Health Plan Weekly
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Nonprofit Medicaid Plans Ask Feds to Step In to Fix ‘Inadequate’ Pay Rates
With the Medicaid unwinding process winding down, two health insurer trade groups are sounding the alarm about how the resulting changes in the Medicaid risk pool are putting financial stress on nonprofit and regional health plans. To address the situation, both the Alliance of Community Health Plans (ACHP) and Association for Community Affiliated Plans (ACAP) say they want the federal government to push states to raise the payment rates to private Medicaid plans.
“This is an issue that is impacting much of managed care across the country,” says Jennifer McGuigan Babcock, senior vice president for Medicaid policy at ACAP. “We have heard…anecdotally from our plans that should changes not be made for 2025, and potentially for 2026 rates, there will be significant problems.”
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Survey Findings, New State Law Shine Spotlight on IVF Coverage
Only around one-quarter of large employers offer in vitro fertilization (IVF) coverage to employees, according to a recent KFF survey. But a similar survey from the benefits consulting firm WTW revealed that 67% of respondents offer such coverage.
Despite these dueling outcomes, IVF coverage and other fertility benefits are emerging as a hot topic for employer benefits, experts say.
KFF’s 2024 Employer Health Benefits Survey revealed that 27% of respondents from companies with 200 or more employees (considered “large employers”) offer IVF coverage, and 30% were unsure of their fertility offerings. It was the first time KFF included the question in the survey, so no data is available on how this has changed over the years.
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News Briefs: Elevance Plans to Buy Home Care Firm CareBridge
Carelon, the health services division of Elevance Health, Inc. intends to acquire home health company CareBridge. Elevance announced its intent during its Oct. 17 earnings call. CareBridge provides home- and community-based health care services for people with chronic and complex conditions. CareBridge, which operates in 17 states and Washington, D.C., employs 500 people and serves 115,000 patients. “Carelon is expanding its capabilities to manage a growing proportion of healthcare spending, supporting the long-term growth of the business and by extension, the value it creates for health plan customers,” said Elevance CEO Gail Boudreaux. Terms of the acquisition have not been disclosed. In a research note, Bernstein analyst Lance Wilkes noted that the acquisition fits in Elevance’s strategy by “1) expanding services businesses which can replace existing outside vendors to ELV’s MCO [managed care organization) business and also be cross-sold to ELV self-insured employer customers; and 2) providing these services to other MCOs, in particular for other smaller Blue Cross companies which represent an additional 65[M] members.”
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CVS Ousts CEO Lynch, Lowers Earnings Estimates as Medical-Cost Woes Persist
After multiple disappointing quarters and amid reports that CVS Health Corp.’s board of directors was considering breaking up the company, CVS said on Oct. 18 that it has named a new CEO. Additionally, CVS disclosed that its third-quarter earnings per share (EPS) will be lower than it previously estimated, and its medical loss ratio (MLR) higher — citing medical cost trends that continue to defy expectations.
Both moves caught some Wall Street analysts by surprise, although one offered that “it is hard, given the operational and stock underperformance, to say a change at the top is undeserved.”
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Elevance’s EPS Guidance Cut ‘Suggests Pain Isn’t Over’ for Medicaid MCOs
Elevance Health, Inc. disclosed in its third-quarter earnings release on Oct. 17 that it significantly lowered profit guidance for this year, citing higher utilization in Medicaid as the primary driver. Although executives said they remained confident about the company’s long-term growth, Elevance’s stock price declined by more than 12% and analysts noted they did not anticipate the insurer’s announcement.
Elevance had adjusted diluted earnings per share (EPS) of $8.37 in the third quarter, well below the $9.66 Wall Street consensus. The company now expects adjusted diluted EPS of about $33 this year, down from its previous estimate of at least $37.20, which it revealed during its first-quarter earnings call and reaffirmed during its second-quarter earnings call in July.
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