Health Plan Weekly
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Elevance Reports Fourth-Quarter Earnings That Are ‘Better Than Feared’
Elevance Health, Inc.’s fourth-quarter 2024 earnings report was better than many analysts expected after its third-quarter report included a full-year 2024 earnings outlook cut that sent the insurer’s stock tumbling 12%.
Elevance reported adjusted diluted earnings per share (EPS) of $3.84 for the fourth quarter, beating the Wall Street consensus estimate of $3.77. The insurer also posted a medical loss ratio (MLR) of 92.4%, narrowly beating the consensus of 92.6%. Fourth-quarter operating revenue was $45 billion, a 6% year-over-year increase. Total 2024 operating revenue was $175.2 billion, up 3% from 2023. This increase was largely driven by higher premium yields in the insurer’s Health Benefits segment, which includes individual plans, employer group plans, Medicare and Medicaid.
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In Pulling Back Biden-Era Exec Order, Trump Signals His Intentions for ACA
In addition to the flurry of executive orders that he issued soon after taking office, President Donald Trump rescinded an executive order issued by Joe Biden’s administration that underpinned later rulemaking to bolster the Affordable Care Act exchanges.
The move, on its own, doesn’t actually “have any practical consequence,” as one health policy expert puts it. But experts also suggest that it may signal how Trump’s second administration plans to approach a marketplace that has grown considerably since the president, during his first term, backed Congress’ attempts to repeal the ACA.
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Study Questions Payers’ Bargaining Chops Amid Big Variations in Primary Care Costs
Commercial insurers pay significantly more for routine office visits conducted by primary care providers (PCPs) employed by hospitals or private equity firms than what they pay to PCPs working for independent practices, according to an analysis published on Jan. 17 in JAMA Health Forum. Yashaswini Singh, Ph.D., the study’s lead author, says the prices were similar regardless of the insurer, indicating that even major payers are “not exerting downward bargaining pressure in these price negotiations.”
Singh adds that one “plausible explanation” for the high prices paid to PCPs at hospital- or PE-owned facilities is that those provider groups have market power because there are fewer competitors in their geographic areas. She suggests that another potential reason for the discrepancy is that “insurers can just pass on any price increases that they themselves experience to consumers” via higher out-of-pocket expenses. As such, she says “there may be less of an incentive to negotiate favorable rates,” although she points out the authors did not “directly examine either of those explanations for price differentials in this study.”
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MCO Stock Performance, December 2024
Here’s how major health insurers’ stock performed in December 2024. UnitedHealth Group had the highest closing stock price among major commercial insurers as of December 31, 2024, at $505.86. Humana Inc. had the highest closing stock price among major Medicare insurers at $253.71.
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News Briefs: UnitedHealthcare Gets a New CEO
UnitedHealthcare on Jan. 23 promoted Tim Noel to CEO, replacing Brian Thompson, who was shot and killed last month in front of a New York City hotel before the company’s Investor Day. Noel has worked at UnitedHealthcare since 2007, most recently as head of the insurer’s Medicare and retirement business. Thompson had been UnitedHealthcare’s CEO since 2021 and began working at the company in 2004. Luigi Mangione, 26, was indicted Dec. 17 on charges of murder as an act of terrorism and reportedly targeted Thompson because of Mangione’s disdain for the health insurance industry.
Abe Sutton, a former policy aide in the first Trump administration, is the likely pick to lead the Center for Medicare and Medicaid Innovation, STAT reported. Sutton currently works at health care investment firm Rubicon Partners. While in the first Trump administration, Sutton helped develop a kidney care initiative and worked on Affordable Care Act marketplace and drug policy initiatives. He also served as an adviser to the secretary of HHS.

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