Health Plan Weekly

How May Health Insurer Fee’s 2020 Return Impact Insurers?

May 22, 2019

As insurers spend the next several weeks finishing 2020 bids for Medicare Advantage (MA) and Part D as well as Affordable Care Act exchanges, their concerns center on the expected return of the ACA’s health insurer fee (HIF) in 2020.

Industry experts tell AIS Health that the HIF’s return alone wouldn’t be significant for most managed care companies, since plans pass the fee through to consumers via higher premium rates — though they concede this pass-through may not be possible in the competitive MA market.

By Judy Packer-Tursman

As insurers spend the next several weeks finishing 2020 bids for Medicare Advantage (MA) and Part D as well as Affordable Care Act exchanges, their concerns center on the expected return of the ACA’s health insurer fee (HIF) in 2020.

Industry experts tell AIS Health that the HIF’s return alone wouldn’t be significant for most managed care companies, since plans pass the fee through to consumers via higher premium rates — though they concede this pass-through may not be possible in the competitive MA market.

“I would say that the concerns are more about, will it [i.e., the HIF] actually return or not. It’s noticeable, it’s [going to account for] 1% to 2% [of premium increase], maybe 3% of premiums in the worst case…but it’s not going to be the biggest driver of your premium growth,” says Jason Karcher, an actuary in the Milwaukee office of Milliman, Inc.

To Ross Weiler, a principal with Day Health Strategies LLC, the HIF is more of a market issue. “It’s just one more pricing challenge for the market which will result in some people being unable to afford coverage,” he says.

The bottom line? “You’re going to have winners and losers,” Weiler says. “An employer who can successfully move to self-funding fares better [since the HIF won’t apply], but that leaves the insured risk pool a little worse….So you’ve got market dynamic changes that by themselves are not dramatic, but you add them up” — and it could cause cost-prohibitive premiums.

Milliman expects the HIF to reach roughly $15.5 billion in 2020, Karcher says.

Maryland Gov. Signs Law to Help Uninsured via Tax Return

May 21, 2019

Maryland recently became the first state in the nation to try to guide uninsured low-income residents into Medicaid or a subsidized Affordable Care Act (ACA) exchange plan via their tax returns. The state anticipates launching the program in January 2020 and will make itself available as a resource for other states that have “taken an interest in Maryland’s approach and are eager to see the results,” a state official tells AIS Health.

By Judy Packer-Tursman

Maryland recently became the first state in the nation to try to guide uninsured low-income residents into Medicaid or a subsidized Affordable Care Act (ACA) exchange plan via their tax returns. The state anticipates launching the program in January 2020 and will make itself available as a resource for other states that have “taken an interest in Maryland’s approach and are eager to see the results,” a state official tells AIS Health.

Statewide, Maryland Health Benefit Exchange estimates 50,000-odd Marylanders “would be eligible for essentially premium-free coverage,” says Betsy Plunkett, MHBE’s director of marketing and web strategies.

“Simply put, more pathways to coverage is a good thing,” says CEO Meg Murray of the Association for Community Affiliated Plans. “The devil will be in the operational details; it always is. But it’s a novel, promising idea and we look forward to seeing the results.”

In a May 13 Health Affairs blog, Stan Dorn, a senior fellow at Families USA, notes that national health policy debates are failing to address a basic problem that continues to loom large: how to enroll the eligible uninsured into available coverage.

Maryland’s program “represents the country’s first attempt to use income tax filing as an immediate on-ramp to health coverage,” he says.

As Dorn explains it, uninsured tax filers in Maryland will be able to check a box on their state income tax return asking the state to determine their eligibility for free or low-cost insurance. MHBE will determine their eligibility for Medicaid, the Children’s Health Insurance Program and premium tax credits.

Centene CEO Tops List of Highest-Paid Publicly Traded Health Insurers’ Executives in 2018

May 20, 2019

Centene Corp. CEO Michael Neidorff was the top-paid publicly traded health insurer CEO in 2018, easily winning the No. 1 slot for the fifth year in a row with total compensation of $26.12 million.

Cigna Corp. CEO David Cordani came in second place for total CEO compensation in 2018, with earnings of $18.94 million, an increase of 7.7%. UnitedHealth Group CEO David Wichmann was in third place, with total compensation of $18.11 million, a 4.1% increase from 2017.

By Jane Anderson

Centene Corp. CEO Michael Neidorff was the top-paid publicly traded health insurer CEO in 2018, easily winning the No. 1 slot for the fifth year in a row with total compensation of $26.12 million.

Cigna Corp. CEO David Cordani came in second place for total CEO compensation in 2018, with earnings of $18.94 million, an increase of 7.7%. UnitedHealth Group CEO David Wichmann was in third place, with total compensation of $18.11 million, a 4.1% increase from 2017.

Humana Inc. CEO Bruce Broussard came in fourth, with $16.31 million in compensation, a 17.4% drop from 2017. Molina Healthcare, Inc. CEO Joseph Zubretsky was fifth, with total compensation of $15.22 million in 2018, a 22.9% decrease from 2017.

Rachel Grof, director, rewards at Willis Towers Watson in Boston, tells AIS Health that health plan boards are considering more than just stock performance when structuring compensation.

In addition, the human resources and compensation committees of company boards are focusing more on such topics as inclusion/diversity, pay equity and transparency within their organizations, Grof says.

Based on the data from the proxy statements, Grof says that organizations continue to use equity and other awards for newly hired or promoted executives. However, she says, “organizations have been somewhat cautious and tactical with compensation increases. They’re no longer using ‘peanut butter’ type of approaches — they’re trying to differentiate more and more based on performance, skills and criticality.”

Health Plans Take Proactive Approaches to Confront U.S. Measles Outbreak

May 14, 2019

Confronting the worst measles outbreak in the U.S. in a quarter century, some health care organizations are taking innovative steps.

As part of its containment effort, CDC is urging people who know they received an earlier formulation of measles vaccine that was given to fewer than 1 million people between 1963 and 1968 and is no longer used to talk to their doctor about getting revaccinated with the current, live measles-mumps-rubella (MMR) vaccine.

By Judy Packer-Tursman

Confronting the worst measles outbreak in the U.S. in a quarter century, some health care organizations are taking innovative steps.

As part of its containment effort, CDC is urging people who know they received an earlier formulation of measles vaccine that was given to fewer than 1 million people between 1963 and 1968 and is no longer used to talk to their doctor about getting revaccinated with the current, live measles-mumps-rubella (MMR) vaccine.

Most insurers seem to be engaging in generalized outreach to members, though Priority Health tells AIS Health that concern about some people getting the ineffective measles vaccine in the 1960s prompted its recent communication efforts.

Priority Health has sent “proactive communications and recommendations throughout our network, including providing information to our provider network and partners, and our sales teams to inform our commercial clients,” Priority Health spokesperson Aaron Miller says. The thrust of Priority Health’s communications is ensuring that members know the MMR vaccine is covered at no cost for most of them when they get the shot from an in-network provider, he says.

Horizon Blue Cross Blue Shield of New Jersey recently posted a “measles alert” on its home page, “and we are about to amplify the messaging and content through our social media channels,” spokesperson Thomas Vincz said May 8.

On April 29, CareFirst BlueCross BlueShield in Maryland put out a reminder that members in its Maryland, northern Virginia and Washington, D.C., service area may obtain a measles vaccine at no cost from their in-network primary care provider.

Molina, Cigna and CVS Health Report Solid First-Quarter Earnings

May 9, 2019

Several major publicly traded managed care companies, including some newly merged combinations, reported solid first-quarter 2019 earnings. Medicare for All, a health system overhaul being urged by many congressional Democrats, didn’t overshadow their earnings calls as it arguably did for harbinger UnitedHealth Group, which reported strong quarterly results in mid-April.

President and CEO Joe Zubretsky noted during Molina Healthcare, Inc.’s April 29 earnings call that there obviously are various proposals at the state and federal level “for public option, single-payer Medicare for All-type arrangements.” But Molina considers “most of these positions to be political rhetoric” still in the discussion phase.

By Judy Packer-Tursman

Several major publicly traded managed care companies, including some newly merged combinations, reported solid first-quarter 2019 earnings. Medicare for All, a health system overhaul being urged by many congressional Democrats, didn’t overshadow their earnings calls as it arguably did for harbinger UnitedHealth Group, which reported strong quarterly results in mid-April.

President and CEO Joe Zubretsky noted during Molina Healthcare, Inc.’s April 29 earnings call that there obviously are various proposals at the state and federal level “for public option, single-payer Medicare for All-type arrangements.” But Molina considers “most of these positions to be political rhetoric” still in the discussion phase.

Zubretsky focused on the impact of Molina’s corporate restructuring efforts, saying first-quarter results seem to validate that durable financial and operational improvements will allow the company to sustain attractive margins built in 2018, “all while we begin to grow the top line again.” For the three months ended March 31, Molina reported premium revenue of $4 billion, down 9% year over year, in line with the company’s expectations.

Molina raised its full-year 2019 earnings guidance, and Wall Street analysts by and large view the company as poised for growth.

This was Cigna Corp.’s first quarter reporting as a combined company following its acquisition of Express Scripts. Cigna President and CEO David Cordani said the company remains on track to deliver “attractive growth” in 2019 and beyond.

CVS Health Corp. beat first quarter expectations and raised its full-year outlook. Chief executive Larry Merlo described CVS Health’s first full quarter as a combined company as “a success on many fronts” following its acquisition of Aetna Inc.