Health Plan Weekly

✦ CMS said on Aug. 4 that in light of the COVID-19 public health emergency, it will allow insurers operating in the individual and small-group markets to offer one or more months of temporary premium reductions for customers this year. Insurers in those markets are generally prohibited from changing premiums midway through the year. Previously, CMS permitted HealthCare.gov issuers to extend premium payment deadlines and delay cancellation for non-payment of premiums, and it allowed them to prepay to enrollees all or part of the estimated medical loss ratio rebate for the 2019 MLR reporting year. Read more at https://go.cms.gov/2DrEMZF.

✦ Pending regulatory approvals, Oscar Insurance Corp. will offer health insurance in four new states during the upcoming individual market open enrollment period, for a total footprint of 19 states. The company also launched a new $0 Virtual Primary Care product, which offers free telehealth visits “with a dedicated team of Oscar primary care providers,” and free Tier 1 prescriptions, durable medical equipment, labs, diagnostic imaging orders and initial specialist referrals. The new plans also feature $0 “vitals monitoring kits” and in-home lab draws when ordered by an Oscar primary care provider. Read more at http://on.hioscar.com/2C5Hp2L.

In its initial release of requested rate increases from insurers, Covered California, the state’s Affordable Care Act (ACA) exchange, announced a state record-low average rate increase of 0.6% for the individual market. In an Aug. 4 conference call with reporters, Covered California Executive Director Peter Lee also touted expanding payer competition on the exchange and growing enrollment.

The year’s marginal rate increase follows a similarly low increase of 0.8% for 2020, and comes in spite of the state’s many worsening COVID-19 outbreaks. California officials have positioned expanding health coverage as a critical part of the state’s response to the pandemic.

Humana Inc.’s second quarter earnings exceeded investor expectations due to a drop in utilization, although the insurer expects spending on health care services to rebound somewhat as patients continue to return to medical facilities.

In its second quarter earnings report, Humana reported adjusted earnings per share (EPS) of $12.56. According to Jefferies analyst David Windley and Oppenheimer analyst Michael Wiederhorn, Wall Street anticipated an EPS of slightly over $10. Analysts anticipate a positive outlook for the rest of the year, but they hedged positive projections by noting the COVID-19 crisis could damage insurer earnings in unforeseen ways.

While Aetna is just one part of CVS Health Corp.’s massive health care enterprise, it was disproportionately responsible for the company’s strong financial performance during the second quarter of 2020, thanks to the effects of COVID-19.

CVS’s quarterly adjusted earnings per share of $2.64 easily beat the Wall Street consensus estimate of $1.91, and its adjusted EPS increased nearly 40% compared with the second quarter of 2019. The majority of that earnings growth was attributable to the firm’s health care benefits segment — housing its Aetna business unit — “which saw an unprecedented decline in utilization due to the pandemic,” Chief Financial Officer Eva Boratto said during the company’s Aug. 5 earnings call.