Health Plan Weekly

Ahead of the 2024 open enrollment period for Affordable Care Act exchange plans that began on Nov. 1, major U.S. health insurers issued a spate of press releases touting their plan options and listing new areas in which they’d offer coverage. While ACA marketplace experts say that 2024 will not feature any seismic changes in terms of insurer competition — given the exchanges’ history of mass insurer exits and panic over “bare counties” with no available health plans, that may be a good thing. 

“Overall participation by carriers is down from last year, when there was also a slight decline,” says Katherine Hempstead, Ph.D., who for years has helped produce the Robert Wood Johnson Foundation (RWJF) ACA Marketplace Participation Tracker. “So after several years of increased entry into new states, now we have seen a real leveling off,” adds Hempstead, who is RWJF’s senior policy adviser.  

The Biden administration on Oct. 27 released a new proposed rule governing the troubled balance billing arbitration process established as part of the No Surprises Act (NSA), the 2021 law that banned surprise medical billing. Professional and trade groups for providers, which have filed legal challenges to previous rulemaking governing the arbitration process — called Independent Dispute Resolution (IDR) — declined to say whether they would challenge the proposed rule if implemented in its current form, but at least one legal expert thinks that the rule has a good chance of lasting. 

The NSA forced payers and providers to hold patients harmless, from a medical-billing perspective, when they inadvertently seek out-of-network care. Thus, the law set up the IDR process to resolve payment disputes that payers and providers are now responsible for settling themselves instead of balance-billing patients. 

Humana Inc.’s stock dipped after its third-quarter 2023 earnings report, with analysts largely blaming the firm’s revised estimate of its full-year medical loss ratio (MLR). The Medicare Advantage-focused insurer said that while it had been expecting health care utilization to stabilize, instead it continued at the elevated level that Humana first started noticing earlier in the year. 

“This morning, we reported that our insurance segment benefit ratio exceeded expectations by 40 basis points due to higher medical costs in our Medicare Advantage business,” Chief Financial Officer Susan Diamond said during the company’s Nov. 1 earnings call. “We continue to experience an increase in COVID admissions in the third quarter, whereas our forecast previously assumed that this would occur in the fourth quarter.” 

The Cigna Group posted results for the third quarter of 2023 that impressed Wall Street, driven by a lower-than-expected medical loss ratio (MLR). However, Cigna executives faced questioning from analysts on potential PBM regulations. 

Cigna enjoyed relatively low care utilization, with MLR at 80.5%, beating the Wall Street consensus projection by 12 basis points. The managed care division’s adjusted revenues were $12.7 billion, up 14% year over year. 

“Our medical care ratio was better than expectations, driven by our U.S. commercial business. More specifically, our favorable [MLR] performance was a reflection of ongoing disciplined pricing and continued affordability initiatives,” said Cigna Chief Financial Officer Brian Evanko during a Nov. 2 earnings call. 

In the third quarter, CVS Health Corp. performed well overall, but the firm’s health insurance division was a drag on profits due to higher-than-expected utilization, especially in Medicare Advantage. However, a big gain in MA Star Ratings could bode well for the firm’s health benefits division going forward. 

CVS faced a higher-than-expected medical loss ratio (MLR) in its health benefits division, Aetna, exceeding the Wall Street consensus by 140 basis points. That high utilization primarily took place in Aetna’s MA book of business, according to CVS executives.