Health Plan Weekly

Oscar Health Inc., the perennially buzzy startup health insurer, saw its shares slide almost 11% during its first day as a publicly traded company on March 3. But Oscar’s underwhelming debut doesn’t come as a surprise to some industry consultants, who observe that the firm’s technology- and customer-experience-driven business model may be a poor fit for an individual health insurance market where customers tend to flock to the lowest-premium plans.

And that scrutiny comes as another startup insurer — Medicare Advantage-focused Clover Health — released its first quarterly earnings results since it went public, all while trying to shake off the cloud of controversy stirred up by a critical short-seller report that caused its stock prices to plummet (HPW 2/12/21/ p. 1).

Health insurers have begun to consolidate their position in the telehealth market, as indicated by a recent move by Cigna Corp. to acquire MDLive Inc. Meanwhile, lawmakers are beginning to consider the future of telehealth regulation and payment, which could include a new Medicare reimbursement scheme and a new national licensing regime for practitioners.

Cigna’s Evernorth health services arm announced on Feb. 26 that it had reached an agreement with MDLive to acquire the virtual care provider, which offers video visits for medical care, dermatology, psychology and psychiatry, according to MDLive’s website. While the financial terms of the deal were not disclosed, private equity news outlet and business intelligence firm PitchBook said on March 1 that MDLive “was valued at $1 billion.” Cigna and MDLive have an existing relationship: MDLive has been available in-network as a primary care option to all members of Cigna’s commercial members since January 2020.

✦ Cigna Corp.’s Evernorth division has reached a deal to acquire the telehealth platform MDLIVE, the companies said on Feb. 26. Cigna is already an MDLIVE customer and investor, and noted in a press release that the telehealth firm “has a sizable and forward-thinking client base, a class-leading provider network, brand recognition among customers and consumers, and experience in medical and behavioral health.” In a note to investors about the deal, Evercore ISI analysts wrote that “although we don’t view MDLIVE as particularly differentiated vs. other telehealth providers, it gives [Cigna] a platform to better integrate telehealth medical and behavioral visits into its healthcare offering to help control costs and improve patient experience, and expands the service offerings Evernorth can cross-sell into other health plans.” The analysts also noted that previously MDLIVE was considering going public, and its latest funding round valued it above $1 billion. No financial terms were disclosed for the deal, which is subject to customary closing conditions and regulatory approvals, and is expected to be completed in the second quarter of 2021. Read more at https://prn.to/3qZ9eOr.

✦ Hawaii elected to renew its contract with Centene Corp.’s ‘Ohana Health Plan to provide behavioral health care services to Medicaid-eligible adults with severe and persistent mental illness under the state’s Community Care Services (CCS) program. The plan, which serves about 5,000 members ages 21 and older who have severe and/or persistent mental illness, has been the sole contractor for CCS since 2013. The contract extension will begin July 1 and continue for three years, and the state holds two one-year options to extend it. Read more at http://prn.to/3sxWpuR.

Last year, Medicare Advantage plans for the first time were able to extend a variety of non-primarily health-related items and services to their chronically ill beneficiaries, but insurer adoption of these benefits was relatively small. In 2021, the availability of such benefits has more than tripled, suggesting carriers are becoming more comfortable with a variety of new supplemental benefits and the idea of incorporating cost offsets into their bids.

At the same time, an examination of 2021 Plan Benefit Package (PBP) data illustrates the heavy influence of the COVID-19 pandemic on benefit design, as more insurers are offering grocery delivery, virtual companionship and other services aimed at supporting isolated seniors.