Health Plan Weekly

In executive orders released July 24, the Trump administration renewed its push toward a signature campaign issue: lowering drug prices. However, experts say that the orders are a rehash of similar proposals by the administration that failed to gain backing from either political party in 2019, and they are skeptical of the idea that the orders will actually lower prices.

The three executive orders call for regulations allowing drugs to be imported from other countries, requiring Federally Qualified Health Centers (FQHCs) to make insulin and epinephrine available to low-income members of the public at the discounted prices set by the 340B Drug Pricing Program, and removing safe harbor protections under the Anti-Kickback Statue for prescription drug rebates in Medicare Part D.

Despite growing, bipartisan calls for more federal Medicaid funding to stem states’ budget shortfalls, such a provision is absent from Senate Republicans’ latest COVID-19 relief bill. And while that omission hints at the next big health care battle in Congress, experts tell AIS Health that another, quieter Medicaid funding conflict is bubbling up at the state level — over how much to pay managed care plans.

Already, there are troubling signs for Medicaid managed care organizations, which cover more than three-quarters of Medicaid beneficiaries. Nevada’s legislature recently passed a fiscal year (FY) 2021 budget — effective starting July 1, 2020 — that cuts Medicaid provider rates by 6%, a move expected to save the state $52.9 million. The cuts will have a small impact on the earnings of Nevada’s three managed care plans, which are owned by Anthem Inc., UnitedHealth Group and Centene Corp., Credit Suisse analyst A.J. Rice pointed out in a July 27 research note.

✦ As of March 15, 10.7 million people had effectuated coverage in the Affordable Care Act exchanges, according to new data released by CMS on July 23. Total effectuated enrollment — encompassing people who selected a plan, paid their first month’s premium, if applicable, and had coverage in February 2020 — increased by about 1% compared with total effectuated enrollment for February 2019. Visit https://go.cms.gov/39kximS to learn more.

✦ Enrollment for Nebraska’s Medicaid expansion program will begin Aug. 1, according to local news reports, with coverage slated to begin Oct. 1. Nebraska voters approved Medicaid expansion in November 2018, but the implementation was delayed amid the state’s ultimately abandoned attempt to get CMS approval for a Section 1115 waiver, Credit Suisse analyst A.J. Rice pointed out in a July 21 note. Anthem, Inc., Centene Corp. and UnitedHealth Group cover about 230,000 Medicaid lives combined in Nebraska, and the expansion of eligibility will add about 90,000 lives, Rice said, though he noted the additional lives will have a very small impact on those firms’ earnings. Email Rice at aj.rice@credit-suisse.com.

Risk adjustment transfers reached $10.8 billion in the Affordable Care Act program for the 2019 benefit year, with the individual market accounting for about $7.98 billion, according to CMS. Among the 561 issuers that participated in the program, a handful were slated to receive significant payments. Blue Shield of California was due to collect more than $1 billion, with $873.8 million related to its individual market plans. Florida Blue followed with an expected $773.9 million payout. Meanwhile, Kaiser Foundation Health Plan, Inc. in California will have to pay nearly $796.6 million into the risk adjustment program.

A Trump administration rule expanding the availability of short-term, limited duration (STLD) health insurance plans will continue after an appeals court panel ruled 2-1 against a suit brought by the Association for Community Affiliated Plans (ACAP). A July 17 statement by ACAP CEO Margaret Murray suggests the trade group for safety net health plans is likely to continue pursuing the case.

“We are disappointed in the court’s decision but remain firm in our belief that junk insurance plans violate both the Affordable Care Act and the Administrative Procedure Act,” Murray wrote in the statement. ACAP has the option of petitioning the D.C. Circuit Court of Appeals to hear the case en banc, which would bring every member of the circuit’s bench together to hear the suit again. Murray’s statement indicates ACAP is likely to pursue that option. “We’re confident the full D.C. Circuit will agree,” Murray added.