Medicare and Medicaid

Centene-WellCare Deal Is on Track for Approval; Combined Company Would Hold Nearly 20% of Medicaid Market

January 10, 2020

Centene Corp.’s planned acquisition of WellCare Health Plans, Inc., a $17 billion move that would create a managed Medicaid behemoth and a serious contender in the Medicare Advantage ring, is close to being a done deal. In December, the insurers received regulatory approval from the final states needed to move forward, bringing the total number to 27.

by Carina Belles

Centene Corp.’s planned acquisition of WellCare Health Plans, Inc., a $17 billion move that would create a managed Medicaid behemoth and a serious contender in the Medicare Advantage ring, is close to being a done deal. In December, the insurers received regulatory approval from the final states needed to move forward, bringing the total number to 27. The Department of Justice has yet to approve the deal, but Centene CEO Michael Neidorff on Dec. 5 informed attendees of the Forbes Healthcare Summit that he has “told the team to be ready for full integration by January 1,” and expects the deal to close in the first half of 2020. Not only will the combined company be No. 1 in Medicaid, with about 10.2 million enrollees (both Centene and WellCare are divesting their Medicaid plans in three state markets to ease antitrust concerns, see graphics below), it will also snag the No. 6 spot in the national MA market.

SOURCE: DHP, AIS’s Directory of Health Plans.

Datapoint: Molina to Acquire NextLevel Health

January 9, 2020

Molina Healthcare this week said it has entered an agreement to acquire NextLevel Health Partners, a Medicaid plan in Illinois. The move would add 51,197 lives to Molina’s existing Illinois Medicaid plan, a 23.8% boost. Molina is currently the fifth-largest Medicaid insurer in Illinois, with 215,099 members.

Molina Healthcare this week said it has entered an agreement to acquire NextLevel Health Partners, a Medicaid plan in Illinois. The move would add 51,197 lives to Molina’s existing Illinois Medicaid plan, a 23.8% boost. Molina is currently the fifth-largest Medicaid insurer in Illinois, with 215,099 members.

Source: AIS’s Directory of Health Plans

Datapoint: CMS Approves Full Medicaid Expansion, Work Requirement in Utah

January 8, 2020

CMS last month approved Utah’s “fallback” request to fully expand Medicaid in the state, a move that will add about 120,000 people to the state’s rolls. The state initially asked for a partial expansion with the same amount of federal funding, which was denied. The fallback plan, while expanding coverage to a greater number of people, called for a work requirement to apply to certain adults, which CMS also approved. Utah’s Medicaid program currently enrolls 302,683 people, with 75.3% enrolled in managed care plans.

CMS last month approved Utah’s “fallback” request to fully expand Medicaid in the state, a move that will add about 120,000 people to the state’s rolls. The state initially asked for a partial expansion with the same amount of federal funding, which was denied. The fallback plan, while expanding coverage to a greater number of people, called for a work requirement to apply to certain adults, which CMS also approved. Utah’s Medicaid program currently enrolls 302,683 people, with 75.3% enrolled in managed care plans.

Source: AIS’s Directory of Health Plans

Red States to Push for Medicaid Waivers in 2020

January 8, 2020

Conservative states are likely to push hard in 2020 for CMS approval of Medicaid waivers that will allow them to implement policies such as work requirements, while voters in some of the 14 states that have not yet expanded Medicaid could tee up referendums that would require expansion, Medicaid observers say.

By Jane Anderson

Conservative states are likely to push hard in 2020 for CMS approval of Medicaid waivers that will allow them to implement policies such as work requirements, while voters in some of the 14 states that have not yet expanded Medicaid could tee up referendums that would require expansion, Medicaid observers say.

“With the clock ticking on the [Trump] administration, they will want to get through as many waivers as possible with conservative principles [such as] work requirements and copayments, and things that discourage folks from staying on the rolls,” Jerry Vitti, founder and CEO of Healthcare Financial, Inc., says of red states.

Meanwhile, Medicaid expansion efforts in state legislatures may slow as the country approaches the 2020 election, notes Patricia Boozang, senior managing director at Manatt Health. Several states — such as Idaho, Utah and Nebraska — are in the process of expanding Medicaid in 2020 following successful ballot initiatives in the previous midterm elections.

States also are holding off on implementation of already-approved Medicaid work requirements as litigation surrounding those requirements works through the court system.

“I do think the litigation around work requirements is something that states and the administration are watching really closely,” Boozang says. “While we may see additional states seek approval, we may not see any implemented.”

Vitti adds: “If the courts say work requirements are fine, you’ll see the red states adopt them.”

Meanwhile, more than a dozen states are looking at conducting Medicaid managed care contract procurement in 2020, Boozang says. These states include: Georgia, Iowa, Indiana, Kentucky, Michigan, Missouri, Mississippi, Pennsylvania, Tennessee, Virginia, Washington, Wisconsin and West Virginia.

As states move through procurement, Boozang says she expects to see more value-based payment systems implemented, with health plans’ help. Plus, states increasingly are turning to Medicaid managed care programs to help them implement policy priorities, such as those surrounding social determinants of health, according to Boozang.

Datapoint: CareFirst to Acquire Two Medicaid Plans in DC and Maryland

January 6, 2020

CareFirst BlueCross BlueShield will add 79,819 managed Medicaid and CHIP members to its roster with its planned acquisitions of the Baltimore-based University of Maryland Health Partners, and Trusted Health Plan in Washington, D.C. The deals, once finalized, will mark CareFirst’s first foray into the Medicaid market in about two decades. The insurer currently serves 2,410,049 members in Maryland, Virginia and Washington, D.C.

CareFirst BlueCross BlueShield will add 79,819 managed Medicaid and CHIP members to its roster with its planned acquisitions of the Baltimore-based University of Maryland Health Partners, and Trusted Health Plan in Washington, D.C. The deals, once finalized, will mark CareFirst’s first foray into the Medicaid market in about two decades. The insurer currently serves 2,410,049 members in Maryland, Virginia and Washington, D.C.

Source: AIS’s Directory of Health Plans

Fueled by HIF Return, Administrative Costs, Medicare Spending Grew to $750 Billion in 2018

January 3, 2020

Medicare spending grew 6.4% in 2018, reaching $750 billion, according to CMS’s Office of the Actuary. While overall spending on personal health care, such as hospital care and physician services, grew more modestly in 2018, CMS pointed to spending on non-personal health care as a major driver for growth. The agency said this was due in part to an increase in the net cost of health insurance, as the return of the Affordable Care Act’s health insurer fee (HIF) caused Medicare Advantage plans to raise their 2018 premiums.

by Carina Belles

Medicare spending grew 6.4% in 2018, reaching $750 billion, according to CMS’s Office of the Actuary. While overall spending on personal health care, such as hospital care and physician services, grew more modestly in 2018, CMS pointed to spending on non-personal health care as a major driver for growth. The agency said this was due in part to an increase in the net cost of health insurance, as the return of the Affordable Care Act’s health insurer fee (HIF) caused Medicare Advantage plans to raise their 2018 premiums. (Congress at press time was close to finalizing a 2020 spending package that included a permanent repeal of the HIF). In a recent article on the new expenditure data, Health Affairs explained the large acceleration of government administration spending as a rebound from recovered prospective payments the federal government made in 2017, which “more than offset government administrative costs that had been disbursed during 2017.” See a timeline of Medicare spending by sponsor and year-over-year change in select expenditure categories in the graphics below.

SOURCE: CMS, Office of the Actuary, National Health Statistics Group. Visit https://go.cms.gov/34caBgw. For the Health Affairs article, visit https://bit.ly/2RKA4Lh.