House Committee Report Takes Aim at Short-Term Plans

July 8, 2020

More than a year after they began probing health insurers and brokers for information to fuel an investigation of short-term, limited-duration insurance (STLDI) plans, Democratic leaders of the House Energy & Commerce Committee released a report concluding that this market’s growth has come at the expense of consumers who are often duped into purchasing bare-bones coverage.

Policy experts, however, disagree about what conclusions can actually be drawn from the latest salvo in an ongoing debate over alternatives to Affordable Care Act (ACA) exchange plans.

By Leslie Small

More than a year after they began probing health insurers and brokers for information to fuel an investigation of short-term, limited-duration insurance (STLDI) plans, Democratic leaders of the House Energy & Commerce Committee released a report concluding that this market’s growth has come at the expense of consumers who are often duped into purchasing bare-bones coverage.

Policy experts, however, disagree about what conclusions can actually be drawn from the latest salvo in an ongoing debate over alternatives to Affordable Care Act (ACA) exchange plans.

“The nutshell of the report is it confirms everything that these sort of smaller studies that have been highly imperfect have showed about this market,” says Katie Keith, an attorney, research professor at Georgetown University’s Center on Health Insurance Reforms. That includes misleading marketing, various benefit gaps, the use of pre-existing condition exclusions and plan rescissions, she adds.

To Keith, the most striking aspect of the report was how many STLDI plans are being sold through associations, which makes it more difficult for individual states to regulate them.

But Chris Pope, a senior fellow at the right-leaning Manhattan Institute, says “it’s of limited value to have an analysis that’s kind of saying, ‘Well, what is the worst thing that we can find about this market and judge a market by the worst possible thing that’s out there.’”

In Pope’s view, the most interesting finding was the fact that 3 million people were enrolled in STLDI plans in 2019. “It’s somewhat toward the top end of estimates that had been put out previously — clearly a lot of people do value these plans,” says Pope, who authored a report in 2019 for the Manhattan Institute that argued the merits of STLDI plans.

The House committee report calls for federal legislation that subjects STLDI plans to all of the ACA’s protections. In the absence of that, it recommends that states limit STLDI plan duration to 90 days, prohibit renewability, ban the sale of STLDI plans during ACA open enrollment, require such plans to be sold only in person to stymie aggressive marketing tactics, and comply with the ACA’s consumer protection provisions.

Datapoint: Bright Health Plots 2021 Expansion

July 7, 2020

Startup insurer Bright Health last week unveiled its 2021 market expansion plans. For the first time, the insurer will offer products to employer groups, including fully insured small group plans in Denver, Nashville, Memphis and Nebraska. In addition, the insurer will bring its individual and family plans to new markets in Florida and North Carolina, and expand to the Chicago area in Illinois. On the Medicare Advantage side, Bright Health will expand its Florida offerings to Fort Lauderdale. Bright Health currently enrolls 158,698 people in its individual commercial products, and 5,118 Medicare Advantage members.

Startup insurer Bright Health last week unveiled its 2021 market expansion plans. For the first time, the insurer will offer products to employer groups, including fully insured small group plans in Denver, Nashville, Memphis and Nebraska. In addition, the insurer will bring its individual and family plans to new markets in Florida and North Carolina, and expand to the Chicago area in Illinois. On the Medicare Advantage side, Bright Health will expand its Florida offerings to Fort Lauderdale. Bright Health currently enrolls 158,698 people in its individual commercial products, and 5,118 Medicare Advantage members.

Source: AIS’s Directory of Health Plans

Upheld Transparency Rule Is Slated to Reshape Payer-Provider Negotiations

July 7, 2020

In another blow to an industry already beleaguered by the COVID-19 pandemic, a federal judge recently upheld a federal rule that requires hospitals to engage in unprecedented price transparency measures.

The rule would require hospitals to disclose the rates they negotiate with payers for all items and services they offer. It is slated to go into effect on Jan. 1, 2021, but the American Hospital Association (AHA) and other trade groups and health systems sued to block it.

By Leslie Small

In another blow to an industry already beleaguered by the COVID-19 pandemic, a federal judge recently upheld a federal rule that requires hospitals to engage in unprecedented price transparency measures.

The rule would require hospitals to disclose the rates they negotiate with payers for all items and services they offer. It is slated to go into effect on Jan. 1, 2021, but the American Hospital Association (AHA) and other trade groups and health systems sued to block it.

The crux of the plaintiffs’ argument in American Hospital Association v. Azar is that CMS exceeded its authority by redefining the “standard charges” that hospitals must disclose under the Affordable Care Act to include negotiated rates. But in a decision issued June 23, U.S. District Court Judge Carl Nichols determined that CMS’s interpretation of the statute was reasonable.

The AHA has already appealed the decision, and depending on how the D.C. Circuit Court rules on that appeal, the case could make it to the Supreme Court, says David Kaufman, a partner at Laurus Law Group LLC.

“Insurers today actually do have a pretty good sense of how hospitals are charging, but this is going to be a quantum leap forward for them in understanding the strategy that hospitals take in negotiating across insurance markets,” Dan Mendelson, founder of Avalere Health says regarding what will happen if the rule does take effect.

However, “the insurer will have more information, but I question whether they will have more leverage,” Mendelson says. “I think over time what this [rule] is likely to do is to drive more consistency in pricing — not necessarily lower prices across the board.”

Kaufman observes that the disclosure of hospitals’ negotiated rates may not have a uniform impact across different types of insurers.

“In certain ways, it’s a procompetitive kind of rule by providing more transparency,” he says. “However, large established insurers that have the advantage of broad networks with lower prices based on their large membership benefit by keeping their prices confidential. It helps them with providing better prices to large employers, etc. So by making those prices more transparent, it might ease barriers to entry [for] other insurers.”

Datapoint: Centene to Acquire Shuttered Illinois Medicaid Plan’s Membership

July 6, 2020

Centene Corp. last week said that its Illinois Medicaid subsidiary, Meridian Health Plan of Illinois, Inc., will absorb about 56,000 members from the recently shuttered NextLevel Health Partners. The Chicago-based Medicaid plan closed its doors after a planned acquisition by Molina Healthcare fell through in April. Centene’s two Illinois subsidiaries, Meridian and IlliniCare, currently serve 344,365 Medicaid members in the state.

Centene Corp. last week said that its Illinois Medicaid subsidiary, Meridian Health Plan of Illinois, Inc., will absorb about 56,000 members from the recently shuttered NextLevel Health Partners. The Chicago-based Medicaid plan closed its doors after a planned acquisition by Molina Healthcare fell through in April. Centene’s two Illinois subsidiaries, Meridian and IlliniCare, currently serve 344,365 Medicaid members in the state.

Source: AIS’s Directory of Health Plans

Reports Show Medicaid MCOs Are ‘Dominant,’ Increase Affordability

July 6, 2020

Two recent reports found that Medicaid managed care plans now enroll most Medicaid members, help keep costs and premiums low in the markets where they participate, and are competitive with commercial plans at the low end of the individual market in areas including network quality and benefit design.

One white paper was prepared by consultancy The Menges Group for America’s Health Insurance Plans (AHIP), and the other was authored by researchers at the Robert Wood Johnson Foundation (RWJF) and Urban Institute.

By Peter Johnson

Two recent reports found that Medicaid managed care plans now enroll most Medicaid members, help keep costs and premiums low in the markets where they participate, and are competitive with commercial plans at the low end of the individual market in areas including network quality and benefit design.

One white paper was prepared by consultancy The Menges Group for America’s Health Insurance Plans (AHIP), and the other was authored by researchers at the Robert Wood Johnson Foundation (RWJF) and Urban Institute.

The Menges Group-AHIP white paper, which had a national scope, found that Medicaid MCO enrollment increased by 121% between fiscal years 2010 and 2018, from 26 million to over 56 million members, and that as of 2018, more than 75% of all Medicaid enrollees are members of an MCO, up from 50% in 2010. The report also found that, since 2017, capitated payments to MCOs have exceeded fee-for-service expenditures.

The RWJF-Urban Institute paper, which relied on case study surveys in Arkansas, California, Florida, New York, Ohio, and Washington state, concluded that MCOs offer coverage that is at least as good as commercial plans in the low end of the Affordable Care Act individual market.

“Many [stakeholders] feel there are no longer major distinctions between Medicaid and commercial insurers in the marketplaces. Most interviewees have positive perceptions of Medicaid insurers, crediting their ability to increase choice and affordability in the individual health insurance market,” wrote the paper’s authors.

Most of the surveyed stakeholders, which the paper says “included representatives from state departments of insurance, hospital associations, medical or primary care provider associations, insurance brokers, and consumer advocates,” believe that Medicaid MCOs have improved the level of competition in their state marketplace, and offer their members similar network quality to commercial plans.