Health Plan Weekly

Will COVID-19 Advance Automatic Health Insurance Enrollment?

May 26, 2020

As the COVID-19 pandemic continues to ravage the U.S. economy, it would seem to be the perfect time for policymakers to explore a policy option that has garnered rare bipartisan support: automatic health insurance enrollment.

“We have huge numbers of people who are losing employer-based coverage; most of them are eligible for some kind of help, but we know historically most laid-off workers do not enroll in coverage for which they qualify,” said Stan Dorn, director of the National Center for Coverage Innovation and senior fellow at Families USA. “It’s just overwhelming to be grappling with job loss and therefore it becomes imperative to make enrollment as easy, seamless and automatic as possible.”

By Leslie Small

As the COVID-19 pandemic continues to ravage the U.S. economy, it would seem to be the perfect time for policymakers to explore a policy option that has garnered rare bipartisan support: automatic health insurance enrollment.

“We have huge numbers of people who are losing employer-based coverage; most of them are eligible for some kind of help, but we know historically most laid-off workers do not enroll in coverage for which they qualify,” said Stan Dorn, director of the National Center for Coverage Innovation and senior fellow at Families USA. “It’s just overwhelming to be grappling with job loss and therefore it becomes imperative to make enrollment as easy, seamless and automatic as possible.”

Dorn was among several panelists who spoke during a May 18 webinar about automatic health insurance enrollment, hosted by the USC-Brookings Schaeffer Initiative for Health Policy and the American Enterprise Institute. Current crisis aside, Dorn said he advocates helping eligible uninsured individuals sign up for coverage when they’re filing their tax returns.

Christen Linke Young, a fellow at the USC-Brookings Schaeffer Initiative for Health Policy, said that “retroactive enrollment” is the best option. A federal “backstop” program would pay all claims for uninsured people when they receive care, but when filing taxes they would be responsible for paying income-adjusted premiums for the “plan” they used. “It’s the path toward universal coverage that is in my view most feasible,” she said.

Other panelists advocated for a more state-driven approach. One way to accomplish that would be for the federal government to create an incentive program that grants states new tools and authorities to build automatic enrollment programs, according to James Capretta, a visiting fellow at the American Enterprise Institute and senior fellow at the Ethics and Public Policy Center.

During the current pandemic-related economic downturn, one solution could be for states to move people who have lost their employer-based coverage to a comparable Affordable Care Act marketplace plan, suggested Lanhee Chen, a David and Diane Steffy fellow in American public policy studies at the Hoover Institution. “I think certainly that would be a more affordable route than, for example, subsidizing COBRA continuation coverage,” he said.

As States Relax COVID Restrictions, Insurers Set Up Return-to-Office Plans

May 19, 2020

With some states starting to relax shelter-in-place orders meant to slow the spread of COVID-19, health insurance companies are among the many businesses deciding when and how to transition some employees back to the office. However, companies that shared their plans point out that how their workplaces look and operate won’t be the same as before.

Mary Anne Jones, chief financial officer and vice president of operations at Priority Health, says it’s become apparent that “we’re going to have new normals that are going to extend out into the longer term.” For example, “we likely will have a lot more employees working from home as part of their normal work than we did before,” she says.

By Leslie Small

With some states starting to relax shelter-in-place orders meant to slow the spread of COVID-19, health insurance companies are among the many businesses deciding when and how to transition some employees back to the office. However, companies that shared their plans point out that how their workplaces look and operate won’t be the same as before.

Mary Anne Jones, chief financial officer and vice president of operations at Priority Health, says it’s become apparent that “we’re going to have new normals that are going to extend out into the longer term.” For example, “we likely will have a lot more employees working from home as part of their normal work than we did before,” she says.

The Michigan-based insurer moved almost all of its 1,500 employees to remote-work status as the novel coronavirus sparked mass shutdowns throughout the country. Now, as Michigan is beginning to allow some businesses to open back up, Priority Health is “gearing up our plan for a very measured and moderate return to the workplace,” Jones says. The insurer left it up to managers and their teams to determine who would benefit most from working from the office, according to Jones.

When its own facilities reopen, Humana Inc. “will have social distancing measures in place, such as new desk configurations and revised policies on elevator and stairwell use,” a spokesperson tells AIS Health in a statement. And, while approximately 40% of the insurer’s employees worked from home before the COVID-19 crisis, “we’re also considering expanding work-at-home options, given the success we’re having right now with so many of our employees who have shifted to working at home.”

Blue Shield of California appears to be rethinking its post-crisis approach to remote work. “The degree of ‘teleworking’ now underway is proving and dispelling myths about productivity and driving companies to adopt a truly remote and digitized workforce. As we go forward, remote work could stick in some industries but which jobs and who is eligible for these kinds of ongoing arrangements should be re-examined,” Mary O’Hara, chief human resources officer at the insurer, wrote in an internal document shared with AIS Health.

Telehealth Surges During COVID-19, Yet Regulations and Reimbursement Questions Linger

May 14, 2020

Although use of telehealth services has surged in recent months, experts say that the permanence of a shift to virtual care is far from certain, unless regulations and the industry’s reimbursement model change dramatically.

Emergency measures adopted by the Trump administration and states have allowed telehealth providers to significantly scale up in recent weeks. Anecdotal evidence and claims data released by payers indicates that telehealth utilization has spiked in turn. However, the authors of a recent paper from the Brookings Institution and the John Locke Society say those regulatory changes need to become permanent for the boost in utilization to increase.

By Peter Johnson

Although use of telehealth services has surged in recent months, experts say that the permanence of a shift to virtual care is far from certain, unless regulations and the industry’s reimbursement model change dramatically.

Emergency measures adopted by the Trump administration and states have allowed telehealth providers to significantly scale up in recent weeks. Anecdotal evidence and claims data released by payers indicates that telehealth utilization has spiked in turn. However, the authors of a recent paper from the Brookings Institution and the John Locke Society say those regulatory changes need to become permanent for the boost in utilization to increase.

“Until recently, telehealth use has largely been limited, stifled by the ambiguous and often changing regulations on the reimbursement of doctors and licensure, especially across state lines,” the authors wrote.

While states have loosened the rules during the COVID-19 pandemic, in normal times it’s illegal for a provider in one state to administer care to a patient in another. That creates an obvious challenge for telehealth platforms. Bradley Younggren, M.D., the chief medical officer of 98point6, says that managing state licensing demands a significant outlay for his company.

Many telehealth-exclusive providers pitch their services as a lower-cost alternative to traditional care. However, as more primary care physicians (PCPs) have been forced to enter the telehealth business as a result of COVID-19, it’s reignited a debate over how to set reimbursement.

According to the Brookings paper, in many states, providers are required by law to bill telehealth claims at the same rate as an in-office visit. “The main problem with payment parity laws is that they are contradictory to telehealth’s cost-effectiveness. If telehealth can help reduce costs of using the health-care system and reduce doctor visits, it is contradictory to mandate that a service provided through telehealth be paid for at the same rate as if it were provided in a doctor’s office,” the paper’s authors write.

Eliminating parity is not popular among traditional providers, whose business model is under extreme duress because of the pandemic.

COVID-19 May Drive More Insurers Into ACA Exchanges

May 13, 2020

As the impact of the COVID-19 pandemic continues to reverberate throughout the U.S. economy, it’s become clear that there will be a major enrollment shift away from employer-sponsored plans and into Medicaid and the individual market.

In fact, one recent analysis suggested that there could be “unprecedented growth” in the individual health insurance market. “The impact of COVID-19-related job losses will likely more than double the current enrollment in Individual & Marketplace plans, with the potential for the Individual market to triple in size to over 35 million in a sustained and severe economic contraction,” stated the analysis from A2 Strategy Group.

By Leslie Small

As the impact of the COVID-19 pandemic continues to reverberate throughout the U.S. economy, it’s become clear that there will be a major enrollment shift away from employer-sponsored plans and into Medicaid and the individual market.

In fact, one recent analysis suggested that there could be “unprecedented growth” in the individual health insurance market. “The impact of COVID-19-related job losses will likely more than double the current enrollment in Individual & Marketplace plans, with the potential for the Individual market to triple in size to over 35 million in a sustained and severe economic contraction,” stated the analysis from A2 Strategy Group.

Such growth, the report said, “will come from newly unemployed individuals in all states who exceed Medicaid eligibility thresholds” because of money they receive from the Coronavirus Aid, Relief, and Economic Security Act. And in states that haven’t expanded Medicaid, nearly all of the newly unemployed who earn below 100% of the federal poverty level could qualify for Affordable Care Act premium subsidies.

Another analysis from the Urban Institute and Robert Wood Johnson Foundation (RWJF), estimated that if U.S. unemployment reaches 20%, 25 million people would lose employer-sponsored health insurance. “Of these, 11.8 million would gain Medicaid coverage, 6.2 million would gain marketplace or other private coverage, and 7.3 million would become uninsured,” it stated.

Katherine Hempstead, the senior adviser to the executive vice president at RWJF, says it’s possible the coming enrollment shifts will cause some health insurers to re-evaluate their level of participation in the ACA exchanges, which some large insurers left in 2017 and 2018 before the market stabilized.

In fact, Maryland Gov. Larry Hogan (R) said on May 12 that UnitedHealth filed to offer plans on the sate’s ACA exchange in 2021, bringing the total number of insurers in that market from two to three.

Ari Gottlieb, a principal at A2 Strategy Group, says the effect may be even stronger after 2021.

“If the market doubles to 25 or 30 million, some of that will probably fall off, but some of that will probably stay,” he says. “I think even a year or two from now, we’re going to have a bigger individual market than we had before.”

CVS Sees COVID Testing Sites as Part of Bigger HealthHUB Strategy

May 12, 2020

Since acquiring Aetna, CVS Health Corp. has touted its HealthHUB stores — which include expanded clinics, labs for health screening and space for wellness pursuits — as the linchpin of its plan to stand out among other large, diversified firms that include a health insurer. Yet as one analyst pointed out during CVS’s first-quarter 2020 earnings call on May 6, that strategy could face new challenges amid the COVID-19 pandemic when many people are reluctant to venture outside their homes.

CVS executives said that while the company is indeed seeing less foot traffic at its brick-and-mortar locations, it is still leveraging the power of having a vast retail footprint by offering testing for the new coronavirus.

By Leslie Small

Since acquiring Aetna, CVS Health Corp. has touted its HealthHUB stores — which include expanded clinics, labs for health screening and space for wellness pursuits — as the linchpin of its plan to stand out among other large, diversified firms that include a health insurer. Yet as one analyst pointed out during CVS’s first-quarter 2020 earnings call on May 6, that strategy could face new challenges amid the COVID-19 pandemic when many people are reluctant to venture outside their homes.

CVS executives said that while the company is indeed seeing less foot traffic at its brick-and-mortar locations, it is still leveraging the power of having a vast retail footprint by offering testing for the new coronavirus.

The firm teamed up with federal, state and local governments to open “large-scale diagnostic testing sites across five states,” according to a slide deck that accompanied CVS’s earnings presentation. As of May 4, the company had administered nearly 90,000 tests, and it is planning to establish additional testing sites.

As CEO Larry Merlo put it: “We’re focused on COVID testing today, but there is a broader universe of diagnostics and monitoring that we see becoming an important part of our HealthHUB strategy.”

Merlo also pointed out that virtual visits through the company’s MinuteClinic platform rose 600% in the first three months of 2020 compared with the prior-year quarter. Retail prescription home delivery increased more than 1,000% and specialty pharmacy digital refills jumped about 50%.

The effects of the COVID-19 crisis weren’t all rosy, however. Jonathan Roberts, CVS’s executive vice president and chief operating officer, acknowledged that “the biggest headwind we’re seeing now in pharmacy is really around new therapy starts.” Because doctor visits have decreased significantly, CVS saw at least a 25% dip in new prescriptions in April compared with the same month in 2019, whereas it normally sees about 7% growth.

Overall in the quarter, CVS recorded adjusted earnings per share (EPS) of $1.91, “well above” the Wall Street consensus of $1.62, as Citi analyst Ralph Giacobbe highlighted in a May 6 investor note. Total revenues increased 8.3% in the first quarter of 2020 compared with the prior-year quarter.