Health Plan Weekly

There are always uncertainties when it comes to projecting plan costs for the year ahead, but Medicare Advantage and Part D organizations in the most recent bid cycle faced a particularly unpredictable set of circumstances created by the COVID-19 pandemic.

“I think we will all look back on the 2021 bids as the year of COVID-19,” says Brad Piper, a principal and consulting actuary in Milliman’s Milwaukee office, who recently helped MA clients prepare bids that were due June 1. “That was a big challenge for the organizations that are in the Medicare Advantage program — [perhaps more so] than on the Part D side — and it impacted both sides of the coin: costs and revenue.”

Indiana on May 29 received CMS approval for a Section 1115 waiver demo that allows residents moving from Medicaid expansion to commercial plans to spend up to $1,000 of funds stored in quasi-HSA accounts on insurance premiums or cost-sharing expenses. State officials describe the plan as a way to help former Medicaid members whose income has grown stay insured. However, experts say that the program, which is related to Indiana’s push for Medicaid work requirements, isn’t likely to improve access to coverage for those eligible.

The program allows former members of the Medicaid expansion program, the Healthy Indiana Plan (HIP), who have joined an employer-backed or individual exchange commercial plan to spend up to $1,000 in Medicaid funds on expenses including premiums, copays, prescription drugs and other cost sharing for the 12 months after their transition from Medicaid.

Six states in the Northeast and Pacific Northwest have now released initial premium rate requests from individual and small-group health plans. And although both regions have been hit hard by the COVID-19 pandemic, only New York insurers asked for rate increases dramatically above industry expectations from the beginning of the year.

The nation’s worst outbreak took place in New York City and surrounding region, with New York City alone recording more than 380,000 recorded infections and 24,404 attributed deaths as of June 10. Because of that maelstrom, insurers operating in New York state requested a weighted average increase of 11.7% for individual market premiums and 11.4% for small-group premiums.

As the COVID-19 pandemic ramped up in the U.S. in early spring, actuaries and analysts raced to develop estimates of how the disease associated with this new coronavirus would impact health care costs. Now, with cases declining in some areas and rising in others — and crucially, much more data available — some of those estimates are changing.

One analysis that recently received an update is a Wakely Consulting Group report, which was prepared at the request of America’s Health Insurance Plans and originally released March 30. That report estimated that the direct impact of COVID-19 treatment costs — for commercial, Medicare Advantage and Medicaid managed care insurers — would be in the range of $56 billion to $556 billion for 2020 and 2021 combined. Now, Wakely is estimating a range of $30 billion to $547 billion for those two years, with the former figure representing a low infection rate of 10% and the latter representing a high infection rate of 60%.

✦ The Indiana Family and Social Services Administration earned CMS approval for a policy that will allow members of its Medicaid expansion program, the Healthy Indiana Plan, to spend up to $1,000 of HIP benefits on commercial insurance fees. All HIP beneficiaries have a $2,500 annual “POWER” account that can be used similarly to a health savings account. However, POWER accounts are not portable, and until the new policy, HIP members who moved from HIP to a commercial plan gave up the balance of their POWER account. Going forward, transitioning HIP members will be able to use the POWER funds to pay commercial insurance premiums, deductibles, copays and other forms of cost sharing for up to 12 months after leaving HIP. Read more at https://bit.ly/3gTuJLR.

✦ Kentucky Gov. Andy Beshear (D) reaffirmed the five health plans that were initially selected to run the state’s Medicaid program. The selections were initially made by previous Gov. Matt Bevin, a Republican, but Beshear nullified the original contract awards. A total of 1.4 million Medicaid and CHIP beneficiaries will be divided between CVS Health Corp.-owned Aetna, Humana Inc., Molina Healthcare, Inc., UnitedHealthcare and Centene Corp.’s WellCare Health Plans, Inc. Passport Health Plan, the second-largest MCO in the state and an incumbent contract-holder, was once again not chosen. Evolent Health, which bought a 70% stake in Passport when it was on the brink of insolvency, said it supports Passport’s plan to protest the decision. Read more at https://bit.ly/2ACCkxF.