Health Plan Weekly

Centene Corp., which has come to dominate the Affordable Care Act exchange market by continuing to expand even when other carriers pulled back, is facing more competition now that the market has stabilized and insurer participation has increased. In recent notes to investors, Wall Street analysts shared diverging views about what that means for Centene’s 2021 earnings, but they — and other experts — generally agree that the insurer won’t be dethroned as the king of the exchanges anytime soon.

Citi analyst Ralph Giacobbe, in a Nov. 16 report, advised investors that he was placing a “negative catalyst watch” on Centene due to the new competitive pressures it’s facing. Centene, he observed, “was displaced as the lowest priced plan in a number of markets,” and although price is only one factor in an individual’s decision of which plan to buy, Centene “has been successful in part due to its lower cost offering historically.” As a result, the insurer “will have to rely on retention and new market entry to offset competitive pressures, which could prove challenging and may stunt growth relative to expectations,” Giacobbe wrote.

✦ During the first week of open enrollment for the Affordable Care Act exchanges (Nov. 1-7), 818,365 people selected plans on the federal platform, HealthCare.gov, according to CMS’s weekly enrollment snapshot released on Nov. 12. And in the second week — comprising Nov. 8-14 — 803,741 enrolled in plans. The number of HealthCare.gov signups during 2021 open enrollment won’t be directly comparable to last year’s, as Pennsylvania and New Jersey started using their own state-based exchanges for 2021 open enrollment, excluding them from the running tally reported by CMS. Open enrollment for the 36 states using the federal platform runs from Nov. 1 to Dec. 15. Visit https://go.cms.gov/3nznBqu and https://go.cms.gov/36StGaU.

✦ U.S. employers appear to be interested in exploring individual coverage health reimbursement arrangements (ICHRAs), in which companies reimburse workers who buy their own health coverage, according to Willis Towers Watson. The health benefits brokerage firm’s 2020 Health Care Delivery Survey found that 15% of employers are planning to offer or considering offering ICHRAs for at least some of their employees in 2022 or later. A 2019 rule issued by the IRS allowed employers to start offering ICHRAs this year, but relatively few opted to do so, “as the pandemic diverted much of their attention to other critical benefit matters,” said John Barkett, senior director of policy affairs, benefits delivery and administration at Willis Towers Watson. Read more at https://bit.ly/36Sxl8E.

✦ CVS Health Corp. promoted Daniel Finke to executive vice president of its Health Care Benefits (HCB) Segment effective February 2021, succeeding Karen Lynch, who will become president and CEO of CVS at the same time. HCB includes Aetna and, according to a press release announcing the promotion, covers 34 million lives. According to the release, Finke has worked for Aetna since 2014, most recently leading the payer’s Commercial Business and Markets division, and previously “spent more than a decade at Anthem in various national executive roles.” Read more at https://bit.ly/2Izcij7.

✦ A Connecticut primary care practice has sued Cigna Corp. in federal court, alleging that the insurer wrongfully denied over $4.6 million in COVID-19 testing costs for over 4,400 patients. While the figures involved are relatively small for a national carrier, the suit could have substantial implications for the managed care industry if successful. According to Bloomberg Law, “the lawsuit is an early instance of the Employee Retirement Income Security Act being used in coronavirus coverage litigation,” and it cites new COVID-19 relief laws including the Families First Coronavirus Response Act and the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Read the Bloomberg article at https://bit.ly/32FPCVo and the filing at https://bit.ly/38ExPBQ.

The Trump administration has finalized its long-awaited rewrite of an Obama-era Medicaid rule, delivering wins on network adequacy and rate adjustments to managed care organizations (MCOs) operating in state Medicaid programs.

The final rule, released Nov. 9, was four years in the making and is intended to reduce administrative and regulatory burdens on Medicaid/CHIP managed care agencies and plans while offering states additional flexibility, according to CMS.