Health Plan Weekly

More than half — 52% — of adults covered by commercial insurance deal with social risk factors that can raise health care costs, according to a Feb. 20 white paper from UnitedHealth Group and the Health Action Council (HAC). UnitedHealth and HAC executives say that the report’s findings can help health plans and plan sponsors be more proactive in addressing social determinants of health (SDOH)-related needs in commercial populations. 

Some SDOH challenges faced by the commercially insured population include social isolation and problems with finances, food, and housing, per the report. Twenty-six percent of the studied group faced one SDOH risk, 16% faced two SDOH risks and 10% faced three or more. 

With respective increases of 10.8% and 10.7% in 2023, health care spending on prescription drugs and home health care rose the fastest out of seven health care categories analyzed in a recent Altarum report.

Total national health care expenditures grew by 6.2% last year, while gross domestic product (GDP) increased by 6.3% year over year. In December 2023, health care spending accounted for 17.2% of GDP and has remained below 17.5% since January 2022. About 84% of health spending was attributed to personal health care, half of which was spent on hospital care and physician and clinical services.

Since the Supreme Court overturned Roe v. Wade last year, 8% of large firms offering health insurance to their employees reduced or expanded their coverage for abortion. That’s according to an analysis of KFF’s Employer Health Benefits Survey, which found that 3% of firms whose largest plan does not cover abortion or covers it under limited circumstances reduced or eliminated coverage for abortion. Meanwhile, 12% of firms whose largest plan covers abortion in most or all circumstances added or expanded abortion coverage. KFF defined large employers as those with at least 200 workers.  

U.S. health insurance companies’ capitalization levels are expected to increase this year but at a lower rate than last year, according to an AM Best report released on Feb. 29. The credit rating firm noted that the growth should slow because many insurers are seeing less profitability in their Medicare Advantage and managed Medicaid books of businesses. The report found the growth in net premiums written by health insurers increased 10% in 2022 and 7.6% through the first three quarters of last year. 

Although Blue Cross Blue Shield plans’ margins started rising again in 2023 after a two-year slump, industry analysts say that a diverse array of factors could prevent continued margin expansion among the Blues this year.  

“We don’t question that Blues overall will probably remain profitable…but the improvement in the margins in ’23 probably is not going to reoccur [this year],” says Bridget Maehr, director at the insurance-focused credit rating firm AM Best. “We’re probably going to see a little bit more of a normalization of margins.” 

According to a new analysis from Mark Farrah Associates, Blues’ aggregate profit margin — net income divided by total revenues — swelled to 6.1% in the third quarter of 2020. During that time, the uptick in COVID-19-related care was far outpaced by declines in routine care, causing coffers to fatten across the insurance industry. Blues’ aggregate margin then declined to 3.9% by the third quarter of 2021, and it fell further to 3.0% in the third quarter of 2022.  

A vocal contingent of providers has argued that the No Surprises Act (NSA), the 2020 law that banned surprise medical billing in most cases, has limited their ability to get fair in-network rates from insurers, disincentivizing network participation. However, experts say that this complaint misses the point of the reform — and recent data indicate that the opposite of what providers argue may be true. 

The NSA stipulates that when a patient is being treated by an out-of-network provider without having agreed to it first — which often happens in emergency rooms — the provider can only charge the patient their maximum in-network cost sharing amount. If there is an outstanding balance after the patient is billed that amount, the provider has two options for payment: The provider can either accept the median in-network rate for the care in question, or submit the disputed bill to a binding arbitration process called Independent Dispute Resolution (IDR).