Health Plan Weekly

2019 Outlook: Employers to Push Insurers for More Value, Innovation

January 17, 2019

In the year ahead, employer clients will be expecting a lot from their health benefit plans, including a stronger focus on behavioral health, creative uses of data and technology, and a greater emphasis on high-performing, industry experts say.

“If I was sitting on the insurer side and I was wondering what I was going to hear from my employers this year, I would be prepared to sharpen pencils or to least expect a little more competition, a little more RFP action, a little bit more pushback,” says Suzanne Taranto, a principal and consulting actuary for Milliman, Inc.

By Leslie Small

In the year ahead, employer clients will be expecting a lot from their health benefit plans, including a stronger focus on behavioral health, creative uses of data and technology, and a greater emphasis on high-performing, industry experts say.

“If I was sitting on the insurer side and I was wondering what I was going to hear from my employers this year, I would be prepared to sharpen pencils or to least expect a little more competition, a little more RFP action, a little bit more pushback,” says Suzanne Taranto, a principal and consulting actuary for Milliman, Inc.

Among the health benefit trends and themes that employers are focused on:

✦ Behavioral health.

“For so long, behavioral health has been a secondary thought, and I think that employers large and small are realizing that this is such an important area where the system is truly, truly broken,” says Renya Spak, who leads Mercer’s Center for Health Innovation. To fix it, employers are looking for “true innovation,” whether that means partnering with startups or pushing their existing partners to operate differently.

✦ High-performing provider networks.

Taranto says employers are increasingly concerned about whether they’re sending employees to the lowest-cost, highest-quality providers. Thus, they’re interested in steering employees to Centers of Excellence for episodes of care like cancer treatment and knee, hip and back surgery, she says.

✦ Social determinants of health.

“In the commercial market, I am seeing a much greater interest in addressing the social determinants of health,” Sandeep Wadhwa, M.D., tells AIS Health via email. “…I now see an increased focus on the needs of lower wage workers where the last week of the month, for example, may lead to trade-offs between medications, food, or transportation,” adds Wadhwa, former Colorado Medicaid director and now chief health officer and senior vice president of government programs and market innovation at Solera Health.

✦ Artificial intelligence.

In the employee benefits space in 2019, “it is all about AI,” Spak says. In part, that’s because there are many new tools focused on AI-powered triage — in which users enter their symptoms and answer questions, and are then given advice about, for example, whether to simply rest a sore ankle or see a doctor.

Medicaid Plans Face Busy Year of Procurements, Waivers

January 15, 2019

From a flurry of state Medicaid managed care procurements and Section 1115 waiver activity to more states heading toward Medicaid expansion under the Affordable Care Act (ACA), Medicaid plans face a busy year ahead, experts tell AIS Health. They also cite more business opportunities for plans to better integrate people dually eligible for Medicare and Medicaid, and to address social determinants of health such as housing, transportation and nutritional needs.

By Judy Packer-Tursman

From a flurry of state Medicaid managed care procurements and Section 1115 waiver activity to more states heading toward Medicaid expansion under the Affordable Care Act (ACA), Medicaid plans face a busy year ahead, experts tell AIS Health. They also cite more business opportunities for plans to better integrate people dually eligible for Medicare and Medicaid, and to address social determinants of health such as housing, transportation and nutritional needs.

“There’s going to be a great deal to watch in the Medicaid managed care space in 2019,” says CEO Meg Murray of the Association for Community Affiliated Plans (ACAP). First is Medicaid expansion, with voters in three states last November electing to expand the program, and voters in two other states replacing governors who either obstructed or rolled back expansion efforts.

Rising drug costs also will be a significant issue, she says. “Just today [Jan. 10], California just moved all its Medicaid managed care plans to a state formulary,” she says. “It’s California, so other states will sit up and pay attention. Given that Medicaid managed care plans’ pharmacy management efforts have yielded large-scale savings in the past, it’s questionable whether a state formulary is the best pathway to containing cost growth.”

Other experts cite states’ activities on Medicaid managed care contracting. “We’re entering into a ‘warm’ bid year where you have perhaps Georgia open for RFP, North Carolina will close its RFP, Minnesota will presumably open an RFP as well as Kentucky [and] perhaps Ohio,” says Alex Shekhdar, vice president of policy at Medicaid Health Plans of America. MHPA represents 93 commercial and non-profit plans that serve more than 25 million lives in 39 states and the District of Columbia.

Sandeep Wadhwa, M.D., chief health officer and senior vice president of government programs and market innovation at Solera Health and a former Colorado Medicaid director, also cites significant procurement activity. “On the Medicaid side, to me there’s so much focus on the states dropping RFPs — Louisiana, Minnesota, Hawaii — and I think those are the ‘North Carolinas’ of 2019,” he says.

“In 2018, there was so much focus on North Carolina moving from ASO [administrative services only] to a capitated model,” Wadhwa explains. This year, “the interest is in what the states dropping RFPs are looking for in terms of innovation, population health programs and social determinants of health, and how the managed care plans respond….I think states are really looking for the plans to include in their bids a broader set of interventions.”

2019 Outlook: Experts See a Stable Individual Insurance Market

January 9, 2019

Even amid factors like loosened rules for skimpy health plans and a court ruling that the Affordable Care Act is unconstitutional, experts expect the individual insurance marketplaces to remain on solid footing in 2019 as insurers integrate their latest batch of enrollees and finalize plans for next year.

“We think the underlying marketplace has stabilized,” with both insurers and consumers now comfortable with how it works, Standard & Poor’s analyst Deep Banerjee says, adding that “we would expect the same for 2020.”

By Leslie Small

Even amid factors like loosened rules for skimpy health plans and a court ruling that the Affordable Care Act is unconstitutional, experts expect the individual insurance marketplaces to remain on solid footing in 2019 as insurers integrate their latest batch of enrollees and finalize plans for next year.

“We think the underlying marketplace has stabilized,” with both insurers and consumers now comfortable with how it works, Standard & Poor’s analyst Deep Banerjee says, adding that “we would expect the same for 2020.”

Still, there are various legal and regulatory factors that might affect the individual market this year and how insurers start thinking about 2020 and beyond. Here’s how industry experts assessed their impact of some of them:

The expansion of short-term, limited-duration health plans and association health plans (AHPs).

In 2018, the Trump administration finalized rules aimed at expanding both types of non-ACA-compliant plans, sparking worries that they’d weaken the ACA marketplaces by siphoning off healthier consumers. While there was a dip in HealthCare.gov enrollment in 2019, it’s not clear how much of that decline was due to people opting for short-term plans or AHPs, says Katherine Hempstead of the Robert Wood Johnson Foundation.

Banerjee says he expects more insurers to start selling short-term plans in 2020. “If you’re an insurer, you’re kind of hedging against the fact that you may lose some of your healthier population from the individual market to the short-term plans, so you want to have your own short-term plan so that the healthy individual at least stays with you and doesn’t go to another insurance company,” he explains.

The repeal of the individual mandate penalty.

The Tax Cuts and Jobs Act repealed the ACA’s tax penalty on those who forgo health insurance — a provision that becomes effective in 2019.

The mandate penalty’s disappearance “was assumed to be a factor” in the 2019 HealthCare.gov enrollment dip, says Kev Coleman, founder and president of AssociationHealthPlans.com. That said, “it is worthwhile to note that the state of New Jersey’s enrollment was down despite re-instituting the individual mandate at the state-level and also heavily promoting the annual enrollment period.”

Banerjee says repealing the penalty is indeed “a negative” for the exchanges, but he adds that “the market is not going to fall off a cliff because the mandate is going away, and that’s really because the mandate never really worked well.”

New State Laws Require More Preventive Services From Insurers

January 8, 2019

A bevy of new state laws pertaining to health insurers took effect Jan. 1. It all adds up to a year of potentially higher costs for plans, with some states entering 2019 by protecting various Affordable Care Act (ACA) provisions by statute — and even more of them eying how to take advantage of the ACA’s state innovation waivers as the year progresses.

By Judy Packer-Tursman

A bevy of new state laws pertaining to health insurers took effect Jan. 1. It all adds up to a year of potentially higher costs for plans, with some states entering 2019 by protecting various Affordable Care Act (ACA) provisions by statute — and even more of them eying how to take advantage of the ACA’s state innovation waivers as the year progresses.

✦ In Minnesota, its statute now permits “certified reinsurers” not licensed in that state to work in the state if they meet certain bookkeeping and financial strength requirements. Another new law in Minnesota sets up a step therapy override process, under which a health plan enrollee and prescribing health care provider can override an insurer’s step therapy protocol.

✦ In New York, a law effective Jan. 1 requires health insurers to provide men with access to prostate cancer screening without copays or deductibles. The law also requires plans to make consumers aware of the new benefit.

✦ In Louisiana, a new law requires plans to cover follow-up preventive cancer screenings on at least an annual basis after a woman who has had a bilateral mastectomy following a breast cancer diagnosis finishes her active treatment.

✦ In Illinois, a law effective Jan. 1 requires insurers to provide “coverage for medically necessary expenses for standard fertility preservation services when a necessary medical treatment may directly or indirectly cause iatrogenic infertility to an enrollee.”

✦ In New Jersey, a new law called the Health Insurance Market Preservation Act creates a tax to encourage residents to buy insurance.

State innovation waivers under the ACA are likely to be a hot topic among state lawmakers this year, says Richard Cauchi at the National Conference of State Legislatures. In its upcoming legislative session, Wyoming is likely to become the first state this year to move forward on a federal application for a reinsurance program through the Section 1332 waiver, he notes.

In the first two years such waivers were allowed, 20 states enacted laws as the first step, Cauchi notes. Yet, as of Jan. 1, 2019, “just eight states have received HHS approval — with seven of those establishing state reinsurance programs that allow use of some federal and state funds resulting in some lower premiums for policies sold through exchanges.”

Meanwhile, seven other states have enacted legislation to apply for a reinsurance waiver, but their requests have not yet been filed or approved.

North Carolina Blues Product May Save Money, but Holds Major Pitfalls for Members

January 3, 2019

A new individual and small-group product from Blue Cross and Blue Shield of North Carolina — which reimburses members directly for care at 140% of Medicare rates — could be one answer to the problem of how to hold policy costs down, some analysts say. But others warn that members may be unprepared for negotiating fees, especially for more complex care scenarios, and may be caught off guard by balance bills.

The product, offered for policy year 2019, is a non-Blues branded plan called myChoice with premiums that will be 33% lower, on average, for individual plans, the insurer says.

By Jane Anderson

A new individual and small-group product from Blue Cross and Blue Shield of North Carolina — which reimburses members directly for care at 140% of Medicare rates — could be one answer to the problem of how to hold policy costs down, some analysts say. But others warn that members may be unprepared for negotiating fees, especially for more complex care scenarios, and may be caught off guard by balance bills.

The product, offered for policy year 2019, is a non-Blues branded plan called myChoice with premiums that will be 33% lower, on average, for individual plans, the insurer says.

Under the plan’s rules, there are no restrictions on which providers a member can see, but the member — not the plan — is responsible for paying the provider. The insurer then will reimburse the member — not the provider — at up to 140% of Medicare rates, according to the North Carolina Blues plan. Members are responsible for any charges above 140% of Medicare rates, and balance billing does not count toward the plan’s deductible or out-of-pocket maximum.

This is “a new and untested approach,” says Mark Hall, professor of law and public health at Wake Forest University in Winston-Salem, N.C. “It is worth trying this approach, especially in areas where providers are reluctant to negotiate with health plans for substantial discounts. But it remains to be seen how well — or not — it will work,” he adds.

William DeMarco, founder and president of Pendulum HealthCare Development Corporation in Rockford, Ill., tells AIS Health, “for the consumer I see a lot of turmoil as fees go up even for the same doctor over time, so a lot of surprise bills will need to be dealt with. The insurer can blame the patient, and the doctor tells the patient if you do not like what he’s charging, go elsewhere.”

Joseph Paduda, principal at Health Strategy Associates, LLC., says that the patient education component of the plan will be critical for its success. “People are used to a standard type of health plan, and this puts a lot more responsibility on the patient to negotiate price and care. Some patients will be uncomfortable with this, and others will likely be surprised when they get a balance bill for much more than they expected.”