Health Plan Weekly

An earlier version of this article incorrectly stated that all Blue Cross Blue Shield affiliates joined a partnership with Civica Rx. As of Feb. 17, 18 Blues plans had joined the agreement. This version has been corrected.

The high price of prescription drugs has frustrated payers for years. Recently, that frustration has led some insurers to enter the drug production business — and states could follow their lead.

✦ On Jan. 27, the Supreme Court lifted an injunction blocking implementation of a Dept. of Homeland Security rule that makes obtaining a green card or entering the United States more difficult for legal immigrants who would otherwise qualify for federal benefits, including Medicare and Medicaid. A September 2019 Kaiser Family Foundation (KFF) report on the then-pending rule predicted that, if implemented, it could cause 2 million to 4.7 million people to disenroll from programs like CHIP and Medicaid “due to fear and confusion about the changes.” According to the report, “decreased participation in Medicaid would increase the uninsured rate among immigrant families, reducing access to care and contributing to worse health outcomes.” Read the KFF report at https://bit.ly/36yqsa9 and view the ruling at https://cnn.it/316FtPz.

✦ Covered California, the state’s individual marketplace, reported that 2020’s open enrollment period, which ended Jan. 31, has already yielded more new enrollees than 2019. As of Jan. 23, around 318,000 people new to the market had signed up for plans, beating last year’s total for the entire open enrollment period. California has stepped up efforts to advertise the individual marketplace and created a state individual mandate after Congress zeroed out the federal penalty for going without health insurance. Read more at https://bit.ly/2U5d0YK.

The Affordable Care Act (ACA) has significantly reduced racial disparities in access to health care since 2014, according to a recent analysis by The Commonwealth Fund. The gap between uninsured rates for black adults and white adults declined 4.1 percentage points, while the gap between Hispanic and white adults dropped 9.4 points. All three racial groups saw lower uninsured rates and larger coverage improvements in Medicaid expansion states between 2013 and 2018. The report also compared the uninsured rate changes in Louisiana, which expanded Medicaid in 2016, and in Georgia, which did not expand the program. Both white and black adults with incomes under 200% of the federal poverty level (FPL) saw coverage improvements from 2013 to 2015 in both states. Yet while Louisiana’s Medicaid expansion led to lower uninsured rates, Georgia’s rates remained flat after 2016.

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.