Health Plan Weekly

As the COVID-19 crisis continues to ramp up in the United States, projections about how it will affect various business sectors — including managed care — are evolving rapidly. But one concept that industry analysts seem to agree on is that health insurers with diversified business models may be better equipped to weather the storm.

For Peter Manoogian, principal at the health care consultancy ZS Associates, a main reason for the value of diversification comes from simple math. During the last financial crisis in the mid-2000s, about 5 million people shifted out of the employer-sponsored plan market when they lost their jobs, Manoogian tells AIS Health.

✦ America’s Health Insurance Plans (AHIP) and the Blue Cross Blue Shield Association (BCBSA) sent a letter to House and Senate leaders on March 19 outlining various legislative proposals to “protect Americans’ health care and coverage.” The trade groups want: a nationwide special enrollment period for the individual market; a 90% subsidy for COBRA or other insurance coverage for those who lose jobs; some mechanism to help companies continue to provide health insurance to their employees (such as direct subsidies or payroll tax relief); and a “backstop contingency program” that would be triggered if insurers’ costs are significantly higher than expected, in order to prevent a spike in premiums. Regarding the backstop program, AHIP and BCBSA say it should “cover a portion of related costs for 2020 and 2021 and apply to the individual, employer, Medicare and Medicaid markets.” Read the letter to congressional leaders at https://bit.ly/3becGwm.

✦ The number of health insurers taking steps to address the COVID-19 pandemic (HPW 3/16/20, p. 1) has ballooned in the wake of President Donald Trump declaring a national emergency. Bright Health is among the insurers amending their initial policies, as the Minneapolis-based company will now cover the COVID-19 test and associated office visit as a no-cost preventive care service regardless of network, authorize early medication refills, provide non-emergency transportation to all members and cover all telemedicine visits in connection with COVID-19 testing and diagnosis at no cost to members. Oscar Health, meanwhile, on March 13 unveiled what it dubbed “the first testing center locator for COVID-19 in the U.S.” View the latest list of insurer actions at https://bit.ly/2xdKGde and Oscar’s press release at http://on.hioscar.com/3a2M6G8.

Consolidation in commercial health insurance markets is not slowing down, according to the 2019 edition of an annual report from the American Medical Association, which found that the share of markets that are highly concentrated increased from 71% to 75% between 2014 and 2018. The report concludes that such market consolidation is harming consumers and providers of care. Another recent study, this one concerning the effect of provider consolidation on care quality, found that newly acquired hospitals did not see any improvement in readmission or mortality rates, but they did see slightly worse performance on patient-experience measures.

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.