Health Plan Weekly

Citing, in part, an increased likelihood that “One Big Beautiful Bill Act” will make significant cuts to government-funded health care programs, Fitch Ratings on June 17 downgraded its outlook for the U.S. health insurance sector from “neutral” to “deteriorating.”

Brad Ellis, senior director of North American insurance ratings at Fitch, says the move “does not necessarily mean there will be negative rating actions.” But it does suggest that “conditions in the sector are likely to add downward pressure to the credit profiles of companies” in the health insurance industry, he tells AIS Health, a division of MMIT.

During Humana Inc.’s Investor Conference on June 16, the company acknowledged it would likely face challenges next year due to decreased Star Ratings, but said it expects to be back on track financially by 2028 and meet its long-term growth targets. Wall Street analysts applauded Humana’s detailed analysis given during the nearly four-hour conference, although some noted that there is still uncertainty about whether Humana will meet its goals considering the company’s recent missteps and Medicare Advantage uncertainties.

In October, Humana disclosed that it would have only 25% of its MA members enrolled in plans with 4 or more stars in 2026, a significant decline from about 95% this year. Humana then sued CMS, alleging the agency lowered the Star Ratings for at least a dozen of its plans based on three phone calls that were handled improperly. CMS denied Humana’s appeal to reverse its Star Ratings, but the lawsuit is still pending.

This month, both Cigna Healthcare and Independence Blue Cross unveiled new artificial intelligence (AI) tools aimed at helping members get better customer service from their health plans. One expert says such announcements signal that payers are ready to go all-in on the technology — but they also aim to do so thoughtfully.

“AI has been now embedded long enough that they’re starting to see some benefits out of it, so it’s not surprising that they’re going to start making more and more visible announcements,” says Ashraf Shehata, national sector lead for health care and life sciences at KPMG. “Maybe a year ago, we were talking about what it could be. Now, organizations are starting to see some metrics and data” on AI’s utility, he adds.

As health care costs continue to significantly increase, employers are paying closer attention to their spending on vendors and making sure those outside companies are helping them meet their goals, according to a recent WTW survey. Jeff Levin-Scherz, M.D., WTW’s population health leader, tells AIS Health that the scrutiny of vendors is a change from recent years when employers invested more in vendors with the hope that they could help them control costs and make their employees healthier.

WTW’s Benefit Trends Survey, which was released on June 9, found that 57% of employers said they were planning on or considering either enhancing the value of the health care benefits vendors within the next three years or switching to better-value vendors. That was tied for the third-most common approach for companies, following realigning spending across benefits (63%) and adopting navigation solutions to support employees using benefits (60%). Levin-Scherz attributes the focus on vendors to the fact that the cost of medical care in the U.S. is projected to increase by 10.2% this year, among the highest growth rates in more than two decades.

A large majority, or 77%, of the American public supports extending the enhanced Affordable Care Act subsidies that are set to expire at the end of the year. That’s according to the latest KFF Health Tracking poll, which also found that 22% of poll respondents supported letting the enhanced subsidies expire. However, the poll found that 72% of Americans have heard little or nothing at all about the enhanced subsidies, and “people’s views on whether to extend them can shift when presented with different facts and arguments about their impact.” For example, support for extending the tax credits waned when people were told it would increase the budget deficit, but support for an extension swelled when people learned that letting the subsidies expire would decrease insurance affordability and lower insured rates.