Daily Industry Report - April 3

Your summary of the Voluntary and Healthcare Industry’s most relevant and breaking news; brought to you by the Health & Voluntary Benefits Association®

Jake Velie, CPT
Vice Chairman, President & COO
Health & Voluntary Benefits Association® (HVBA)
Daily Industry Report (DIR)

Robert S. Shestack, CCSS, CVBS, CFF
Chairman & CEO
Health & Voluntary Benefits Association® (HVBA)
Daily Industry Report (DIR)

ACA Plans Are Being Switched Without Enrollees’ OK

By Julie Appleby - Some consumers covered by Affordable Care Act insurance plans are being switched from one plan to another without their express permission, potentially leaving them unable to see their doctors or fill prescriptions. Some face large IRS bills for back taxes. Read Full Article…

VBA Article Summary

  1. Challenges in the Federal ACA Marketplace: Unauthorized Access and Plan-Switching: Unauthorized Enrollment and Plan-Switching Issues: An investigation by KFF Health News has highlighted a significant challenge within the Affordable Care Act (ACA) marketplace, particularly in the 32 states served by the federal platform. It reveals that rogue agents can easily access policyholder accounts with minimal information, facilitating unauthorized enrollment or plan-switching. This activity not only undermines the integrity of the marketplace but also poses serious concerns for consumers and ethical brokers alike, casting a shadow over a record year of ACA enrollment.

  2. Regulatory Response and Efforts to Combat Unauthorized Plan Changes: Federal Response and Regulatory Efforts: The Centers for Medicare & Medicaid Services (CMS) acknowledges the surge in unauthorized plan-switching incidents and outlines technical efforts to combat these practices. Despite new rules requiring brokers to obtain explicit consent before making account changes, the effectiveness of these measures and the imposition of additional safeguards remain uncertain. The situation is exacerbated by the ease with which personal information can be exploited, highlighting a pressing need for stronger regulatory and technological solutions.

  3. The Consumer Impact: Navigating Unauthorized Changes and Market Integrity: Consumer Impact and Market Dynamics: Consumers inadvertently caught in unauthorized plan changes face significant consequences, including unwanted policy shifts, potential tax liabilities, and disruptions in care continuity. This issue is not only a matter of inter-broker competition but also raises significant concerns about consumer protection and market integrity. While federal and state agencies work to address these challenges, the incidents underline the critical balance between facilitating enrollment access and safeguarding consumer information against misuse.

HVBA Poll Question - Please share your insights

What is your opinion on RWJBarnabas' decision to drop coverage for GPL-1 medications for weight loss among employees, as reported in the article referenced below?*

Login or Subscribe to participate in polls.

Our last poll results are in!


of Daily Industry Report readers who responded to our last polling question believe PBM practices like spread pricing and increasing hidden fees” is the primary factor contributing to the average 20% increase in pharmacy costs as a percentage of total medical spending for businesses. 

25.13% of respondents believe the primary factor for the increase in pharmacy costs is due to “higher utilization of specialty medications and a lack of resources for discounts on specialty medication,” 23.74% believe it’s due to “increased utilization of prescription drugs,” while 23.49% responded that “rising medication prices” is the main factor. 

Have a poll question you’d like to suggest? Let us know!

Senate investigating whether ER care has been harmed by growing role of private-equity firms

By Gretchen Morgenson - A Senate committee has asked three major private-equity firms for information on how they run or staff hospital emergency departments to see if private equity’s management of a large share of the nation’s ERs has harmed patients. Read Full Article…

VBA Article Summary

  1. Senate Inquiry into Private Equity's Impact on Healthcare: The Homeland Security and Governmental Affairs Committee, led by Chairman Sen. Gary Peters, D.-Mich., has initiated an inquiry into the practices of three major private-equity firms—Apollo Global Management, the Blackstone Group, and KKR—focusing on their impact on patient safety and care in emergency departments. This action follows interviews with over 40 emergency department physicians, revealing concerns over improper billing, retaliation, anti-competitive activities, and the prioritization of cost-saving measures at the expense of patient care.

  2. Scope and Responses to the Inquiry: The committee's investigation encompasses not only the three private-equity firms but also four companies they back, including three hospital staffing companies and a hospital operator, LifePoint Health. These entities have been asked to provide detailed documentation and arrange meetings with the committee. While some companies have expressed a willingness to engage transparently with the inquiry, others have declined to comment. The investigation seeks to address the broader effects of private equity's role in healthcare, noting significant investments across various sectors and the associated burden of debt and cost-cutting measures on healthcare services.

  3. Wider Context and Concerns: This inquiry comes amidst growing scrutiny of private-equity firms' influence in healthcare, marked by rising patient costs, lower care quality, and increased mortality rates in facilities owned by these firms. The investigation is part of a broader examination that includes a bipartisan effort by the Senate Budget Committee and action by the Federal Trade Commission against potential anti-competitive practices. The involvement of private equity in healthcare is portrayed as a threat to patient safety and emergency preparedness, prompting calls for greater transparency and accountability in how these firms operate within the healthcare sector.

Health Execs Applaud Biden’s Final Rule on ‘Junk’ Health Insurance

By Marissa Plescia - The American Medical Association, the Association for Community Affiliated Plans and several other organizations came out in support of the Biden administration’s new rule on short-term health plans. The rule limits the plans to shorter time periods and requires them to be clearer about what they do and do not cover. Read Full Article…

VBA Article Summary

  1. Broad Support and Purpose of the Final Rule: Several healthcare advocacy organizations, including the American Medical Association and the Association for Community Affiliated Plans, have expressed strong support for the White House's final rule aimed at regulating short-term health insurance plans, also referred to as "junk" insurance. The rule intends to protect consumers from misleading and deceptive marketing practices, ensuring these plans offer genuine short-term coverage without masquerading as comprehensive insurance. The adjustments are designed to prevent situations where consumers face unexpected high costs due to undisclosed limitations of coverage, particularly for pre-existing conditions.

  2. Specific Changes and Implications: The final rule mandates significant changes to the duration and transparency of short-term, limited-duration insurance plans. Previously extended to allow 12 months of coverage with the option to renew for up to three years under the Trump administration, these plans are now restricted to a maximum of four months with clear disclaimers required to inform consumers about the limitations of their coverage. This move aims to reduce risks to consumers, enhance market stability, and ensure that short-term plans serve their original purpose as temporary solutions during transitions between more comprehensive health coverage.

  3. Reaction from Healthcare Advocacy Groups: A coalition of 35 patient organizations, including the American Diabetes Association, the American Heart Association, and March of Dimes, has also endorsed the new regulation. These groups believe that the rule will clarify the intended use of short-term plans as brief stop-gap coverage, improving consumer understanding and confidence in the health coverage they purchase. The consensus among these organizations is that the regulation represents a victory for consumer protection, promoting transparency and safeguarding against plans that offer insufficient benefits and exploit loopholes regarding pre-existing conditions.

Weight-Loss Drug Zepbound Faces Supply Issues

By Sophia Putka - Another popular weight-loss drug is in short supply. Doses of tirzepatide (Zepbound) are few and far between, experts told MedPage Today, although the injectable has not been listed in the FDA Drug Shortage Database as of today. Read Full Article…

VBA Article Summary

  1. Shortage and Impact on Patients: Another version of tirzepatide, known as Mounjaro, for treating type 2 diabetes has been listed on the FDA's shortage list since December 2022, leading to significant disruptions for patients attempting to refill their prescriptions. The shortage has been likened to the early days of the COVID-19 pandemic, with patients feeling the need to protect their medication as if it were a scarce commodity. Physicians have observed a state of panic and chaos among patients due to the unavailability of this glucagon-like peptide-1 (GLP-1) agonist, highlighting a critical supply and demand issue that manufacturers underestimated.

  2. Underlying Causes and Physician Observations: The shortage is attributed to a combination of factors, including a surge in demand partly driven by expanded insurance coverage for Zepbound (another name for tirzepatide) after its introduction to the U.S. market in December 2023. Additionally, the transition of patients from other weight loss medications to Zepbound, due to its more effective mechanism of action involving both GLP-1 and glucose-dependent insulinotropic polypeptide (GIP), has exacerbated the supply strain. Experts fear the situation may worsen if tirzepatide receives approval for cardiovascular benefits, mirroring the demand seen for similar drugs.

  3. Responses and Future Considerations: Amidst these shortages, healthcare providers are adapting by adjusting doses when necessary, while Eli Lilly, the manufacturer, assures continuous production and shipment of all doses of Zepbound despite unprecedented demand. The FDA has yet to comment on the situation. Medical professionals emphasize the essential role of such medications, comparing their importance to aspirin or statins given their benefits in managing cardiovascular diseases and obesity, highlighting the urgency in resolving these shortages for the wellbeing of a significant portion of the U.S. population.

More Patients Are Losing Their Doctors — And Trust in the Primary Care System

By Lynn Arditi - First, her favorite doctor in Providence, Rhode Island, retired. Then her other doctor at a health center a few miles away left the practice. Now, Piedad Fred has developed a new chronic condition: distrust in the American medical system. Read Full Article…

VBA Article Summary

  1. Patient Distrust and Healthcare Accessibility Challenges: The article highlights the widespread issue of patients losing trust in the healthcare system due to the difficulty in finding and maintaining a relationship with a primary care provider. This issue has been exacerbated by a national shortage of healthcare workers, including doctors and nurses, driven by the stress of the pandemic and resulting in increased retirements or resignations. The lack of stable and familiar healthcare access leaves patients, like the 71-year-old Colombian immigrant Fred, feeling alienated and distrustful towards medical professionals.

  2. Strain on Community Health Centers: Staff Shortages and Workforce Turmoil: The impact of the healthcare worker shortage is particularly severe in community health centers, which serve as a critical safety net for the uninsured, underinsured, and vulnerable populations. These centers are experiencing significant staffing shortages, with about two-thirds losing between 5% and a quarter of their workforce in 2022, further straining the healthcare system. This shortage has led to increased workloads for remaining staff, deteriorating job satisfaction, and has prompted actions like informational pickets and strikes for better working conditions.

  3. Consequences of Provider Shortages: Compromised Care and Overburdened Emergency Services: The shortage of healthcare providers and the resulting breakdown in patient-provider relationships are having dire consequences on patient care and health outcomes. Patients are resorting to emergency rooms for primary care needs, further straining an already overwhelmed healthcare system. The article emphasizes the importance of a consistent relationship with a healthcare provider in improving overall health and reducing emergency room visits, underscoring the need for urgent solutions to address the healthcare worker shortage and restore patient trust in the system.

BIG INSURANCE 2023: Revenues reached $1.39 trillion thanks to taxpayer-funded Medicaid and Medicare Advantage businesses

By Wendell Potter - The Affordable Care Act turned 14 on March 23. It has done a lot of good for a lot of people, but big changes in the law are urgently needed to address some very big misses and consequences I don’t believe most proponents of the law intended or expected. Read Full Article…

VBA Article Summary

  1. Urgent Need for Reforms to Curb Corporate Influence and Financial Extraction in Healthcare: The article outlines the need for significant reforms to limit the influence and financial gains of large corporations, particularly in the health insurance sector, which has seen considerable profit increases at the expense of federal and state governments and individuals. This is highlighted by the experiences shared by the author, a former industry insider, who advocated for the inclusion of a public option in the Affordable Care Act (ACA) to compete with private insurers and reduce health insurance costs. Despite the ACA's achievements in expanding access to health insurance and introducing patient protections, it has also enabled insurance companies to amass substantial profits through government subsidies, premium increases, and out-of-pocket costs, largely due to loopholes and aggressive market strategies.

  2. Analyzing the ACA: Benefits and Drawbacks Amidst Insurance Companies' Profit Surge: The article provides a detailed analysis of the ACA's impact, showing both its positive effects, such as reducing the uninsured rate and outlawing discriminatory practices by insurers, and its negative consequences, including the transformation of health insurance companies into profit-driven entities. This transformation has led to increased premiums, higher out-of-pocket expenses, and substantial revenue and profit growth for insurers, with the industry's consolidation and expansion into Medicare and Medicaid exacerbating these issues. The author argues that the absence of a public option and the subsequent reliance on private insurers have contributed significantly to the current state of healthcare affordability and access in the U.S.

  3. Advocating for Legislative and Regulatory Changes to Foster Affordable and Accessible Healthcare: Finally, the author calls for comprehensive legislative and regulatory reforms to address the loopholes and barriers established by the insurance industry, advocating for measures such as increased transparency in pharmacy benefit managers (PBMs), enhanced consumer protections in Medicare Advantage, and a cap on out-of-pocket expenses for all insured Americans. These reforms aim to make healthcare more affordable and accessible, challenging the status quo that benefits the insurance industry at the expense of consumers. The article emphasizes the importance of public support and political action to achieve these changes, highlighting ongoing efforts to influence policy and encourage bipartisan solutions to the challenges facing the U.S. healthcare system.

CMS finalizes 2025 Medicare Advantage rates

By Rylee Wilson - CMS finalized a slight decrease in Medicare Advantage benchmark payments for 2025. The agency published its final rate notice for 2025 April 1. The final rule was largely similar to CMS' proposed payment rates issued in January. The agency will cut benchmark payments by 0.16% from 2024 to 2025. Read Full Article…

VBA Article Summary

  1. CMS's 2025 Revenue Forecast for Medicare Advantage Plans: CMS predicts a 3.7% revenue increase for Medicare Advantage plans in 2025, despite a risk model revision causing a 2.45% decrease in revenue and a decline in star rating bonuses. This is due to the MA risk score trend of 3.86%, indicating an average yearly increase in risk adjustment payments that offsets the revenue decline from model revisions.

  2. Industry Backlash and Financial Impacts Following CMS Rate Announcement: The final rate announcement from CMS, which led to a more than 4% drop in share prices for major insurers according to Bloomberg, has been met with criticism from payer industry executives and AHIP President Mike Tuffin. They argue that the rates will pressure Medicare Advantage beneficiaries' benefits and premiums, highlighting the challenges of covering rising costs in the Medicare Advantage market and the impact of ongoing regulatory and legislative changes.

  3. Concerns Over Rate Sufficiency and Future Medicare Advantage Plan Costs: CVS Health's CEO Karen Lynch voiced concerns that the proposed rates would not sufficiently cover the emerging cost trends in Medicare Advantage, emphasizing the complexity of the risk model affecting their 2025 bids. Additionally, Berkeley Research Group's analysis, funded by the pro-MA Better Medicare Alliance, suggests MA beneficiaries could face an average increase of $33 per month in reduced benefits or increased cost sharing. Meanwhile, CMS's phased coding adjustment changes aim to maintain stability and improve payment accuracy within the Medicare Advantage program, as stated by CMS Administrator Chiquita Brooks-LaSure.

KFF: Part D spending on Ozempic skyrocketed between 2018 and 2022

By Paige Minemyer - Spending on GLP-1 drugs in Medicare Part D has spiked massively over the past several years, according to a new analysis from KFF. Read Full Article…

VBA Article Summary

  1. Rapid Spending Increase on GLP-1s in Medicare Part D: The study highlighted a dramatic surge in Medicare Part D spending on GLP-1 class drugs, with spending on Ozempic alone rising from $56.8 million in 2018 to $4.6 billion by 2022. Similarly, spending on Rybelsus and Mounjaro also showed significant increases, with the combined expenditure on these three GLP-1 drugs reaching $5.7 billion in 2022.

  2. Impact on Medicare Spending and Part D Coverage: Researchers expressed concern over the potential impact of the high demand and costs of these drugs on Medicare spending, Part D plan costs, and premiums. The drugs, while offering substantial health benefits, are likely to exert tremendous pressure on Part D spending, especially as coverage expands to include drugs like Wegovy for additional indications beyond diabetes.

  3. Prospects for Negotiation and Broader Implications: The analysis suggested that due to the high demand and cost of GLP-1s, drugs like semaglutide might be selected for price negotiation in Medicare as early as 2025, with the potential to significantly reduce costs. The study also highlighted the broader implications of expanded Part D coverage for GLP-1s, including the anticipation of increased spending as more indications for these drugs are approved and as legislation evolves to potentially include obesity drugs under Medicare coverage.

Home Depot asks Supreme Court to rule on $2.7B BCBS antitrust settlement 

By Jakob Emerson - Home Depot has asked the U.S. Supreme Court to consider its challenge to a $2.67 billion settlement with Blue Cross Blue Shield companies following a decade long legal battle over alleged anticompetitive behavior. Read Full Article…

VBA Article Summary

  1. Supreme Court Review Sought by Home Depot on BCBS Settlement: Home Depot has requested the Supreme Court to review a decision by the 11th U.S. Circuit Court of Appeals from October, which upheld a settlement agreement initially reached in August 2022 between BCBS companies and their members. This settlement arose from a lawsuit initiated in 2012, where BCBS members accused the companies of conspiring to divide markets and avoid competition, which allegedly led to higher consumer costs. The agreement notably includes the elimination of a BCBS Association rule that mandated two-thirds of national net revenues to come from Blue-branded products.

  2. Settlement Agreement Facilitates Additional BCBS Plan Coverage for Large Employers: The settlement agreement also introduced provisions allowing certain large employers the option to seek coverage from a second BCBS plan in addition to the plan from the BCBS company located in the employer's headquarters region. This was part of the broader effort to address the original complaints of the lawsuit regarding market competition and geographic branding exclusivity.

  3. Concerns Over Future Antitrust Enforcement and Legal Precedents: However, Home Depot and other litigants challenged the settlement in September 2022, arguing that it failed to meet the lawsuit’s primary goal of preventing BCBS companies from obtaining exclusive rights to geographic branding. They expressed concerns that the settlement could negatively impact future antitrust enforcement and potentially restrict individuals from filing future lawsuits against BCBS companies. Home Depot’s attorney emphasized that the settlement contradicts established legal precedents and could weaken the enforcement of antitrust laws by allowing class action parties to forfeit remedies intended to protect future market competition.

Blue Cross Blue Shield must face Ford Motor antitrust claims, US judge rules

By Mike Scarcella - Blue Cross Blue Shield Association and its Michigan affiliate must face a lawsuit from Ford Motor accusing them of artificially inflating the automaker’s costs for health insurance, a U.S. judge has ruled. Read Full Article…

VBA Article Summary

  1. Judge Rules in Favor of Ford in Overcharging Claims Against Blue Cross: U.S. District Judge Linda Parker, in a ruling on Saturday at the Detroit federal court, determined that Ford had sufficiently claimed to have been overcharged for commercial health insurance products purchased from Blue Cross. Ford's lawsuit alleges that Blue Cross organizations engaged in antitrust law violations by conspiring to fix prices and refrain from competing, thereby depriving Ford of the opportunity to purchase health insurance products and services at lower costs or market-based prices.

  2. Ford Allowed to Pursue Specific Claims, Narrowing Allegations Scope: The judge's decision allows Ford to proceed with claims regarding higher premiums for health insurance and increased costs for an "administrative services only" product, while narrowing the scope of Ford's allegations to its purchase of administrative services from Blue Cross. Blue Cross and its Michigan affiliate have declined to comment on the ruling and have previously denied any wrongdoing.

  3. Context of Ford's Lawsuit Within Wider Legal Battle Against Blue Cross: Ford's lawsuit is part of a broader context of long-running litigation against Blue Cross for a price-fixing conspiracy, from which Ford and other major U.S. companies had opted out of a $2.7 billion settlement in 2020. The automaker, employing over 170,000 workers and incurring hundreds of millions in health-related costs, seeks triple damages for more than $500 million spent on premiums for certain Blue Cross products since 2009. A hearing is scheduled for April 25 to discuss scheduling matters related to the case.