Health Plan Weekly

As CVS Health Corp. looks to revamp its struggling Aetna health insurance business, the company plans to significantly reduce its Affordable Care Act exchange footprint and raise premiums. Speaking at the Wolfe Research Healthcare Conference on Nov. 19, CVS Chief Financial Officer Thomas Cowhey acknowledged that Aetna increased its premiums for exchange plans next year by “double-digit” percentages because it is losing $750 million to $800 million in that business due to mispricing this year. The company is also exiting unprofitable markets.  

While Aetna’s financial results do not break out how many people are enrolled in exchange plans, CVS CEO David Joyner said during the firm’s third-quarter earnings call on Nov. 6 that exchange membership increased significantly this year. But he also said the segment’s “performance is unacceptable” because of “miscalculations during the 2023 bid processes.” As such, Aetna changed its pricing strategy for 2025 and expects its exchange membership will decrease by 20% to 25% next year, according to Cowhey. 

Now that President-elect Donald Trump has revealed his picks for two top health officials — Mehmet Oz, M.D., as CMS administrator and Robert F. Kennedy Jr. as HHS secretary — the multibillion-dollar industries regulated by those agencies are scrambling to wrap their heads around what policy changes could result from Oz and Kennedy’s wellness-focused, antiestablishment views.  

So far, the consensus appears to be that Medicare Advantage plans could face a much friendlier regulatory environment under Oz, who in the past has voiced support for a “Medicare Advantage for All” system. But Oz’s views on the Affordable Care Act and Medicaid are tougher to pin down, and Kennedy’s stance on the managed care industry is even fuzzier, since he is perhaps best known for his vaccine skepticism. 

Alternative payment models (APMs), including value-based and accountable care, are growing across all lines of business, according to a survey from the Health Care Payment Learning & Action Network (HCP-LAN). Adoption of APMs increased from 41.3% in 2022 to 45.2% in 2023. Experts tell AIS Health, a division of MMIT, that while the results are encouraging, more work is needed to encourage adoption of value-based care arrangements, particularly in the commercial sector. 

The annual survey, conducted by HCP-LAN in partnership with AHIP and the Blue Cross Blue Shield Association, gathered data from 73 health plans, four fee-for-service Medicaid states, and traditional Medicare. In 2023, 21.6% of commercial payments flowed through APMs with downside risk, in which providers are financially responsible for failing to meet quality and cost goals, compared to 16.5% in 2022. Medicare Advantage led the way with 43% of payments passing through downside-risk APMs in 2023 vs. 38.9% the previous year. Traditional Medicare had 33.7% of payments run through APMs in 2023 vs. 30.2% in 2022. And 21.1% of Medicaid payments flowed through APMs in 2023 vs. 18.7% in 2022. 

Nearly one-quarter of adults in the U.S. are enrolled in health plans that are unaffordable and leave them in a potentially precarious financial position, according to a survey released on Nov. 21 from the Commonwealth Fund. Joseph Betancourt, M.D., the nonprofit foundation’s president, noted the results reveal “a critical weakness in the U.S. health insurance system.” And the report’s authors suggested policymakers could address the issue by expanding Medicaid eligibility in all states and permanently extending enhanced premium tax credits for Affordable Care Act exchange coverage. 

The survey was conducted between March and June of this year via telephone and online interviews in English and Spanish with a nationally representative sample of 8,201 adults who were at least 19 years old. All told, 56% of the respondents had been insured all year and were not deemed to be underinsured, 12% were insured at the time of the study but had been uninsured at some point in the previous 12 months and 9% were uninsured.