Preview: Health Plan Weekly

Supreme Court Upholds ACA, Removing ‘Cloud’ for Insurers

With Chart: California v. Texas: A Look Back

June 18, 2021

In a move applauded by health insurers that increasingly view the Affordable Care Act exchanges as an attractive market, the Supreme Court on June 17 ruled 7-2 to uphold the ACA in the latest in a string of high-profile legal challenges.

The case, California v. Texas, hinged on whether the ACA’s individual mandate was still constitutional after Congress in 2017 changed the tax penalty to $0 for those refusing to purchase health insurance. And if the mandate is unconstitutional, a coalition of red states argued, the rest of the law is as well because the ACA’s architects intended for that provision to be “inseverable” from the rest of the statute.

In a move applauded by health insurers that increasingly view the Affordable Care Act exchanges as an attractive market, the Supreme Court on June 17 ruled 7-2 to uphold the ACA in the latest in a string of high-profile legal challenges.

The case, California v. Texas, hinged on whether the ACA’s individual mandate was still constitutional after Congress in 2017 changed the tax penalty to $0 for those refusing to purchase health insurance. And if the mandate is unconstitutional, a coalition of red states argued, the rest of the law is as well because the ACA’s architects intended for that provision to be “inseverable” from the rest of the statute.

U.S. District Court Judge Reed O’Connor agreed with that argument, ruling in December 2018 that the whole ACA should fall. In a December 2019 decision, the Fifth Circuit Court of Appeals partially agreed, saying the mandate is now unconstitutional. A coalition of blue states defending the law, led by California, then appealed to the Supreme Court, which agreed to take the case and heard oral arguments in November 2020.

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Humana Moves Further Into Home Care With New Acquisition

June 18, 2021

In the latest in a series of purchases in home care, Humana Inc. said on June 14 it will acquire Onehome from private equity firm WayPoint Capital Partners. Experts say the Medicare Advantage-focused carrier is leveraging its substantial cash reserves to differentiate itself in the burgeoning MA market and create synergies and efficiencies in remote care settings. Terms of the deal were not disclosed.

The move is driven partly by the changes to care delivery caused by the pandemic, experts say, but also aligns with a long-running Humana strategy. The pandemic has accelerated the adoption of home care, remote monitoring and virtual care. Regulatory changes, spurred by the need to deliver care away from traditional clinical settings during the worst spikes of COVID-19 infection, have made those systems more viable than they were before, despite the long-held ambitions of payers.

In the latest in a series of purchases in home care, Humana Inc. said on June 14 it will acquire Onehome from private equity firm WayPoint Capital Partners. Experts say the Medicare Advantage-focused carrier is leveraging its substantial cash reserves to differentiate itself in the burgeoning MA market and create synergies and efficiencies in remote care settings. Terms of the deal were not disclosed.

The move is driven partly by the changes to care delivery caused by the pandemic, experts say, but also aligns with a long-running Humana strategy. The pandemic has accelerated the adoption of home care, remote monitoring and virtual care. Regulatory changes, spurred by the need to deliver care away from traditional clinical settings during the worst spikes of COVID-19 infection, have made those systems more viable than they were before, despite the long-held ambitions of payers.

In turn, plan members became more fluent in and receptive to such offerings, which usually come with a large dose of web-driven technology. For MA-focused plans like Humana, whose elder members were obliged to become more tech savvy while isolating at home, adoption at the current pace was unimaginable before 2020. Humana has gone on a spending spree as a result of these dynamics. In April, the firm exercised an option to fully acquire another home health provider, Kindred at Home, in which it previously held a 40% stake.

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Insurers’ Underwriting Gains Jumped by 77% in 2020

June 18, 2021

Health plans enjoyed record results in 2020, according to a June 11 report from A.M. Best. The report concludes that the high earnings were driven by the pandemic-driven drop in health care utilization and bolstered by the industry’s “highest level of net premiums written (NPW), with all lines of business reporting premium growth, including commercial business.”

In 2020, carriers took in $41.6 billion in underwriting gains — 77% more than they did in 2019, when they took in $23.5 billion, per the report. The gains in 2020 were found mainly in the second quarter, when utilization plummeted as the result of stay-at-home orders, care deferrals and a sector-wide move to virtual care — a story borne out in other retrospectives of the 2020 claims environment.

Health plans enjoyed record results in 2020, according to a June 11 report from A.M. Best. The report concludes that the high earnings were driven by the pandemic-driven drop in health care utilization and bolstered by the industry’s “highest level of net premiums written (NPW), with all lines of business reporting premium growth, including commercial business.”

In 2020, carriers took in $41.6 billion in underwriting gains — 77% more than they did in 2019, when they took in $23.5 billion, per the report. The gains in 2020 were found mainly in the second quarter, when utilization plummeted as the result of stay-at-home orders, care deferrals and a sector-wide move to virtual care — a story borne out in other retrospectives of the 2020 claims environment.

While COVID-19 did introduce new costs, the A.M. Best report observes that “the decline in claims for non-COVID conditions helped offset the impact of COVID treatment and testing claims. The majority of individuals diagnosed with COVID were not hospitalized, but instead isolated at home, which resulted in relatively modest claims costs.”

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Execs Discuss How Pandemic Shaped Consumer Engagement

June 18, 2021

Of all the changes that the COVID-19 pandemic has made to the health care system, one of the most lasting might be the manner in which it has forced organizations of all types to rethink how they engage with consumers.

At Anthem, Inc., for example, the pandemic helped accelerate executives’ efforts to streamline how individuals interact with the health care system, Anthem Chief Clinical Officer Anthony Nguyen, M.D., said during a June 9 panel discussion, titled “What Consumer Engagement Means Today,” during the World Health Care Congress Virtual conference. AIS Health moderated the session.

Of all the changes that the COVID-19 pandemic has made to the health care system, one of the most lasting might be the manner in which it has forced organizations of all types to rethink how they engage with consumers.

At Anthem, Inc., for example, the pandemic helped accelerate executives’ efforts to streamline how individuals interact with the health care system, Anthem Chief Clinical Officer Anthony Nguyen, M.D., said during a June 9 panel discussion, titled “What Consumer Engagement Means Today,” during the World Health Care Congress Virtual conference. AIS Health moderated the session.

“What we want to do, especially during COVID, is make health care easier to navigate,” Nguyen said. “For instance, virtual care — yes, a lot of people used it, but then I challenged my company and our team [to examine] how many people did not get a virtual care visit because they found it too complicated. How many clicks do you actually have to go through to even get there?”

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News Briefs

June 18, 2021

The combined organization created by a merger between Tufts Health Plan and Harvard Pilgrim Health Care will now be known as Point32Health. “Inspired by the 32 points on a compass, Point32Health represents the role the organization plays in guiding and empowering its members and making a meaningful impact across the health care industry,” per a press release. The parent company of the combined organization will be headquartered in Canton, Mass.

The combined organization created by a merger between Tufts Health Plan and Harvard Pilgrim Health Care will now be known as Point32Health. “Inspired by the 32 points on a compass, Point32Health represents the role the organization plays in guiding and empowering its members and making a meaningful impact across the health care industry,” per a press release. The parent company of the combined organization will be headquartered in Canton, Mass.

More than 1.2 million people signed up for health insurance through HealthCare.gov between Feb. 15 and May 31, according to CMS. By comparison, 501,000 people signed up for coverage in 2020 in the same period of time and 359,000 did in 2019. The increased signups are possible because of a pandemic-related special en-rollment period that applies to all consumers — not just those with qualifying life events — and increased uptake is also likely due to more generous premium subsidies included in the American Rescue Plan Act.

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