Health Plan Weekly

Although executing mergers and acquisitions (M&A) is an important part of health insurers’ growth toolkit, industry insiders tell AIS Health, a division of MMIT, that companies could face challenges completing deals in 2024 due to factors such as high interest rates and government intervention.  

The Federal Trade Commission (FTC) and Department of Justice (DOJ) last month finalized updated merger guidelines for the first time since 2020. The FTC and DOJ noted the guidelines “are not themselves legally binding, but provide transparency into the Agencies’ decision-making process.” 

Law firm Morgan Lewis wrote in a Dec. 21 brief that the FTC and DOJ are “dramatically expanding the number and type of transactions that the agencies will consider presumptively unlawful,” although the authors noted that the agencies have both “lost several merger cases in the last few years.” 

Managed care experts predict that 2024 will see further and deeper adoption of artificial intelligence (AI) across the health care sector despite emerging legal risk. Meanwhile, regulation of AI in health care is already underway, but mostly at the state level, with action in Congress stalled and the Biden administration taking an incremental approach. 

Health insurers for years have put big data at the center of significant capital investments and operational changes, as major insurers have portrayed themselves as technology players with vast proprietary data sets. For many insurers, automation and algorithms are already intrinsic to claims processing, prior authorization, revenue cycle management and actuarial work. AI could make those insurance processes faster and cheaper.  

Health insurer trade groups have several bones to pick with the proposed 2025 Notice of Benefit and Payment Parameters (NBPP), the annual regulation that sets the rules of the road for the Affordable Care Act exchanges. In the case of certain proposals, AHIP and the Blue Cross Blue Shield Association (BCBSA) are even arguing that CMS is exceeding its legal authority. 

Those proposed rule changes concern the process that states use to define their essential health benefits (EHB) benchmark plans, according to comments on the 2025 NBPP filed on or before a Jan. 8 deadline. The ACA lists 10 general categories of EHB that all individual market plans must cover — such as emergency services and prescription drugs — allowing states to determine the specific services that are included in those broad categories. To do that, state officials select a benchmark plan among a list of HHS-approved options, and insurers then use that benchmark to design their benefits.  

The annual J.P. Morgan Health Care Conference in San Francisco, which took place from Jan. 8-11, has a well-earned reputation as the site of dealmaking. Last year, for example, rumors of CVS Health Corp.’s eventual deal to acquire primary care provider Oak Street began to emerge.  

The 2024 edition proved to be less fruitful for dealmaking as far as managed care firms were concerned — never mind the $6.4 billion in deals announced at the start of the conference by Johnson & Johnson, Merck & Co. Inc. and Boston Scientific Corp.  

Still, CVS and The Cigna Group each faced questions about the aftermath of megadeals, both real and imagined. 

Over 20 million people have enrolled in Affordable Care Act marketplace coverage since the start of the 2024 open enrollment period (OEP), reaching a record for the third consecutive year, according to CMS. Over 3.7 million people who have signed up for ACA plans are new enrollees this year.

More than 15.5 million people have enrolled through HealthCare.gov in the 32 states that use that platform, and another 4.8 million have enrolled across 18 states and the District of Columbia, which use their own marketplaces.

After adjusting enrollment figures to account for the fact that there is one fewer day included in the 2024 OEP data compared to last year’s report, an ACAsignups.net analysis showed that every state except Maine and the District of Columbia saw membership growth in 2024, ranging from 2.8% in Hawaii to 78.8% in West Virginia. A total of 10 states reported signup surges of more than 50%.