Health Plan Weekly
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Some Insurtech, Blues CEOs Log High Pay as Executive Comp Changes Loom
In the latest round of health insurer executive compensation data collected by AIS Health, there were once again intriguing stories to tell — such as why an insurtech CEO appeared to outearn the heads of the industry’s largest insurers, or what led a Blue Cross Blue Shield affiliate to nearly double its CEO’s compensation year over year.
However, finance experts who spoke to AIS Health, a division of MMIT, say that the biggest story might just be a recent court decision involving none other than Tesla, Inc. CEO Elon Musk, as the ruling could influence how all types of companies — including health insurers — determine their chief executives’ compensation going forward.
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CMS, Senate Seek to Crack Down on Insurer Use of AI
In a recent memo, the Biden administration clarified restrictions on the use of artificial intelligence in Medicare Advantage coverage decisions. Congress may also eventually weigh in on AI use in federal health insurance programs: The Senate Finance Committee on Feb. 8 held a hearing in which senators indicated they may tighten the rules on payer and provider use of AI, particularly in Medicare and Medicaid.
In its Feb. 6 memo, CMS sought to address questions it received after finalizing a rule last April that made technical changes to the MA program. The frequently asked questions (FAQ) document confirmed that “an algorithm or software tool can be used to assist MA plans in making coverage determinations,” but it also emphasized that plans must base coverage decisions “on the individual patient’s circumstances.” According to one D.C. insider, the rule may force plans to move faster to curb misuse of AI and algorithms in decision making.
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Plans May Feel More Pressure from Employers to Fix Health Disparities
A recent report from Morgan Health, JP Morgan Chase & Co.’s health care venture fund and consultancy, documents troubling disparities for health care access and outcomes among Black, Asian American and Hispanic employer-sponsored insurance plan members; lesbian, gay and bisexual (LGB) plan members; and ESI members with low incomes. Experts tell AIS Health, a division of MMIT, that plan sponsors and insurers must consider plan design and provider incentives, among other strategies, to close health disparity gaps.
Plan sponsors and insurers can take proactive steps to reduce health disparities among their plan members, experts say — and they add that there are clear business incentives for doing so.
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Health Insurer Executive Compensation Database, 2019-2022
CEOs of health insurance companies have received increasing pay packages over the past few years, AIS Health’s Executive Compensation Database shows. The database includes major health insurers’ executive compensation from 2019 to 2022 — collected from individual companies, state insurance documents and U.S. Securities and Exchange Commission filings — and their national membership information as of the third quarter of 2023, per AIS’s Directory of Health Plans. The database will be updated annually.
Several states do not disclose compensation data for specific executives at health insurance companies or do not collect compensation data. Some insurance companies made leadership changes over the years.
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News Briefs: AHIP CEO Calls for ‘Stability’ in MA Market
In a post published on the insurer trade group’s website, AHIP CEO and President Mike Tuffin advocated for a better-funded Medicare Advantage program. The post occurred about two weeks after CMS released the 2025 Notice of Medicare Advantage and Part D payment changes, which the agency estimated would result in a -0.16% revenue change without an increase in risk scores. Tuffin wrote that “it is essential that funding keep pace to ensure stability and prevent erosion in the benefits and affordability seniors count on in Medicare Advantage.” He cited an ATI Advisory report from March 2023 that found MA enrollees save an average of $2,400 annually compared with fee-for-service Medicare members, as well as a January AHIP report that found the MA population “is both more diverse and lower income than enrollees in fee-for-service Medicare.”
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