Health Plan Weekly

  • News Briefs: Wyden Urges CMS to Penalize Unscrupulous Brokers

    Sen. Ron Wyden (D-Ore.), Chair of the Senate Finance Committee, wrote a letter on May 20 to CMS Administrator Chiquita Brooks-LaSure urging the agency to fine unscrupulous health insurance brokers. Wyden sent his letter following a CMS statement earlier this month that the agency had received about 40,000 complaints that people had been switched from one Affordable Care Act marketplace plan to another without their consent during the first three months of this year. CMS also said it had received about 50,000 complaints of unauthorized enrollments in plans in January, February and March. Wyden noted that the Affordable Care Act contains a provision that allows for penalties of up to $250,000 for “individuals who submit fraudulent information for a qualified health plan” in a “knowing and willful” manner. He wrote that “I am disappointed these penalties have not yet been used to hold bad actors accountable.” Wyden added in his letter that “the brokers, agencies and lead generators participating in fraudulent enrollment schemes should be held criminally responsible. While CMS does not have this authority today, I intend to introduce legislation shortly to give you this authority.”
  • As Hospitals’ Commercial Prices Keep Rising, Experts Float Solutions

    Hospital and outpatient service prices paid by commercial health plans grew in 2022, reaching a national average of 254% of Medicare’s compensation rate that year, according to RAND Corp. researchers. Experts tell AIS Health that they agree with the study’s conclusions that market consolidation is a key contributor to high prices and that higher costs are not correlated with higher quality. But they also say payers aren’t powerless to stem the tide of rising costs. 

    According to the May 13 RAND research, which is based primarily off an analysis of commercial claims data from all 50 states and all-payer claims database data in states where it is available, hospital and outpatient prices have grown substantially since earlier versions of the same research was published that studied the 2010s. (For a more detailed look at the RAND data, see this infographic.) In addition, the study concluded that there is a strong correlation between market consolidation and high prices. 

  • Medicare, Medicaid Segments May Be a ‘Mess,’ but Bounce-Back Expected

    Although insurers have bet big — and cashed in — on privatized Medicare and Medicaid plans, recently those business lines have shown some signs of distress.  

    For example, Humana Inc. and CVS Health Corp.’s Aetna this week put concrete numbers behind the Medicare Advantage membership losses that they expect to sustain next year due to significant headwinds facing the MA industry. And heightened medical loss ratios in managed Medicaid dinged the otherwise solid first-quarter 2024 financial results recently reported by Centene Corp. and Molina Healthcare, Inc. 

  • Little Engines That Could? Analysts See Lots to Like in Insurtechs’ 1Q

    Although first-quarter performance was decidedly mixed for the country’s largest publicly traded health insurers, three startup “insurtechs” — Oscar Health, Inc., Alignment Healthcare, Inc. and Clover Health Investments Corp. — largely impressed industry analysts with their financial results.  

    Oscar had a particularly outstanding showing, as the Affordable Care Act marketplace-focused insurer recorded its first quarterly profit since its founding in 2012 (the firm went public in 2021). Its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $219 million, which was approximately $100 million ahead of the Wall Street consensus estimate. The firm reported diluted earnings per share of 62 cents, compared to an 18-cent loss in the first quarter of 2023. 

  • Brokers Blame Tech Vulnerabilities for ACA Plan Switching, Signup Scams

    CMS recently said it received tens of thousands of complaints from people who were enrolled in Affordable Care Act marketplace plans without their consent by unscrupulous brokers during the first three months of this year. That led the National Association of Benefits and Insurance Professionals (NABIP), a broker trade group, to criticize CMS for its handling of the situation and claim that all brokers had been unfairly blamed by the agency.  

    But one industry expert says that there is “plenty of blame to go around” for the unauthorized enrollments, which can result in financial harm to plan members and insurers alike. 

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