Health Plan Weekly

The COVID-19 pandemic has caused visits to primary care providers (PCPs) to plummet, putting significant financial strain on those businesses. That crisis has been especially harmful to independent practices, and insurers have begun to step in to assist struggling practices in their networks.

In recent years, payers have also renewed their focus on investing in high-quality primary care, recognizing the central role primary care plays in population health, care coordination and preventive medicine.

On June 30, the Trump administration released the first major update to regulators’ guidance on vertical mergers and acquisitions since 1984. The document from the Federal Trade Commission and Dept. of Justice (DOJ) has already drawn controversy, as two FTC officials issued dissenting statements arguing the guidelines aren’t critical enough of deals that consolidate multiple parts of a supply chain.

However, health care and legal experts aren’t convinced that the new guidelines will provide much more assistance to firms hoping to execute vertical transactions akin to insurer Cigna Corp. buying PBM Express Scripts, pharmacy giant CVS Health Corp. buying insurer Aetna, or UnitedHealth Group — which already owns an insurer and a PBM — purchasing a bevy of care-delivery assets.

Insurers are taking steps to help providers financially as the COVID-19 pandemic progresses, in part to help stave off more provider consolidation and demands for higher reimbursement, a recent survey from Robert Wood Johnson Foundation and the Urban Institute showed.

However, insurers haven’t seen the need for changes to benefit design in response to the crisis, and most have not yet seen a significant drop in coverage among employer clients, particularly those offering large group coverage, the survey found. In addition, insurers’ experience with COVID-19-related costs so far leads them to believe that the financial impact on 2021 costs and premiums will be minimal.

✦ The average COBRA enrollee spends significantly more on health care services than active workers or dependents with employer-sponsored coverage, according to a new study from the Employee Benefit Research Institute (EBRI). The study, released July 9, found that active, full-time employees with individual coverage in 2018 used an average $6,724 worth of health care services, while COBRA beneficiaries used an average of $18,752. COBRA enrollees are also older than their employed counterparts, on average, and more likely to have certain health conditions such as COPD, diabetes, cancer or mental health conditions. EBRI argued that subsidizing COBRA — as some policymakers have supported in light of the current economic downturn — can help reduce adverse selection against COBRA plans by making that coverage option more attractive for healthier people. Read more at https://bit.ly/322Pz6G.

✦ Five prominent Democratic lawmakers wrote to top Trump administration officials to “express serious concerns” about guidance they issued June 23 stating that health insurers are required to cover only “medically necessary” SARS-CoV-2 diagnostic or antibody tests (HPW 6/29/20, p. 1). Based on that guidance, insurers would not have to pay for “return to work” screening or for public health surveillance testing. “With COVID-19 cases skyrocketing and our testing capacity nowhere near where it needs to be, it is unacceptable that this Administration’s priority seems to be giving insurance companies loopholes instead of getting people the free testing they need,” wrote Frank Pallone Jr. (D-N.Y.), Bobby Scott (D-Va.), Richard Neal (D-Mass.), Patty Murray (D-Wash.) and Ron Wyden (D-Ore.), in a July 7 letter to HHS, the Dept. of Labor and the Dept. of the Treasury. View the letter at https://bit.ly/3gMjQKV.

✦ Employer health care spending could grow anywhere from 4% to 10% in 2021 as costs rebound from a dip in utilization tied to the COVID-19 pandemic, according to a new report from PwC’s Health Research Institute. The two main factors that PwC expects to inflate spending in 2021 are increased mental health services utilization and new and previously approved specialty drugs. Two major potential offsetting factors include the rapid adoption of telehealth and employers increasing their use of narrow networks. Read more at https://pwc.to/2ZCWTTI.

✦ The House of Representatives on June 25 passed a bill that aims to strengthen the Affordable Care Act (ACA), incentivize holdout states to expand Medicaid and lower prescription drug prices. The Patient Protection and Affordable Care Enhancement Act (HR 1425) advanced on a 230-180 vote, though it has little chance of passing in the Republican-controlled Senate. Among other provisions, the bill would expand ACA subsidies, help states develop their own insurance marketplaces and enact measures included in a drug-pricing bill previously passed by the House, HR 3. Read about the bill at https://bit.ly/2ZAze64.