Health Plan Weekly

A new report prepared for the Leukemia and Lymphoma Society by actuarial firm Milliman Inc. concludes that short-term limited-duration (STLD) health plans expose enrollees to substantial financial risk, and that widespread enrollment in STLD plans by consumers would drive up premium costs. But some health policy experts tell AIS Health that, while STLD plans are undoubtedly a riskier proposition for consumers than more robust insurance, their impact on the broader marketplace is not clear.

In August 2018, the Trump administration issued a final rule that loosened the regulations governing STLD plans, allowing them to cover individuals for up to 364 days and be renewed up to 36 months. When the ACA was enacted, STLD plans were initially meant only to serve as stopgap coverage for consumers who lost coverage unexpectedly but didn’t qualify for a special enrollment period, so the Obama administration allowed the plans to last only three months.

Though many health insurers have removed cost barriers related to testing patients for the new coronavirus that’s sweeping the globe (HPW 3/16/20, p. 1), they largely haven’t pledged to waive out-of-pocket costs for severely sickened members who require hospitalization. A new analysis suggests that the cost of caring for those patients could be steep for members and health plans alike, but experts tell AIS Health it may be too early to say what that will actually mean for commercial insurance markets.

The analysis, from the Peterson Center on Healthcare and the Kaiser Family Foundation (KFF), examined claims from 18 million people enrolled in large-employer health plans in 2018 who were admitted to the hospital with pneumonia. While most people who contract the new coronavirus experience only mild symptoms including fever and cough, other individuals — usually those with other medical conditions — develop severe, potentially fatal symptoms such as pneumonia. The virus originated in China late last year, and the disease it causes, COVID-19, is now classified as a pandemic. As of March 20, there were at least 12,392 confirmed cases in the United States and 195 deaths.

UnitedHealthcare is testing a new product in southern California using a closed network that relies on the company’s own OptumCare medical group. The product, which the insurer first rolled out in mid-2019, boasts premiums that are significantly lower than other plans from United and from competing insurers. OptumCare has grown over the past decade to include nearly 50,000 employed or aligned physicians, and the company is expecting it to point the way forward for plans to “reinvent health care delivery,” Optum CEO Andrew Witty told investors late last year at UnitedHealth Group’s annual investor day (HPW 12/9/19, p. 4). The new insurance product, Harmony, is part of that effort. “This is a ‘back to the future’ development,” says Jon Kingsdale, senior strategy advisor at Wakely Consulting and associate professor of the practice at Boston University School of Public Health. “With Optum’s acquisition of groups and customers’ increasing sensitivity to costs, United...

The COVID-19 pandemic is shaping up to be a stress-test for the post-Affordable Care Act insurance market, which has not yet faced a recession. The crisis has already caused mass layoffs, especially in the restaurant and retail industries, and experts say the individual health insurance exchanges and Medicaid could see record enrollment in the coming months as a result.

In the cities that have been hardest-hit so far, like Seattle and Boston, dozens of restaurants and stores have laid off workers or closed as residents practice social distancing. A March 17 NPR/PBS NewsHour/Marist Poll found that “18% of employed Americans say they have been let go or have had their work hours reduced because of coronavirus.”

✦ On March 9, global insurance brokerage firm Aon PLC agreed to buy fellow broker Willis Towers Watson in a deal that values the new firm at roughly $80 billion, according to a joint press release. The release emphasized the technology-driven nature of the deal and claimed the transaction will generate $10 billion in shareholder value. Companies like Aon and Willis Towers Watson help employers choose health plans and PBMs for their workers. Both firms’ stocks, which have trended downward since February, rallied the day after the announcement, but declined severely in subsequent days as markets crashed in response to an onslaught of bad COVID-19 news. Read the release at https://bit.ly/2QccPYS.

✦ CMS on March 11 rolled out a voluntary model that would set out-of-pocket costs for insulin at a maximum $35 copayment per 30-day supply throughout the benefit year for beneficiaries in participating enhanced Part D plans. The goal is to ensure that beneficiaries in participating plans “will have predictable copays for a broad set of formulary insulins, including rapid-acting, short-acting, intermediate-acting, and long-acting insulins, marketed by participating manufacturers from the beginning of the plan year and through the coverage gap phase,” according to a press release. Visit https://go.cms.gov/39Kn1zx.