

✦ The American Hospital Association (AHA) sent a letter to CMS calling on the agency to investigate UnitedHealth Group’s diagnostic testing and specialty pharmacy benefit designs. The letter accused UnitedHealth’s recently announced “Designated Diagnostic Provider” program of being an attempt to “eliminate coverage for diagnostic tests at most freestanding and hospital labs while continuing to portray these providers as ‘in-network’ to health plan enrollees.” It also criticized UnitedHealth’s policy requiring providers to use drugs purchased and handled by the health plan and its OptumRx specialty pharmacy subsidiary. The AHA suggests that the policy might prevent “appropriate storage and handling of those drugs.” Read the letter at https://bit.ly/375XGkq.

COVID-19 relief legislation under consideration by key committees in the House of Representatives includes provisions aimed at helping Americans afford health insurance, many of which could be beneficial to consumers and health insurance organizations alike.

A proposal from the House Ways and Means committee would alter Affordable Care Act subsidies, effective only in 2021 and 2022, to ensure that no marketplace enrollee pays more than 8.5% of their income on premiums. That would mean that people earning above 400% of the federal poverty level (FPL) would be eligible for ACA subsidies for the first time. People with income below 150% of the FPL also would see the premiums for a benchmark ACA plan (the second-lowest cost silver-tier plan) fully subsidized.

Centene Corp. said it would eliminate 4,500 jobs, including 3,000 current employees and another 1,500 open positions, as it focuses on “innovation, growth and agility” after posting a $12 million fourth-quarter loss. However, its overall fourth-quarter and full-year 2020 financial results largely met analysts’ expectations, and company executives pledged strong growth in both their Medicaid and Medicare business lines in 2021.

The insurer’s medical loss ratio (MLR) for the fourth quarter came in worse than expected at 88.4% versus the 88% that analysts had anticipated, driven by higher costs for care of members with COVID-19, particularly within the individual health insurance exchanges. However, “the higher cost is not necessarily surprising given the COVID spike at year-end and commentary from peers,” wrote Citi analyst Ralph Giacobbe in a Feb. 9 investor note.