Daily Industry Report - January 25

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 enrollment surged in red states this year

By Jason Millman - A record 21.3 million people signed up for health insurance on the Affordable Care Act marketplaces this year, with the largest enrollment increases tallied in red states. Read Full Article…

VBA Article Summary

  1. Significant Increase in ACA Sign-ups: The Affordable Care Act (ACA) witnessed a remarkable 30.7% annual increase in enrollments, sparking discussions about the law's sustainability amidst former President Trump's calls for its repeal. The surge in sign-ups was particularly notable in Republican-leaning states, suggesting that these regions would be significantly impacted by any potential repeal of the ACA.

  2. State-Specific Enrollment Trends: Data from the Centers for Medicare and Medicaid Services highlighted substantial year-over-year increases in ACA enrollments across several states, with West Virginia, Louisiana, Ohio, Indiana, and Tennessee leading the surge. Notably, Texas and Florida saw enrollments surpass the million mark, whereas Maine and Washington D.C. experienced slight decreases. The data underscores the widespread reliance on the ACA across diverse demographics and geographies, with almost a quarter of the enrollees being new to the marketplaces.

  3. Factors Contributing to the Enrollment Surge: The enrollment uptick can be partially attributed to individuals transitioning from Medicaid to ACA marketplaces following recent Medicaid coverage losses. Additionally, the expansion of marketplace subsidies by Democrats, set to expire in 2025 unless Congress intervenes, and the Biden administration's enhanced enrollment outreach efforts, along with the rectification of a subsidy-related "glitch," played crucial roles in facilitating the increased enrollment rates. These measures reflect a concerted effort to bolster the ACA's framework and accessibility.

VBA Poll Question - Please share your insights

What is your opinion on Eli Lilly's direct-to-consumer website for telehealth prescriptions and drug delivery, such as Zepbound? Do you think it will positively affect patient access and disrupt the traditional drug supply chain?

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Our last poll results are in!


of Daily Industry Report readers who responded to our last polling question on how prepared they felt they were for the implementation of the Consolidated Appropriations Act (CAA) and its requirements said “What is the Consolidated Appropriations Act?

37.78% of respondents stated they were “Somewhat prepared, 12.59% shared they were “Not prepared”while only 8.15% felt “Very preparedfor the implementation of the CAA and its 2024 requirements. 

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Health Cost and Affordability Policy Issues and Trends to Watch in 2024

By Krutika Amin, Emma Wager, Zachary Levinson, Juliette Cubanski, and Cynthia Cox - While issues of health care costs and affordability may not be at the forefront of this year’s election, they remain a major concern among the public. Health spending in the United States is projected to grow by 5% between 2023 and 2024, to a total of $4.9 billion. Here are key health costs and affordability policy issues and trends to watch in 2024. Read Full Article…

VBA Article Summary

  1. Site-Neutral Payment Reforms: The U.S. is moving towards site-neutral payment reforms, aiming to standardize reimbursement rates for outpatient services irrespective of the setting, be it a hospital outpatient department or a freestanding physician office. Recent legislative efforts, like HR 5378, seek to extend these reforms to areas such as drug administration in different healthcare settings, potentially saving billions. This shift not only promises substantial savings but also hopes to address the trend of hospitals acquiring physician practices, which has been linked to increased healthcare costs. However, opposition from hospitals highlights the complexities of different patient demographics, services, and cost structures that challenge the implementation of such reforms.

  2. Price Transparency and Its Impact: Federal price transparency requirements aim to empower consumers to make cost-effective healthcare choices by comparing prices across providers. The recent legislative push, exemplified by HR 5378, seeks to expand these requirements to more healthcare services. Despite bipartisan support, the effectiveness of these measures is debated. Critics point to the minimal impact on healthcare sector prices and the potential for adverse effects, like price hikes resulting from providers' responses to competitors' pricing strategies. The limited use of price comparison tools by consumers adds another layer of complexity, suggesting that targeted approaches might be more beneficial in making a significant cost difference.

  3. Prescription Drug Pricing Policies: The Inflation Reduction Act of 2022 introduced several measures aimed at curbing prescription drug costs within the Medicare program. These include capping insulin cost-sharing, requiring rebates for price increases above inflation, and initiating federal negotiations for high-cost drugs. These policies are projected to reduce out-of-pocket prescription drug spending significantly over the coming years. Although these provisions are primarily directed at Medicare, their ripple effects might extend to the private market. However, the extent of these impacts, including potential counteractions by pharmaceutical manufacturers, remains uncertain.

How AI will — and won't — change health care

By Caitlin Owens - Even AI optimists don't envision the technology fundamentally remaking the U.S. health care system anytime soon, but there's widespread agreement that it has the potential to vastly improve the quality of care and trim costly waste. Read Full Article…

VBA Article Summary

  1. Impact on Health Care and Adoption Resistance: The introduction of AI into health care is poised to bring significant changes, affecting not only patient care but also the millions of individuals employed within the system. The health care sector, characterized by its conservative nature, heavy regulation, and the vast financial stakes involved, is inherently resistant to rapid change. This resistance could moderate the pace of AI integration, especially in areas that might lead to job losses or increased costs. However, AI applications that promise to enhance revenue, improve productivity, or elevate the quality of life for health care workers are likely to see quicker adoption. These include advancements in biotechnology for drug discovery, enhancements in diagnostic accuracy, reduction of administrative burdens, and streamlining of billing processes.

  2. Emerging Potential and Limitations of AI in Health Care: While emerging research underscores the potential of AI in revolutionizing health care—ranging from patient interaction and diagnosis to reducing preventable hospital deaths—it also brings to light the technology's limitations and potential risks. Notably, current applications of AI in health care have shown mixed results, with some instances causing harm to patients. Despite these challenges, the pharmaceutical sector has seen a surge in AI-driven drug discovery, with numerous AI-developed drug candidates entering early-stage clinical trials. Industry leaders advocate a balanced and humble approach to AI integration in health care, emphasizing the necessity of aligning with the sector's complex nature and establishing supportive incentives.

  3. Future Prospects and Revolutionary Changes: The long-term vision for AI in health care is profoundly transformative, with industry visionaries predicting revolutionary changes akin to those witnessed in other sectors like automotive and chip manufacturing. Over the next two decades, AI is expected to significantly advance our understanding of biology, potentially enabling the early prevention of diseases and enhancing treatment efficacy. However, realizing these ambitious goals hinges on overcoming current adoption barriers, fostering widespread incremental acceptance of AI technologies, and ensuring that incentive structures support this transformative journey. As the industry gradually embraces AI, it is anticipated to reach a critical inflection point, leading to a paradigm shift where AI-driven technologies become the core drivers of the health care sector.

State employees in North Carolina could lose coverage of Wegovy, other weight loss medicines

By Jason deBruyn - The board that oversees the North Carolina State Health Plan will face a heavy decision Thursday when it considers dropping coverage of weight loss medications like Wegovy. Read Full Article…

VBA Article Summary

  1. Impact on Beneficiaries and the Health Plan: The North Carolina State Health Plan, covering over 740,000 individuals, faces significant financial challenges due to the high costs of GLP-1 medications like Wegovy, Saxenda, and Zepbound. These medications, effective for weight loss and other health benefits, have seen their user base within the plan skyrocket, with nearly 25,000 current members like Jessica Uhrick-Rieger benefitting from their use. However, the escalating costs—$102 million in 2023 and potentially exceeding $170 million in 2024—pose a threat to the plan's sustainability. This financial strain, coupled with the potential reduction in manufacturer rebates, has led the State Health Plan Board to consider discontinuing coverage for these medications, despite their proven efficacy and the positive health outcomes for individuals like Uhrick-Rieger.

  2. Wegovy's Role and Financial Implications: Wegovy, a notable GLP-1 medication, has gained attention for its effectiveness in weight loss and managing related health conditions. Patients like Uhrick-Rieger, who lost 103 pounds and resolved associated health issues, exemplify its benefits. However, the medication's high cost, with list prices of $1,349 per monthly refill, burdens the State Health Plan. State Treasurer Dale Folwell emphasized the drug's potential to disrupt the plan's finances, leading to a moratorium on new prescriptions and a potential discontinuation of coverage for existing patients. This move aims to mitigate the financial impact, yet it raises concerns about the future health and well-being of patients relying on these medications.

  3. Debate and Future Prospects: The high cost and effectiveness of GLP-1 medications have sparked a debate among stakeholders. While the State Health Plan Board and State Treasurer Folwell advocate for cost reduction measures and consider discontinuing coverage, medical professionals and patient advocates recognize the drugs' life-changing benefits. Dr. Andrea Coviello, among others, highlights the significance of these medications in treating weight-related health issues and advocates for continued coverage. The situation remains fluid, with potential changes in coverage and pricing strategies anticipated, influenced by negotiations with drug manufacturers, market dynamics, and the overarching need to balance financial sustainability with patient health outcomes.

Humana sent protected health information to the wrong address

By Rylee Wilson - Humana documents containing protected health information meant for providers were sent to the incorrect address, affecting enrollees in eight states. Read Full Article…

VBA Article Summary

  1. Humana Incident Discovery and Details: On December 8, Humana discovered that documents containing sensitive information such as enrollees' names, ID numbers, and claim payment details were mistakenly sent to incorrect addresses. The affected documents, known as explanation of payment documents, were distributed due to a system error, impacting members in multiple states including Alabama, Florida, Georgia, Illinois, Kentucky, North Carolina, Tennessee, and Texas.

  2. Response and Resolution: Upon identifying the issue, Humana took swift action to determine the root cause of the misdirection and rectified the system error. The company conducted thorough testing to ensure the integrity of the system and confirmed that the error had been fixed, stating that the system is now operating correctly.

  3. Lack of Misuse and Undisclosed Impact Scale: Despite the breach, Humana reported that there is no evidence of the mishandled information being misused. However, the spokesperson for Humana did not disclose the exact number of members affected by the incident.

New York joins cities erasing medical debt

By Jason Millman - A New York City plan to buy up medical debt for up to a half-million low- and middle-income residents could erase over $2 billion in medical bills, city officials said. Read Full Article…

VBA Article Summary

  1. New York's Groundbreaking Initiative: New York City has launched the most significant municipal initiative to abolish medical debt, allocating $18 million over three years in collaboration with RIP Medical Debt. This partnership aims to purchase and forgive large quantities of medical debt, benefiting countless residents without requiring them to undergo an application process. This move addresses medical debt as a primary cause of personal bankruptcy and a significant health hazard.

  2. National Efforts and the Role of Local Governments: While the federal government has initiated steps to remove medical debt from credit reports, and states are exploring various strategies to reduce financial burdens, local governments are increasingly taking direct action. Cities and counties, including Cook County, New Orleans, and St. Paul, are using federal pandemic relief funds to entirely erase medical debt for numerous residents. These actions reflect a growing trend of local interventions to tackle the pervasive issue of medical debt.

  3. The Scale of Medical Debt and Its Disproportionate Impact: The issue of medical debt is vast and unevenly distributed, as illustrated by Los Angeles County's contemplation of a plan to eradicate over $2 billion in medical debt. A county report highlights the widespread nature of the problem, with approximately 810,000 residents affected. The burden of medical debt is particularly heavy on lower-income and minority communities, underscoring the urgent need for comprehensive solutions to this pervasive financial and health crisis.

Disruption from Weight Loss Drugs Has Only Scratched the Surface. Telehealth Can Help Overcome the Next Big Obstacle

By Guy Friedman - News and social media are saturated with articles about the demand for and shortage of glucagon-like peptide-1 (GLP-1) drugs marketed for weight loss. The best-known of these drugs is semaglutide, sold under the brand names Ozempic and Wegovy. The widespread media coverage so far – primarily concerning drug demand, shortages and costs  – only tells part of the story. Read Full Article…

VBA Article Summary

  1. Impact of Weight Loss Drugs on Industries and Healthcare: New weight loss drugs like Wegovy and tirzepatide (Mounjaro and Zepbound) are catalyzing substantial shifts across various industries. Airlines anticipate increased profits due to lower fuel costs from lighter passengers, while retailers and food manufacturers predict a decline in demand attributed to reduced appetites. Conversely, clothing companies expect a surge in sales as individuals seek new wardrobes to match their slimmer figures, and life insurers are optimistic about the prospect of longer lifespans for their clients. These drugs are not just about weight loss; ongoing research highlights additional health benefits, including improvements in cardiovascular health and potential treatments for substance use disorders and dementia. However, the demand for these drugs poses a significant challenge to the healthcare system, as patients require comprehensive management including follow-up visits and counseling on diet, exercise, and mental health, creating a looming clinician capacity crisis.

  2. Clinician Capacity Crisis and the Role of Telehealth: The surge in demand for GLP-1 drugs is clashing with an already existing shortage of primary care physicians in the U.S., a situation exacerbated by a preference among medical graduates for higher-paying specialty roles over primary care positions. This shortage is critical given that obesity demands lifelong management and primary care physicians play a pivotal role in this process. The current healthcare infrastructure is further strained by physician burnout and inadequate time for obesity counseling. However, telehealth emerges as a promising solution to bridge this gap, offering a platform for qualified healthcare providers to manage the increasing patient load effectively and safely, regardless of geographic location. This approach requires immediate action to fortify the telehealth infrastructure, ensuring a robust, nationwide clinician capacity ready to handle the burgeoning demand for weight loss drug management.

  3. Urgent Need for Strategic Planning in Healthcare: As the availability of weight loss drugs like Ozempic and Wegovy escalates, with significant volume increases anticipated in the U.S. market by 2024, the healthcare sector faces the pressing need to prepare. This preparation involves not only ensuring an adequate supply of drugs but also establishing a comprehensive support system for patients. Healthcare providers must extend beyond prescription services to offer substantial support in overcoming lifestyle challenges, instilling sustainable health habits, and monitoring for potential health complications. The expansion of telehealth services is pivotal in this scenario, ensuring accessible and equitable healthcare delivery. Strategic planning and scaling of telehealth capabilities must commence immediately to meet the imminent demand and ensure that all patients, not just a privileged few, benefit from these transformative treatments.

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HR teams: Prepare for the realities we expect to see in 2024

By Kim Buckey - Employees’ needs— and how organizations attempt to balance those needs against corporate budgets— have continued to evolve. Most recently, rising inflation, a tight labor market, hybrid work arrangements, and a broader focus on all aspects of employee wellbeing, have altered the benefits packages that employers have offered in recent years in an effort to maintain their ability to compete for and retain talent. Read Full Article…

VBA Article Summary

  1. Escalating Health Care Costs and Employer Responses: As health care costs continue to surge in 2024 due to factors like inflation, new medical technologies, and an aging population, employers are expected to face rising premiums and expenditures. A significant portion of employers may respond by increasing employee contributions, while others might look into augmenting deductibles, co-pays, or introducing more cost-effective plan options. Additionally, to mitigate these costs, more employers are anticipated to offer services like enrollment support and advocacy specialists to aid employees in choosing cost-effective plans, understanding their benefits, and handling claims and billing issues.

  2. Enhanced Voluntary Benefits and Targeted Solutions: With the pressure of inflation and constrained budgets, employers are likely to broaden their voluntary benefits offerings and incorporate specific point solutions aimed at addressing particular challenges. The trend of adding voluntary benefits such as accident, critical illness, and hospital indemnity insurance is expected to continue, alongside a growing interest in disability and life insurance. There's also a forecasted increase in demand for long-term care coverage and women-centric benefits like family-forming services and support through menopause. By integrating these in-demand voluntary benefits, employers aim to not only meet employee expectations but also enhance the overall utilization and value derived from these benefits.

  3. Refined Health Care Benefits Strategy through Data Utilization: More employers are poised to leverage newly accessible data to fine-tune their health care benefits strategies. This includes using transparency data from network hospitals for better carrier negotiations and analyzing in-house claims data to consider new plan offerings and communication strategies. A thorough assessment of how employees are utilizing current programs will help identify highly valued benefits and pinpoint opportunities to promote underutilized yet beneficial offerings. Emphasizing data-driven decisions and organizational benchmarks, employers are moving towards fostering consistency and stability in their benefits strategies to effectively manage the increasing health care costs and meet the evolving needs of their workforce.

How ‘price tag messaging’ can amplify an employee benefits package

By Bryce Sanders - Here’s a well-kept secret: Benefits offered to employees cost the company money. If someone on your payroll decided they wanted to start their own business, it would be quite expensive to replace all the benefits employers provide along with employment. Let us look at just a few of these benefits: Read Full Article…

VBA Article Summary

  1. Employee Benefit Costs and Contributions: Employers bear a significant portion of the costs for health, life, and disability insurances, retirement plans, and paid time-offs, providing a substantial hidden value to employees. For instance, the average cost of an employer-sponsored health plan in 2021 was $3,331, with employees contributing about 22%, and the firm covering the remaining amount. The average employer match for 401(k) plans in 2023 was 4.7% of an employee's salary, while employees contributed around 8.8%. These benefits, along with others like sick leave and paid vacations, constitute a form of unseen compensation that significantly adds to the total compensation package, yet may often go unnoticed by employees.

  2. Unseen Compensation: The Bureau of Labor Statistics reported that in December 2022, total compensation costs for civilian workers averaged $42.48 per hour, with wages and salaries making up $29.32 and benefits adding another $13.17. This means that benefits constitute about 31% of the total compensation, a substantial portion that employees might not fully recognize or utilize. Employers incur these costs, providing a hidden value that contributes to the financial well-being and security of their employees.

  3. Communicating the Value of Benefits to Employees: Employers face the challenge of making employees aware of the value of the benefits provided. Similar to how a gift giver desires acknowledgment for a present, employers should ensure that employees understand the worth of their benefits package. Tactics such as highlighting a specific benefit in the company's eNewsletter, discussing a personalized benefits summary during annual performance reviews, or presenting the value of benefits in dollar terms during employee meetings can help in effectively communicating the "unseen" portion of the compensation, thereby enhancing employee appreciation and potentially boosting morale and loyalty.