Datapoint: CMS Approves DC Medicaid Waiver

November 13, 2019

CMS last week approved a first-of-its-kind Section 1115 Medicaid waiver in the District of Columbia, which will expand behavioral health access to D.C. Medicaid eligibles residing in inpatient mental health facilities, as well as those suffering from serious mental illnesses or emotional disturbances who may be chronically homeless.

CMS last week approved a first-of-its-kind Section 1115 Medicaid waiver in the District of Columbia, which will expand behavioral health access to D.C. Medicaid eligibles residing in inpatient mental health facilities, as well as those suffering from serious mental illnesses or emotional disturbances who may be chronically homeless. The District currently serves 273,352 Medicaid beneficiaries, with 77.4% enrolled in managed care plans.

Source: AIS’s Directory of Health Plans

Molina Loses Parts of Texas STAR+PLUS Medicaid

November 13, 2019

The Texas Health and Human Services Commission (HHSC) on Oct. 29 delivered the highly anticipated results of its latest managed Medicaid procurement, revealing its intent to award contracts to Aetna Inc., Anthem, Inc., El Paso Health Plan, Molina Healthcare, Inc., Centene Corp.’s Superior Health Plan and UnitedHealthcare to serve approximately 525,000 high-acuity enrollees through the STAR+PLUS program. The news came as a disappointment to Molina, which had been banking on reprocuring its existing business in six regions instead of renewing just one service area and picking up a new zone.

by Lauren Flynn Kelly

The Texas Health and Human Services Commission (HHSC) on Oct. 29 delivered the highly anticipated results of its latest managed Medicaid procurement, revealing its intent to award contracts to Aetna Inc., Anthem, Inc., El Paso Health Plan, Molina Healthcare, Inc., Centene Corp.’s Superior Health Plan and UnitedHealthcare to serve approximately 525,000 high-acuity enrollees through the STAR+PLUS program. The news came as a disappointment to Molina, which had been banking on reprocuring its existing business in six regions instead of renewing just one service area and picking up a new zone.

Molina at its May investor day provided 2020 premium guidance that was above Wall Street consensus and a long-term earnings per-share (EPS) growth target in the range of 12% to 15%. Specifically, the company for 2020 forecast annual premiums of $17.0 billion to $17.3 billion, or 7% to 9% growth, before factoring in the return of the Affordable Care Act health insurer fee.
But that growth included the status quo in Texas, and executives during its latest quarterly earnings call acknowledged that the insurer will have to adjust its expectations for 2020 on account of an anticipated four-month revenue shortfall.

Molina currently serves 86,000 STAR+PLUS members in the Bexar, Dallas, El Paso, Harris, Hidalgo and Jefferson service areas. For the contract starting in 2020, it will retain only the Hidalgo area and add the North East region. The change, if finalized, would mean an annual revenue loss of approximately $930 million.

Jefferies securities analyst David Windley in an Oct. 30 research note wrote that this latest setback “is likely destabilizing” with a negative EPS impact of roughly 4% to 5%.

But Molina CEO Joseph Zubretsky during the earnings call emphasized that Texas is a short-term blip that can be overcome.

For the quarter ending Sept. 30, Molina reported EPS of $2.75 and an improved medical loss ratio of 86.3%. Premium revenue for the recent quarter was $4.1 billion.

Datapoint: Georgia Submits Plan to Transform Medicaid

November 12, 2019

Georgia Governor Brian Kemp (R) on Oct. 31 unveiled a plan that would expand Medicaid in the state —in tandem with a work requirement. The expansion would qualify uninsured adults living at or below the federal poverty line for Medicaid benefits if they participate in 80 or more hours per month of work, volunteering, school or another qualifying activity. The proposal, which must be approved by CMS, also includes plans to set up a reinsurance program and give the state control of Affordable Care Act subsidies. Georgia currently serves 2,024,458 Medicaid beneficiaries, with 71.0% enrolled in managed care plans.

Georgia Governor Brian Kemp (R) on Oct. 31 unveiled a plan that would expand Medicaid in the state —in tandem with a work requirement. The expansion would qualify uninsured adults living at or below the federal poverty line for Medicaid benefits if they participate in 80 or more hours per month of work, volunteering, school or another qualifying activity. The proposal, which must be approved by CMS, also includes plans to set up a reinsurance program and give the state control of Affordable Care Act subsidies. Georgia currently serves 2,024,458 Medicaid beneficiaries, with 71.0% enrolled in managed care plans.

Source: AIS’s Directory of Health Plans

Georgia Unveils Bold ACA Waiver Plan

November 12, 2019

More than a year after the Trump administration issued controversial new guidelines for the Affordable Care Act’s Section 1332 waivers, Georgia became the first state to take CMS up on that increased flexibility by unveiling a draft waiver proposal that would make some major changes to its individual insurance market.

The state’s waiver proposal has two primary phases: first is a reinsurance program to help insurers pay high-cost claims (and thus lower premiums), set to go into effect in 2021. Then there’s the “Georgia Access Model,” which starting in 2022 would:

By Leslie Small

More than a year after the Trump administration issued controversial new guidelines for the Affordable Care Act’s Section 1332 waivers, Georgia became the first state to take CMS up on that increased flexibility by unveiling a draft waiver proposal that would make some major changes to its individual insurance market.

The state’s waiver proposal has two primary phases: first is a reinsurance program to help insurers pay high-cost claims (and thus lower premiums), set to go into effect in 2021. Then there’s the “Georgia Access Model,” which starting in 2022 would:

✦ Direct consumers to buy coverage through private broker or insurer websites, rather than HealthCare.gov;
✦ Put the state in control of ACA subsidies; and
✦ Allowhealth plans that don’t cover all 10 of the ACA’s essential health benefits (EHB) categories to be sold alongside qualified health plans (QHPs).

David Anderson, a research associate at the Duke-Margolis Center for Health Policy, says the basic idea is to exclude select EHB categories which would create a lower actuarial value in exchange for cheaper premiums. In his view, the population that stands to lose the most in such a scenario is people who don’t qualify for subsidies but have significant medical conditions. “Their premiums are going to skyrocket because they’re still going to need all the EHBs,” he says.

Anderson predicts insurers will “love the reinsurance” portion of Georgia’s proposal and be able to handle the other individual market changes. “The biggest challenge will be projecting relative risk and market share between the full EHB and the limited EHB plans,” he adds.

But Joel Ario, managing director of Manatt Health, points out that “health insurers are generally risk averse; this seems to have a lot of risky dimensions to it.” Some unanswered questions, he says, include how the state will implement a system with alternative enrollment channels and what type of non-QHP health plans will actually be rolled out.

Datapoint: Novartis Scores Win for Neulasta Biosimilar

November 11, 2019

Three year’s after its initial rejection, the FDA last week approved Novartis’ biosimilar to Amgen’s Neulasta, which is manufactured by the company’s Sandoz unit. For the treatment of neutropenia, Neulasta is covered under both the medical and pharmacy benefit for 44% of covered lives. In the pharmacy benefit, Neulasta holds preferred status for 10% of covered lives, growing to 37% with prior authorization and/or step therapy. Neulasta also faces biosimilar competition from Mylan and Coherus BioSciences.

Three year’s after its initial rejection, the FDA last week approved Novartis’ biosimilar to Amgen’s Neulasta, which is manufactured by the company’s Sandoz unit. For the treatment of neutropenia, Neulasta is covered under both the medical and pharmacy benefit for 44% of covered lives. In the pharmacy benefit, Neulasta holds preferred status for 10% of covered lives, growing to 37% with prior authorization and/or step therapy. Neulasta also faces biosimilar competition from Mylan and Coherus BioSciences.

SOURCE: MMIT Analytics, as of 11/6/19