Cigna, WellCare Report Solid Third-Quarter Earnings

November 7, 2019

Both Cigna Corp. and WellCare Health Plans, Inc. delivered third-quarter 2019 earnings results that beat Wall Street’s expectations and largely impressed analysts — particularly in light of other insurers’ recent issues with medical loss ratio (MLR) results.

In its quarterly earnings report posted on Oct. 31, Cigna said its strong financial results were driven primarily by its health services and integrated medical segments.

By Leslie Small

Both Cigna Corp. and WellCare Health Plans, Inc. delivered third-quarter 2019 earnings results that beat Wall Street’s expectations and largely impressed analysts — particularly in light of other insurers’ recent issues with medical loss ratio (MLR) results.

In its quarterly earnings report posted on Oct. 31, Cigna said its strong financial results were driven primarily by its health services and integrated medical segments.

The health services segment, which includes the company’s PBM business, reported a pretax operating profit of $1.4 billion, beating Wall Street’s consensus of $1.36 billion. The insurer’s integrated medical segment, which includes its health insurance business, saw its pretax operating profit increase from $932 million to $953 million year over year.

Cigna’s MLR of 80.5% was higher than it was in the third quarter of 2018, as the company expected, but it beat the 80.8% consensus estimate, “bucking the trend seen from peers,” Citi analyst Ralph Giacobbe observed in an Oct. 31 research note. Anthem, Inc., for instance, said during its recent third-quarter earnings conference call that its full-year 2019 MLR will likely be higher than it originally estimated due to issues with Medicaid eligibility redeterminations that it’s experienced this year.

Across its books of business, Cigna reported an adjusted earnings per share of $4.54, beating the consensus $4.36, and it raised its full-year EPS estimate to a range of $16.80 to $17.00.

WellCare, which reported its financial results on Oct. 30, “delivered impressive 3Q results,” with its adjusted EPS of $5.50 beating the consensus estimate by 43%, Jefferies analysts David Windley and David Styblo wrote in a research note.

WellCare’s third-quarter 2019 MLR of 87.0% beat the consensus estimate by 130 basis points, which Windley and Styblo described as a “pretty clean result.”

Why Democrats Keep Winning on Health Care

November 6, 2019

Voters in Virginia and Kentucky sent a clear message on health care Tuesday night: Medicaid expansion and preexisting conditions are winning issues for Democrats, even as President Donald Trump and his allies try to undercut Obamacare. And strident GOP attacks on abortion weren’t enough to stave off Republican losses.

Democrat Andy Beshear, who claimed victory in Kentucky’s tight gubernatorial race, and Virginia Democrats who took back control of the state legislature promised to defend Obamacare’s popular insurance protections for preexisting conditions, and they railed against Republican plans to contract the law’s expansion of Medicaid to millions of poor adults.

Voters in Virginia and Kentucky sent a clear message on health care Tuesday night: Medicaid expansion and preexisting conditions are winning issues for Democrats, even as President Donald Trump and his allies try to undercut Obamacare. And strident GOP attacks on abortion weren’t enough to stave off Republican losses.

Democrat Andy Beshear, who claimed victory in Kentucky’s tight gubernatorial race, and Virginia Democrats who took back control of the state legislature promised to defend Obamacare’s popular insurance protections for preexisting conditions, and they railed against Republican plans to contract the law’s expansion of Medicaid to millions of poor adults.

Here are four takeaways on how health care pushed Democrats over the top Tuesday night…

Read the full Politico article

CVS Gets a 3Q Booster Shot From Aetna as Revenue Soars

November 6, 2019

CVS Health revenue surged in the third quarter as the drugstore chain and pharmacy benefits manager added health insurance and pushed ahead with a plan to change how many of its stores operate.

The company said Wednesday its roughly $69 billion acquisition of the insurer Aetna helped its top line climb 36% in the quarter while earnings rose 10%.

Overall, CVS Health booked $1.53 billion in net income on $64.81 billion in revenue. Adjusted earnings totaled $1.84 per share.

CVS Health revenue surged in the third quarter as the drugstore chain and pharmacy benefits manager added health insurance and pushed ahead with a plan to change how many of its stores operate.

The company said Wednesday its roughly $69 billion acquisition of the insurer Aetna helped its top line climb 36% in the quarter while earnings rose 10%.

Overall, CVS Health booked $1.53 billion in net income on $64.81 billion in revenue. Adjusted earnings totaled $1.84 per share.

Those results easily topped Wall Street’s expectations for earnings of $1.77 per share on $63.03 billion in revenue, according to Zacks Investment Research….

Read the full The Associated Press article

Datapoint: Indiana Pauses Medicaid Work Requirements Program

November 6, 2019

Following Arizona’s lead, Indiana became the second state in recent weeks to hold off on implementing its Medicaid work requirements program, Gateway to Work. The state said it remains committed to the program, but will wait on a federal court decision on the program’s legality. Work requirements in Arkansas and Kentucky have already been blocked by judges who ruled the programs do not suit the original purpose of Medicaid, and that CMS did not consider how many needy beneficiaries could lose coverage. Indiana currently serves 1,370,084 Medicaid members, with 365,146 enrolled in the Healthy Indiana Plan, the state’s Medicaid expansion effort and the population that would have been affected by the work requirement.

Following Arizona’s lead, Indiana became the second state in recent weeks to hold off on implementing its Medicaid work requirements program, Gateway to Work. The state said it remains committed to the program, but will wait on a federal court decision on the program’s legality. Work requirements in Arkansas and Kentucky have already been blocked by judges who ruled the programs do not suit the original purpose of Medicaid, and that CMS did not consider how many needy beneficiaries could lose coverage. Indiana currently serves 1,370,084 Medicaid members, with 365,146 enrolled in the Healthy Indiana Plan, the state’s Medicaid expansion effort and the population that would have been affected by the work requirement.

Source: AIS’s Directory of Health Plans

Blues Plans Offer ACA Coverage in Counties They Once Exited

November 6, 2019

Blues plans, testing new ways to cope with the volatility of the Affordable Care Act (ACA) individual market, in 2020 will re-enter major counties that they’d previously abandoned.

Overall, Blues plans’ participation in the individual market has remained fairly steady in the last five years, according to an analysis by the Robert Wood Johnson Foundation.

By Jane Anderson

Blues plans, testing new ways to cope with the volatility of the Affordable Care Act (ACA) individual market, in 2020 will re-enter major counties that they’d previously abandoned.

Overall, Blues plans’ participation in the individual market has remained fairly steady in the last five years, according to an analysis by the Robert Wood Johnson Foundation.

However, Blues plans in Arizona and Tennessee had abandoned major metro-area counties in recent years. Now, they’re rejoining the exchanges in those areas, having adjusted their rates and their networks accordingly.

Blue Cross Blue Shield of Arizona will rejoin the exchange in Maricopa County, which has more than 4.4 million residents. The insurer will compete with four other insurers in that county, and says it will focus on enrolling residents who currently are uninsured.

BlueCross BlueShield of Tennessee, which refunded nearly $23 million to individual and small group policyholders in September for overpayments made in 2018 and lowered rates for 2019 by an average of 14.8%, will have “nominal” rate increases of 1.4% on average for 2020 compared with 2019. The Tennessee Blues plan also will rejoin the markets in Nashville and Memphis, which it exited in 2017 amid heavy losses.

In Minnesota, the state’s reinsurance program debuted in 2018 with lower overall rates and is credited with steep premium declines for 2019. Blue Cross and Blue Shield of Minnesota, which offers only HMO Blue Plus plans, dropped rates by an average of nearly 28% in 2019.

This year, the Minnesota Blues plan will increase rates by about 5% while offering coverage statewide for the first time since 2016. “After years of volatility and unpredictability, the individual market has shown encouraging signs of stability,” says Craig Samitt, M.D., president and CEO.