Health Plan Weekly
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HSA-Eligible Plans Have Mixed Impact on Health Care Use, No Impact on Spending
People with health savings account-eligible high-deductible health plans (HDHPs) use less outpatient services and fill fewer prescription medications than people with PPOs, but HSA plan enrollment appears to have no impact on total health care spending, according to a recent study published by the Employee Benefit Research Institute (EBRI).
As of 2022, 57.9% of employees were enrolled in an HSA-eligible health plan, while 32.3% of them were in an HDHP that was not associated with an HSA.
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MCO Stock Performance, April 2024
Here’s how major health insurers’ stock performed in April 2024. Elevance Health, Inc. had the highest closing stock price among major commercial insurers as of April 30, 2024, at $528.58. Humana Inc. had the highest closing stock price among major Medicare insurers at $302.09.
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News Briefs: Judge Allows RICO Suit Against Centene to Proceed
A federal judge on May 2 ruled that the majority of claims against Centene Corp. can move forward in a lawsuit that accuses the insurer of defrauding customers via its marketing of Affordable Care Act exchange plans. The suit, filed in August 2022, accuses Centene and two of its subsidiaries of misleading consumers by publishing provider directories that are not up to date and that misrepresent the benefits that members will receive when they purchase an Ambetter insurance plan. Those primarily low-income consumers then have trouble finding providers who will take their insurance, according to a press release from the law firm representing the plaintiffs. The suit claims that this alleged scheme violates the Racketeer Influenced and Corrupt Organizations Act (RICO) and numerous state laws, and attorneys for the plaintiffs are seeking to certify the lawsuit as a class action.
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Insurers Urged to ‘Look Carefully’ at AI Tools in Wake of New Rule
On April 26, the Biden administration released a final rule which, in addition to strengthening the Affordable Care Act’s antidiscrimination protections, attempts to address rising concern about health insurers’ use of artificial intelligence, algorithms and other tools to make care and coverage decisions.
Managed care experts say that the new regulation — titled Nondiscrimination in Health Programs and Activities — likely won’t catch insurers off guard given the scrutiny they are already receiving about their use of AI. However, “they’re going to have to look carefully at their use of any kind of automated tools,” predicts Harvey Rochman, a litigation partner at Manatt, Phelps & Phillips, LLP. “There’ll be a large focus on the kinds of automated tools that plans can use in various aspects of their work, from claims to utilization management.”
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High MA Utilization Spurs CVS 1Q Earnings Miss, Selloff
CVS Health Corp.’s poor Medicare Advantage results in the first quarter of 2024 made the diversified health care and retail company the object of Wall Street’s ire. Analysts were highly critical of the firm’s performance, and the company’s stock price declined sharply on May 1, the day that the results were released.
CVS Chief Financial Officer Thomas Cowhey said during a May 1 earnings call that CVS’s MA segment is poised to “lose a significant amount of money this year.”
CVS’s MA care utilization was notably high, even compared to other listed insurers, who have also had to muddle through high utilization in MA over the past year. According to a press release on the firm’s first-quarter results, medical loss ratio (MLR) for the entire health benefits division during the quarter was 90.4%, up 5.8% year over year.
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