Health Plan Weekly

As of Feb. 1, at least 16.4 million Medicaid enrollees had been disenrolled from coverage since last April, representing about one-third of people who had applied to have their coverage renewed, according to KFF. KFF said the number of people disenrolled is likely higher “due to varying lags for when states report data.” Of the people who had been disenrolled, 71% were terminated for procedural reasons, meaning they did not complete the renewal process in time. The disenrollment rates ranged from 13% in Maine to 61% in Texas. Overall, states and Washington, D.C., have reported renewal outcomes for 52% of people enrolled in Medicaid, while the remaining 48% of people were awaiting decisions as of Feb. 1. 

Dirk McMahon, UnitedHealth Group’s president and chief operating officer, plans on retiring, effective April 1. McMahon joined UnitedHealth in 2003 and has been president and COO since February 2021. UnitedHealth has not named a replacement for McMahon, whose previous roles at the company included CEO of UnitedHealthcare and president and COO of Optum. 

Capping off months of rumors that such a deal was brewing, The Cigna Group on Jan. 31 said it has agreed to sell its Medicare business to Health Care Service Corp. (HCSC). Industry observers say that given the near-term headwinds Medicare Advantage is facing, it’s wise for Cigna to leave a market in which it struggled to compete and focus on more promising growth opportunities. 

The $3.7 billion purchase will transfer nearly 600,000 Medicare Advantage members, more than 450,000 Medicare Supplement lives and 2.5 million Medicare Part D lives from Cigna to HCSC, the companies said. The Blue Cross Blue Shield licensee will also acquire Cigna’s CareAllies business, which offers “management services to support value-based care arrangements” and works with providers to form accountable care organizations and independent physician associations. 

Industry analysts reacted with a shrug on Jan. 31 when CMS released the much-anticipated 2025 Advance Notice of Medicare Advantage and Part D payment changes, which said that health plans can expect to receive a 3.7% average increase in risk-adjusted revenue next year.  

The 3.7% figure factors in a 2.45% revenue decline related to fee-for-service normalization and a major risk adjustment model revision that CMS is phasing in over three years, as well as an effective growth rate of 2.44% and a Star Ratings bonus impact of -0.15%. CMS estimated the revenue change from the combination of those proposed policies is -0.16%. After also factoring in an average risk score increase of 3.86%, CMS arrived at its net expected revenue change of 3.7%.  

As health care costs continue to rise, Congress may take up site-neutral payment reform or other cost control measures in coming years, if a Jan. 31 House of Representatives hearing is any indication. The House recently passed a bill, the Lower Costs, More Transparency Act (LCMTA), that includes limited site neutrality and PBM reforms, but some Congress members floated more aggressive cost-control interventions in the health care system — including tougher scrutiny on Medicare Advantage plans. 

During the Jan. 31 hearing, the leaders of the House Energy & Commerce’s Health subcommittee  — chairman Rep. Brett Guthrie (R-Ky.) and ranking member Rep. Anna Eshoo (D-Calif.) — both said that the LCMTA didn’t go far enough to control costs.