Health Plan Weekly

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.

Testing for the novel coronavirus still has an important role to play in saving lives and ending the pandemic, but it will require significant investment and attention to become effective. As testing is scaled up by the Biden administration, in a notable pivot from the Trump administration’s hostility to testing, carriers and plan sponsors may have to foot the bill for higher volumes of a broader array of tests.

Through a Jan. 21 executive order, President Joe Biden launched the COVID-19 Pandemic Testing Board, which will coordinate “a Government-wide, unified approach” with the goals of “establishing a national COVID-19 testing and public health workforce strategy; working to expand the supply of tests; working to bring test manufacturing to the United States, where possible; working to enhance laboratory testing capacity; working to expand the public health workforce; supporting screening testing for schools and priority populations; and ensuring a clarity of messaging about the use of tests and insurance coverage.” The membership of the board does not appear to have been announced as of press time.

The tech-focused Medicare Advantage startup Clover Health — which should be riding high after its recent stock market debut — is instead being probed by the Securities and Exchange Commission and is facing a shareholder lawsuit amid allegations it misled investors by failing to publicly disclose that it was being investigated by the Dept. of Justice.

While the company has denied the allegations via a lengthy, public rebuttal, securities law experts tell AIS Health that Clover could face liability if it did actually conceal material information from investors — a fact that hasn’t yet been determined.

✦ UnitedHealth Group will make Optum CEO Andrew Witty its next CEO, succeeding retiring CEO David Wichmann, who has held the top job since 2017. Witty has run UnitedHealth’s PBM, hospital, finance and data analytics subsidiary since 2018, and previously served as CEO of pharmaceutical manufacturer GlaxoSmithKline plc from 2008 to 2017. During the COVID-19 pandemic, Witty “took an unpaid leave of absence from his company positions to serve as a Global Envoy for the World Health Organization’s COVID-19 efforts” and “served as an advisor to the UK Government Vaccine Taskforce,” according to a press release. Dirk McMahon will become the company’s new president and chief operating officer. Read more at http://bit.ly/3oPigeW.

✦ President Joe Biden on Feb. 2 signed an executive order on immigration that called for a review of the Trump administration’s so-called “public charge rule.” The rule allowed immigration officials to consider use of Medicaid coverage and other non-cash benefits in reviewing applications for legal residence. Although the regulation was tied up in litigation before its February 2020 implementation, research showed it still caused enough confusion and fear among immigrants to prevent them from enrolling in Medicaid. Estimates of the potential negative impact of the public charge rule on Medicaid enrollment range from about 1 million to more than 4 million, wrote Evercore ISI analyst Michael Newshel on Feb. 2. “The Biden administration has been expected to rescind the rule, which is positive for Medicaid MCOs and also hospitals.” Read the order at http://bit.ly/3pQagvw.