Health Plan Weekly

An executive order being penned by the White House would fire thousands of workers at HHS, The Wall Street Journal reported on Feb. 6, citing people familiar with the matter. But the article acknowledged that such a move may not actually materialize: The White House denied that an HHS-related order is forthcoming, and WSJ’s sources said the terms of the order haven’t yet been finalized. The news of the potential HHS worker purge comes just one day after CMS acknowledged that it was working with Elon Musk’s Dept. of Government Efficiency (DOGE) to find “opportunities for more effective and efficient use of resources in line with meeting the goals of President Trump.” CMS said two senior agency veterans — one focused on policy and one focused on operations — are “leading the collaboration with DOGE, including ensuring appropriate access to CMS systems and technology.” With the blessing of President Donald Trump, Musk’s DOGE has gained an unprecedented amount of access to federal agencies and systems in recent weeks. A federal judge on Feb. 6 limited two DOGE representatives’ access to a Treasury Dept. payments system, stating that they could have “read-only” access in order to perform their duties. 

In recent months, multiple Blue Cross Blue Shield insurers have disclosed layoffs and buyouts aimed at trimming their expenses to help them weather what one health plan called “significant economic headwinds.”  

Industry experts say that the problems plaguing those Blues — elevated health care utilization and rising specialty drug costs — have been hitting health insurers of all types. But the Blues plans may be feeling the pain more acutely.  

“This is the most stress, I think, on the operating performance we’ve seen for health insurers for a while,” Brad Ellis, senior director of North American Insurance Ratings at Fitch Ratings, tells AIS Health, a division of MMIT.  

In its latest earnings release, The Cigna Group reported that it recorded a 27% year-over-year increase in revenue 2024. But the insurer’s stock took an 11% tumble on news that it missed its fourth-quarter adjusted earnings per share (EPS) and medical loss ratio (MLR) targets due to unexpected pressures faced by its stop-loss product.  

Overall, “Cigna reported very weak 4Q24 results,” Leerink Partners’ Whit Mayo concluded.  

Cigna’s fourth-quarter adjusted EPS was $6.64, which was 15% below the consensus estimate of $7.82. And the company’s MLR for the fourth quarter was 87.9%, which was considerably higher (worse) than the 84.4% consensus.  

Massachusetts Gov. Maura Healey (D) this month signed a bill into law that places more scrutiny on private equity investments in health care, joining other states and the federal government in examining PE’s role in the industry. The legislation primarily will impact health care providers, but attorneys and analysts tell AIS Health it could also affect payer transactions, particularly those involving insurers buying provider groups. They also say the law could indirectly impact insurers during reimbursement negotiations with hospitals and other physician groups, as research has found PE-backed providers often extract significantly higher rates than independent physician practices.   

Around 19% of claims from federally facilitated exchange plans were denied in 2023, according to data from a recent KFF report. Experts say the report illustrates a greater need for more data reporting and transparency from Affordable Care Act exchange plans, especially at the state level. 

The publicly available data in the report only applies to qualified health plans sold on HealthCare.gov, which are required to report certain transparency data, including claim denial rates. The report does not include state-run exchanges, Medicare or employer-sponsored plans — meaning it covers a “very small sliver” of the health insurance market, says Michelle Long, report co-author and senior policy manager for KFF’s Program on Patient and Consumer Protections.