Health Plan Weekly

On Jan. 30, CMS released its long-awaited “Dear State Medicaid Director” letter containing detailed guidance that paves the way for states to receive capped federal Medicaid funding in exchange for more flexibilities. While such a waiver program is a long way from implementation in any state, that didn’t prevent insurers from reacting and analysts from speculating about how it would affect the managed care industry.

CMS’s 56-page letter outlines what it calls the “Healthy Adult Opportunity (HAO) initiative,” which would allow states to apply for Section 1115 waivers that cap spending on their Medicaid expansion populations. States would assume financial risk for any costs exceeding an “annual aggregate or per capita cap.” If states opt for an aggregate spending cap — also known as a block grant — and are able to spend less than the cap, they may be eligible to use a portion of that savings to reinvest in their Medicaid programs.

Anthem, Inc. continued to struggle with a higher-than-anticipated medical loss ratio (MLR) during the last quarter of 2019, and its earnings per share (EPS) guidance for 2020 fell short of what equities analysts were anticipating as the insurer reported fourth quarter and full-year 2019 results.

“Overall, the fourth quarter medical loss ratio was 89%, representing an increase of 220 basis points over the prior year, which, as expected was primarily driven by the one-year waiver of the health insurer fee,” Anthem Chief Financial Officer John Gallina said Jan. 29 during the company’s earnings conference call.

On Jan. 31, CMS released the 2021 Notice of Benefit and Payment Parameters (NBPP), which is the annual omnibus regulation that outlines the rules of the game for Affordable Care Act (ACA) exchange plans. But that was only after a trade group for safety-net health plans sent a strongly worded letter warning the Trump administration that the clock is ticking for issuers to finalize their 2021 premiums and benefit designs.

In its Jan. 27 letter, the Association for Community Affiliated Plans (ACAP) complained to CMS that the proposed 2021 NBPP “appears to be stalled at the Office of Management and Budget.” (The OMB completed its review of the regulation on Jan. 29.) Insurers need to submit qualified health plan (QHP) applications starting in early May, ACAP pointed out. “Building in a minimum 30-day comment period in addition to 30 days for the Department to review, revise, and release the final [rule] would allow just one month for issuers to operationalize and implement necessary updates,” the group wrote. “This timeframe will not allow issuers sufficient time to prepare products and operations for Benefit Year 2021.”

Despite Colorado’s robust insurance market, relative newcomer Friday Health Plans has managed to gain traction in its first few years. The company recently inked a $50 million funding agreement that may help it expand into new territories and provide the necessary tools to increase enrollment.

Launched by Sal Gentile, CEO, and David Pinkert, president, both health care industry veterans, Friday Health got its start as the two realized that the market was changing with individuals making more decisions, Gentile tells AIS Health. “The inspiration came from watching the development of the market, believing what ultimately would become a consumer-based market…and that plans, operations and tools were going to be necessary to be focused on the health care consumer.”

An earlier version of this article incorrectly stated that Jeff Myers is the former CEO of WellCare Health Plans, Inc. Myers was never WellCare’s CEO, but worked closely with WellCare’s leaders when Myers was CEO of Medicaid Health Plans of America (MHPA). WellCare is a member of MHPA. This version has been corrected.

On Jan. 21, Paula Tregre, Louisiana’s head of procurement, canceled the state’s newest Medicaid contract awards — but not for the reasons you might think. Meanwhile, Kentucky is working through its own bidding controversy after the state’s new governor called off Medicaid pacts awarded in December.