Radar on Medicare Advantage
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Amid String of Medicaid RFP Losses, Will CareSource Stay the Course?
As publicly traded insurers vie for contracts in an increasingly competitive Medicaid environment, this year has seen a considerable uptick in bid protests and legal challenges with billions of dollars at stake. Dayton, Ohio’s CareSource, one of the largest not-for-profit Medicaid insurers in the U.S., has participated in at least five such protests after embarking on an aggressive market expansion. And while its approach involving strategic partnerships with local providers has had mixed results, the insurer is intent on pursuing states where it believes it can best serve enrollees, whether that be through Medicaid or other product lines.
CareSource currently serves 2.1 million enrollees in Medicaid, Affordable Care Act exchange and dual eligible plans. According to AIS’s Directory of Health Plans (DHP), nearly 1.8 million (or about 85%) of those lives are in Medicaid plans in Georgia, Indiana, Michigan and Ohio. Its home state of Ohio is its largest Medicaid market, where it serves approximately 1.2 million individuals.
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Quality Bonus Payments Grew $10B Since 2015 — but Who Really Benefits?
The Medicare Advantage quality bonus program (QBP) can be a boon to insurers and an object of scorn to MA’s critics. With both MA enrollment and QBP payments to highly rated plans on the rise, concern about overpayments and access to high-quality plans is mounting. Seeking greater understanding of these issues, a new analysis of CMS data from the Urban Institute examined changes in Stars performance, MA plan demographics and QBP payments from 2015 to 2023. Researchers found that both Star Ratings and QBP payments per enrollee increased from 2015 to 2023, with total QBP payments reaching nearly $13 billion in 2023 compared to $3 billion in 2015. The analysis also found that plans that receive the most bonus payments are also more likely to enroll the most socioeconomically advantaged beneficiaries, raising questions about whether enhanced benefits are reaching the populations most in need of them.
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Analysts Contemplate Future of MA Under Harris Versus Trump
With Vice President Kamala Harris poised to get the Democratic nomination for president, Wall Street analysts have been busy prognosticating what that means for the array of for-profit health care firms they cover — including Medicare and Medicaid insurers.
So far, select analysts are predicting that Harris’ ascendence will give Democrats a greater chance of winning the election, which would be bad news for Medicare Advantage-focused insurers but good for those more focused on Medicaid and the Affordable Care Act exchanges.
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News Briefs: Humana Heightens MA Enrollment Projections for 2024
In its second quarter 2024 earnings report, Humana Inc. said it now expects individual Medicare Advantage membership growth of approximately 225,000 this year, up from its previous projection of approximately 150,000. The insurer on July 31 reported adjusted earnings per share of $6.96, which was higher than internal and Wall Street projections but down from its prior year EPS of $8.94, and Humana reaffirmed its adjusted EPS guidance of “approximately $16.00.” It also maintained its full-year medical loss ratio guidance of “approximately 90 percent,” which “prudently allows for the higher net inpatient costs observed in the second quarter to continue for the remainder of the year,” according to prepared remarks from Jim Rechtin, president and CEO. During a July 31 conference call to discuss the results, Rechtin added that the company has seen some “modest claims pressure in Medicaid” but does not expect it to impact full-year results. The company’s Medicaid membership is on track to grow by 250,000 lives and reach roughly 1.5 million members by the end of the year. That increase is primarily driven by new contracts in Oklahoma and Indiana, as well as growth in Humana’s Ohio Medicaid business, and partially offset by the redetermination process that is mostly completed. Its active Medicaid footprint is now nine states.
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MAOs, Brokers, Agents Get Relief With Legal Pause on Policy Changes
Medicare Advantage insurers and the agents and brokers who sell their plans got a temporary reprieve this month when the U.S. District Court for the Northern District of Texas granted a stay in two cases seeking to stop CMS from implementing new agent and broker regulations. Sources say this means the previously finalized restrictions on payments and contract terms will not take effect for the 2025 Annual Election Period, which starts on Oct. 15 and is preceded by official marketing activities beginning Oct. 1, but they advise plans to consider implementing compliant arrangements for plan year 2025 in case things go awry.
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