Health Plan Weekly

by Jinghong Chen

Total U.S. health care spending increased 4.6% to reach $3.8 trillion in 2019, according to CMS’s Office of the Actuary. Medicare spending experienced a higher growth rate in 2019 than in 2018, increasing by 6.7% compared with 6.3%. Meanwhile, private health insurance spending growth slowed from 5.6% in 2018 to 3.7% in 2019. The relatively stable rise in overall health care expenditures reflected faster growth in spending for hospital care, physician and clinical services, and retail prescription drugs, which was offset by a decline in the net cost of health insurance due to a suspension of the health insurance tax in 2019.

An arbitration system to resolve payment disputes between insurers and out-of-network providers over surprise medical bills in New Jersey has resulted in payments that are much higher than prevailing in-network rates for the same services, researchers found.

The study, published in the January issue of Health Affairs, found that New Jersey’s final-offer arbitration system “appears likely to increase health care costs relative to other surprise billing solutions and perversely incentivizes providers to inflate their charges over time,” the authors wrote.

Editor’s Note: President Donald Trump signed the Competitive Health Insurance Reform Act into law on Jan. 13.

In December, Congress repealed some federal antitrust exemptions for insurers, over the objection of some payer groups and state insurance regulators. However, experts say that the move will have minimal practical impact on the industry’s operations, and that further large-scale consolidation of payers is unlikely.

Although 2021 has just begun, major health insurers appear to be wasting no time when it comes to spending the influx of cash that they’ve collected as a result of reimbursing lower-than-normal medical claims during the COVID-19 pandemic.

On Jan. 4, Centene Corp. revealed that it struck a deal to purchase Magellan Health, Inc. for $2.2 billion, a transaction that promises to augment the insurer’s existing behavioral health, specialty health care and pharmacy management assets. Just two days later, UnitedHealth Group said it plans to purchase the technology company Change Healthcare for approximately $13 billion, a deal that adds “key technologies, connections and advanced clinical decision, administrative and financial support capabilities” to UnitedHealth’s analytics and advisory arm, OptumInsight.

by Jinghong Chen

Over 8.2 million people selected or were automatically reenrolled in health plans for 2021 on HealthCare.gov as of the Dec. 15 deadline, which was just shy of the 8.3 million sign-ups for the 2020 plan year, according to CMS. However, year-over-year comparisons are imperfect because Pennsylvania and New Jersey transitioned to their own state-based exchanges for the 2021 plan year, and their sign-ups accounted for 7% of all plan selections for 2020. Still, 25 of the 36 states using HealthCare.gov saw an enrollment increase for 2021 compared with 2020.