Health Plan Weekly

While Cigna Corp. credited its Evernorth health services division as the primary driving force behind its strong first-quarter 2021 earnings, the company’s management and equities analysts alike seemed satisfied by the performance of Cigna’s health insurance business. And Cigna’s executives expressed optimism about the firm’s growth in certain commercial markets.

Cigna reported adjusted income from operations of $987 million and adjusted revenues of $10.4 billion for its U.S. Medical segment, and its first-quarter earnings for that segment were “slightly ahead of our expectations,” said Chief Financial Officer Brian Evanko during the company’s May 7 conference call to discuss financial results. Those results were driven in part by investment income but “partially offset by a non-recurring litigation settlement,” Jefferies analyst David Windley advised investors in a May 8 research note.

With a nationwide public option now looking unlikely under President Joe Biden, an increasing number of states are trying to implement their own government-sponsored alternative to commercial insurance in a bid to lower rising costs.

Colorado almost passed a public option, and Connecticut’s leaders are taking a hard look at creating their own. Meanwhile, a committee in Nevada’s legislature is debating the merits of implementing a public insurance option that sets a target of reducing average premium costs by 15% within five years and would be available starting in 2026 (HPW 5/7/21, p 7). Although payers and providers have successfully headed off Colorado’s public option proposal, and may do so elsewhere, there is increasing pressure at the state level across the country to act on health care costs.

With many companies currently hammering out what their employee benefits will look like in 2022, some health insurers are hoping to woo clients by rolling out products that promise to make navigating the health care system a simpler, smoother and more personalized process.

For example, Blue Cross Blue Shield of Michigan this March rolled out a multi­tiered portfolio of digitally enabled care management solutions called Blue Cross Coordinated Care. The offering comes in three “levels of support” that give employers a range of options to aid their members: Core, Navigator and Advocate.

✦ Nearly 940,000 people have signed up for health insurance plans through HealthCare.gov during the pandemic-related special enrollment period as of May 6, according to HHS. Also, nearly 2 million people who are already enrolled in individual market plans “have returned to the Marketplace and reduced their monthly premiums by over 40 percent, from $100 to $57, on average after premium tax credits.” HHS’s press release also noted that thanks to the premium tax credit expansion enacted in the American Rescue Plan, “the average monthly premium fell over 25 percent, from $117 for those enrolling from February 15 through March 31 to $86 for those enrolling in April.” Read more at https://bit.ly/3vLIMd1.

✦ For the first time, a majority of physicians do not work in private practice, according to a survey from the American Medical Association (AMA). The AMA, the largest professional association for physicians in the U.S., has tracked the number of physicians working in physician-owned medical practices since 2012. The 2020 version of the survey found that 49.1% of physicians work in physician-owned practices, down from 54% in 2018. “There are several contributing factors to the ongoing shifts in practice size and ownership that include mergers and acquisitions, practice closures, physician job changes, and the different practice settings chosen by younger physicians compared to those of retiring physicians. To what extent the COVID-19 pandemic was a contributing factor in the larger than usual changes between 2018 and 2020 is not clear,” said AMA President Susan R. Bailey, M.D. Read more at https://bit.ly/3h416dj.

Last year payers were profitable across multiple business lines, according to a May 3 report from the Kaiser Family Foundation (KFF). The report, which was based on data submitted to the National Association of Insurance Commissioners and compiled by Mark Farrah Associates, examines medical loss ratios (MLRs) and gross margins in the Medicare Advantage, Medicaid managed care, individual and fully insured group (employer) health insurance markets (see infographic, p. 8).

The report found that “health insurers in most markets became more profitable during the pandemic,” with the caveat that “we can’t measure profits directly without administrative cost data.” In particular, the report found that MLRs were lower in 2020 for Medicaid managed care organizations (MCOs) than they were in 2019 and 2018. Also, the brief cited an earlier KFF report that anticipated individual and group market commercial insurers will pay out at least $2.1 billion in MLR rebates for the years 2018 to 2020.