Health Plan Weekly

During their third-quarter 2020 earnings conference call, Centene Corp. executives made the case that despite all the challenges related to the pandemic and politics, there are plenty of reasons to believe the company is well-equipped to weather the storm.

“While there is continued uncertainty, including the intensity and duration of the pandemic and the outcome of next week’s election, we believe we have the scale and size to deliver results as the environment continues to evolve,” Chairman, President and CEO Michael Neidorff said in his opening remarks during the Oct. 27 call, per a transcript from The Motley Fool.

With open enrollment for the Affordable Care Act (ACA) exchanges set to begin on Nov. 1 in most states, the COVID-19 pandemic — as is the case with nearly everything in 2020 — is expected to play a role. Health insurers had to decide when setting 2021 premiums whether to factor in a “COVID load,” while rising unemployment driven by the pandemic has the potential to boost sign-ups after two years of flat enrollment totals. Meanwhile, new federal data suggests that the individual insurance market has not only stabilized but is becoming more attractive to consumers.

A report released by the Trump administration on Oct. 19, which analyzed rates in the 36 states that use HealthCare.gov, found that the average premium paid by a 27-year-old for the second-lowest-cost silver plan will decline 2% for 2021, and 22 more plan issuers will offer coverage (see infographic, p. 6). That will mark three straight years of both declining average benchmark plan premiums and increasing issuer participation, CMS noted.

Since the beginning of the COVID-19 pandemic, which saw health care utilization crater — and insurer margins grow as a result — payers have refunded billions of dollars to members and plan sponsors. Experts say that the premium rebate trend is primarily driven by the desire of payers to manage cash flow and future medical loss ratio (MLR) obligations, but is also likely an attempt by insurers to improve their public image as the prospect of major health care legislation looms after the election.

The Affordable Care Act (ACA) MLR rules require commercial insurers to spend at least 80% of their premium revenue from individual and small group plans and 85% of their large-group revenue on claims and quality improvement. The ACA requires any profits above those rates to be rebated to plan members. MLR rebate amounts are calculated on a rolling three-year average, meaning financial figures from 2017 to 2019 are the basis of 2020’s MLR calculations. Rebates accrued in a given plan year must be paid out by Sept. 30 of the following year.

✦ On Oct. 19, CMS released a report that found premiums for plans sold on HealthCare.gov have dropped for the third consecutive year, and insurer participation has increased. The average premium for 2021 benchmark silver plans dropped by 2% year over year, while benchmark plan premiums have dropped by 8% since 2018. In a press release, the agency said Iowa, Maine, New Hampshire and Wyoming will see “double-digit decreases in the average benchmark plan premiums for 27-year-olds.” The report also found that the number of HealthCare.gov enrollees with access to a single insurer has dropped from 29% in 2018 to 4% in 2021. However, premiums have grown substantially since the start of the Trump administration in 2017, with 27% net growth in benchmark premiums for 27-year-olds between that year and 2021. Read more at https://go.cms.gov/3jiOEUB.

✦ The Commonwealth Fund found in an Oct. 15 study that outpatient care visits per week have “fully rebounded” after dropping off earlier this year due to the COVID-19 pandemic. “In total, weekly visit counts now slightly exceed pre-pandemic levels,” the study found, though “there is considerable variation by patient age, geographic area, clinical specialty, and insurance coverage.” Outpatient care utilization dropped dramatically during the early days of the pandemic: according to the report, the lowest point in utilization was a 58% reduction in visits on March 29. Read more at https://bit.ly/3dNwjh2.

Blue Cross and Blue Shield of North Carolina is partnering with two vendors to offer free app-based smoking cessation and diabetes reversal programs to its individual and fully insured members. Around 500,000 members will be eligible to participate initially, the companies say.

The programs, run by Carrot Inc. and Virta Health, will be available beginning in November. They address two of North Carolina’s “most pressing health issues,” says Von Nguyen, M.D., vice president of clinical operations and innovations at the Blues insurer. Carrot will run the smoking cessation program and Virta will run the diabetes program.