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- Daily Insurance Report - August 17, 2023
Daily Insurance Report - August 17, 2023
Your summary of the Voluntary and Healthcare Industry’s most relevant and breaking news; brought to you by the Voluntary Benefits Association®
VBA Poll Question of the Week - Please share your insightsWhat is your opinion regarding the Biden-Harris administration’s efforts to crack down on so-called “junk insurance” products, which could possibly include short-term medical, medical gap, cancer and critical illness. |
Last week’s poll results are in!
44.44%
Of Daily Insurance Report readers who responded to last week’s poll were not at all confident in their knowledge around the reporting and filing requirements now in effect from the Consolidated Appropriations Act (CAA).
Have a poll question you’d like to suggest? Let us know!
House Reps Introduce Bill To Ease State Medicaid Staffing Shortages Amid Redeterminations
By Marissa Plescia - The Medicaid Staffing Flexibility and Protection Act was introduced by Representative Earl L. “Buddy” Carter (R-Georgia) and Representative Neal Dunn (R-Florida). It would allow state Medicaid agencies to hire outside contractors to help with Medicaid redeterminations, as many agencies don’t have the workforce to handle the return to the redetermination process. Read Full Article…
VBA Article Summary
Medicaid Continuous Enrollment Provision Impact: As the U.S. began unwinding the Medicaid continuous enrollment provision on April 1, Medicaid and CHIP enrollment swelled to almost 95 million beneficiaries by the end of March due to the provision that prevented states from disenrolling beneficiaries during the Covid-19 public health crisis. Now, as the provision unwinds, beneficiaries will undergo the usual Medicaid redetermination process to assess their continued eligibility.
Medicaid Staffing Flexibility and Protection Act: Introduced by Representatives Earl L. “Buddy” Carter (R-Georgia) and Neal Dunn (R-Florida), the proposed legislation seeks to help state Medicaid agencies address workforce challenges in managing the return to the redetermination process. The act would permit states to hire external contractors to assist with Medicaid redeterminations, providing states an avenue to address staff shortages and ensure more efficient handling of redetermination, potentially decreasing unwarranted disenrollments.
Current Disenrollment Data and Concerns: As of the present, approximately 4.6 million individuals have been disenrolled from Medicaid in 44 states and the District of Columbia. Notably, 75% of these disenrollments have been due to procedural issues, such as outdated contact information or beneficiaries not meeting renewal deadlines. This points to a significant issue where many of those disenrolled might still be eligible for Medicaid, highlighting the importance of improving and streamlining the redetermination process.
CMS Lowers No Surprises Act Fee After Court Nixes Price Hike
By Katie Adams - CMS recently announced that it will change the administrative fee that providers and insurers must pay when initiating a reimbursement dispute under the No Surprises Act — the agency is lowering the fee from $350 to $50. This move came a week after the Texas Medical Association won a court case challenging HHS over its 600% price hike on the fee. Read Full Article…
VBA Article Summary
Background on the No Surprises Act and IDR Fee Controversy: The No Surprises Act was established in December 2020 to safeguard patients from unexpected medical bills, especially those associated with emergency out-of-network services. The legislation incorporates an independent dispute resolution (IDR) mechanism when there's a discrepancy between providers and insurers over reimbursement rates. CMS had initially set the IDR administrative fee at $50 for 2023. However, by December, the fee was raised to $350, with CMS justifying the hike based on "supplemental data analysis and increasing expenditures."
Texas Medical Association's Legal Challenge: The Texas Medical Association contested this abrupt fee increase in court, noting its potential to deter many providers from accessing the IDR process due to the prohibitive costs. On August 3, U.S. District Judge Jeremy Kernolde ruled in favor of the Texas Medical Association. He emphasized that HHS did not adhere to necessary protocols, particularly the notice and comment prerequisites, before imposing the new fee. Consequently, the $350 fee was invalidated, leading HHS to temporarily halt the entire federal IDR process.
Current Status of the IDR Fee and Process: Following the legal outcome, CMS clarified in a newly published FAQ document that the IDR administrative fee for disputes raised post-August 3 would be reverted to the original $50. This rate will also be valid for all unresolved disputes initiated prior to the aforementioned date. Notably, for those disputes launched between January 1 and August 2, which were already settled with the $350 fee, no reimbursements are mandated per Kernolde’s decision. Presently, the CMS federal IDR portal remains inaccessible but plans to relaunch "soon" are underway.
UnitedHealth was Q2's most profitable payer. Here's what its rivals earned
By Paige Minemyer - While major payers issued warnings to investors ahead of second-quarter earnings about rising utilization rates, patients returning to deferred services did not prevent these companies from turning a profit. Read Full Article…
VBA Article Summary
Leader in Profitability: UnitedHealth Group (UHG) maintained its top position in profitability for both the second quarter and first half of 2023. The company reported a profit of $5.5 billion in the second quarter and $11.1 billion for the first half of the year. In comparison, CVS Health, the second-highest in profit, posted earnings of $1.9 billion for the second quarter and $4 billion for the first half.
Revenue Rankings: UHG also led the pack in terms of revenue, registering $92.9 billion in the second quarter and a substantial $184.8 billion for the first half of 2023. CVS Health trailed closely, with reported revenues of $88.9 billion in Q2 and $174.2 billion for the first half. Other contenders like Elevance Health and Cigna Group reported significant revenues, but neither matched UHG or CVS Health's figures.
Industry Trends and Challenges: Healthcare companies witnessed increased patient utilization, likely influenced by deferred treatments during the pandemic. UHG's CEO, Andrew Witty, highlighted that many of the increments were related to orthopedic care and outpatient surgeries. CVS Health also observed an uptick in its Medicare Advantage plans. However, while most companies expressed concerns over rising utilization, the consistent theme was patients returning to services paused during COVID-19. Meanwhile, Elevance Health was focused on the Medicaid redetermination process, which led to a drop in members, a concern that was also shared by Centene.
Amid rising inflation, employers structuring benefits plan designs
By Anson Jones - The survey noted that the vast majority of plans (87%) do not cover “new” drug therapies. Primary concern for employers is managing the economic impacts of inflation and providing employees the benefits they need to withstand rough economic times. Many employers have adopted specific practices that address health care utilization and offer benefits plans that attract and retain high quality employees. Read Full Article…
VBA Article Summary
PPO Plans vs. HDHP’s: The 2023 Healthcare and Employee Benefits Benchmarking Report highlights the increasing popularity of Preferred Provider Organization (PPO) plans among companies striving to eliminate barriers to primary care. In contrast, high-deductible health plans (HDHP’s) are witnessing a decrease in preference, with only 29% of the surveyed participants offering such plans.
Pharmacy Plan Trends: As drug costs continue to rise, over half of the employer respondents confirmed that they now offer four or more tiers within their pharmacy plans. However, a significant 87% of these plans do not cover "new" drug therapies, which could indicate hesitancy towards newer, potentially untested medications.
Funding Approaches Differ by Company Size: The survey divulges varying funding strategies among companies based on their size. Smaller businesses predominantly fully fund their medical plans. In contrast, larger organizations tend to favor self-insurance, but notably, only 62% of them opt for this approach, suggesting it isn't the unanimous preference even among these corporations.
Biden Is Making Obamacare Even Worse
By Andrew Abbott - Nearly 14 years after the passage of the Affordable Care Act, commonly referred to as “Obamacare,” President Joe Biden is doubling down on some of the worst aspects of the policy. Last month, Biden moved to eliminate short-term private health plans that currently function as a far more affordable alternative to Obamacare. These plans, which have flexible coverage periods ranging from 30 days to three years, can also be obtained any time of the year rather than just during the Obamacare open enrollment period. Read Full Article…
VBA Article Summary
Historical Context and Proposed Changes: Short-term plans gained prominence after President Donald Trump extended their restrictions in 2018. Previously, President Barack Obama had capped these plans at three months in 2016, hoping to encourage enrollment in Obamacare plans. Now, President Biden aims to limit these short-term plans further, capping them at four months without renewal options. The goal is to promote enrollment in Obamacare, but this move could leave many without insurance outside of the designated enrollment periods.
Unintended Consequences of Obamacare: Despite promises from former President Obama that those who liked their insurance could retain it, many found their policies canceled post-Obamacare due to non-compliance with new standards. Around 4.7 million lost their healthcare shortly after Obamacare's introduction, as per Rep. Paul Gosar (R-AZ). The promise that the Act would reduce premiums didn't come to fruition either. From 2013-2017, the average individual market premium rose by 105%. Today, the average annual cost of Obamacare plans for families exceeds $18,000, with deductibles reaching nearly $8,000.
The Short-Term Plan as an Alternative and Its Impending Restriction: Given the rising costs of Obamacare plans, the cheaper short-term alternatives, made more accessible by President Trump, were a preferred choice for many. These plans, devoid of the trappings of Obamacare, provided a financially viable option. However, Biden's proposal could restrict access to these plans, with the Congressional Budget Office estimating that 1.5 million would lose their current plans, and 500,000 would be left without coverage entirely. While Democrats argue for the universal adoption of Obamacare as a solution to its challenges, current evidence suggests otherwise.
The ERISA Edit: Analysis of MHPAEA Proposed Rule and Report of Congress, Part II
By Miller & Chevalier - This week we focus on the recently proposed Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) regulatory requirements issued by the Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury (collectively, the Departments) aimed in large part at preventing plans and issuers from imposing non-quantitative treatment limitations (NQTL) on mental health and substance use disorder (MH/SUD) benefits that are not in parity with those imposed on medical and surgical (M/S) benefits. As discussed last week, access to MH/SUD benefits is the driving force behind the notice of proposed rulemaking. The proposed regulations introduce new requirements and augment existing standards by which parity will be assessed. Read Full Article…
VBA Article Summary
No More Restrictive Requirement: This new requirement states that the Non-Quantitative Treatment Limitation (NQTL) imposed on Mental Health/Substance Use Disorder (MH/SUD) benefits cannot be more restrictive than those applied to Medical/Surgical (M/S) benefits. "Restrictive" pertains to any conditions, terms, or requirements that limit access to benefits, and "Substantially all" indicates that the NQTL applies to at least two-thirds of all M/S benefits. The proposal allows exceptions to NQTLs that are based on unbiased medical or clinical standards or those specifically aimed at detecting and preventing fraud and waste.
Design and Application Requirements: The requirements revolve around the 2013 NQTL regulatory framework. Plans or issuers must not impose NQTLs on MH/SUD benefits unless the strategies, processes, and evidentiary standards used are comparable to those used for M/S benefits. Factors or evidentiary standards that show bias against MH/SUD benefits are not allowed. Factors derived from historical plan data when the plan wasn't compliant with the Mental Health Parity and Addiction Equity Act (MHPAEA) are also prohibited.
Relevant Data Evaluation Requirements: Plans and issuers must collect and assess data about the impact of an NQTL on benefit provision and administration. Any significant discrepancies in access to MH/SUD benefits, as compared to M/S benefits, that arise from the data will either be seen as a strong indication or a direct violation of the first two requirements. For NQTLs associated with network composition, such discrepancies will directly be considered a violation.
Senate bill would provide $20M in funding for behavioral health EHRs
By Andrea Fox - The Behavioral Health Information Technology Coordination Act would also direct ONC and SAMHSA to develop voluntary standards for mental health electronic health records and work with CMS to promote their adoption and interoperability. New bipartisan legislation on Capitol Hill aims improve the coordination of mental and physical healthcare with a funding and guidance to spur wider adoption of electronic health records for behavioral health providers. Read Full Article…
VBA Article Summary
Introduction and Funding: The Behavioral Health Information Technology Coordination Act was proposed by U.S. Sens. Catherine Cortez Masto (D-Nev.) and Markwayne Mullin (R-Okla.), accompanied by Reps. Doris Matsui (D-Calif.) and Bill Johnson (R-Ohio). This legislation designates $20 million annually in grant financing spanning five fiscal years, commencing in FY25.
Operational and Regulatory Details: The Office of the National Coordinator for Health Information (ONC) would be responsible for supervising these grants. They would provide reports to Congress regarding the number, type, and efficiency of behavioral health care providers benefiting from these grants. The ONC would collaborate with the Substance Abuse and Mental Health Services Administration (SAMHSA) to formulate voluntary behavioral health IT standards. Furthermore, the Centers for Medicare and Medicaid Services would team up with ONC and SAMHSA to offer guidance to states about using Medicaid to encourage the adoption and interoperability amongst behavioral health providers. Privacy concerns are addressed in the bill, ensuring that the development of regulations will take into account privacy when sharing patient health data across various healthcare systems.
Eligibility and Broader Implications: Those eligible for the provisions of this act include doctors, clinical psychologists, nurse practitioners, clinical social workers, psychiatric hospitals, and certain community mental health centers and mental health or substance abuse treatment facilities. In the broader context, Electronic Health Records (EHRs) are viewed as an asset for mental health providers, enhancing their data usage and aiding in addressing social determinants of health. However, Jeremy Bloom, CEO of NorthSight Recovery, observes that behavioral health providers have historically lagged in technology integration, a gap that this bill aims to bridge.
Plan Sponsors Add Benefits to Blunt Inflation’s Sting
By Noah Zuss - Goldman Sachs Ayco analyzed workplace compensation and benefits offerings, with controlling health care costs a particular focus. To retain and attract employees in a tight labor market, corporations are implementing initiatives to control health care costs and trying to unburden their workers, whose finances have been stressed by inflation, according to the “Goldman Sachs Ayco 2023 Benefits & Compensation Trends in Corporate America Report.” Read Full Article…
VBA Article Summary
Inflation Impact and Company Response: Kathy Barber from Goldman Sachs Ayco highlights that the enduring inflation has posed financial hurdles for the American workforce. To aid employees in navigating these challenges, many proactive companies have revamped their benefits package. The “2023 Segal Health Plan Cost Trend Survey Report” reveals an anticipated 7.4% rise in the average health benefit cost per worker for 2023. Despite the rarity of changing medical plan carriers, 10% of plan sponsors searched for better rates across carriers; 40% of firms bore the cost increase of the average health benefit, and 5% heightened the contributions to workers' health savings accounts.
Health Plans and HSAs: The research uncovers that 32% of businesses provide a high-deductible health plan (HDHP) alongside at least two other medical schemes. While HDHPs demand a steeper deductible from workers in exchange for reduced monthly premiums, they can be coupled with health savings accounts (HSAs) to extend extra benefits. These HSAs, offering triple tax benefits, permit account holders to invest their deposits, get medical expenditures reimbursed, and utilize the accumulated funds for legitimate health-related expenses during retirement. Notably, 87% of employers now contribute more than $500 to HSAs to mitigate inflationary effects. Furthermore, 22% of them are transitioning to matching formulas or integrating wellness incentives, promoting greater HSA use.
Diverse Voluntary Benefits: The report unearths several emerging trends in corporate benefits. There's been a significant rise in child and elder care assistance benefits, with a growth of 177% in three years. Also, 55% of companies now offer such benefits. Moreover, pet insurance has observed a 120% surge in the same duration. Another remarkable trend is the increasing accessibility to fertility, adoption, and surrogacy benefits, which is now provided by 60% of businesses, a jump from 40% in 2022. Amidst common voluntary benefits, mental health remains at the forefront, with a provision rate of 95%. This focus on mental health is not just due to regulatory obligations, but also because more companies are emphasizing its importance in their corporate ethos. Other popular voluntary benefits include group legal plans, personal accident insurance, critical illness insurance, identity theft protection, and again, pet insurance.
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Virginia Obamacare premiums to spike with reinsurance program end
By Dave Ross - Obamacare health insurance costs in Virginia are set to spike next year because the General Assembly budget impasse means a financial deal that cut premiums has now lapsed, a State Corporation Commission analysis shows. The analysis projects individual coverage would rise by 28.5% in 2024, after the reinsurance program the state financed — in tandem with a much larger federal sum — cut this year’s premium rates an average of 17.2% from 2022’s average premium rates. Read Full Article…
VBA Article Summary
End of Reinsurance Program and Impact on Premiums: The reinsurance program serves as a protective measure against health insurers' highest claims, reducing premium rates for insurers. Its termination is the primary cause for an anticipated surge in premium costs. Without the reinsurance, premiums are expected to surge by an average of 26.4%, according to the SCC analysis. Specific rate increase proposals from various health insurance companies were mentioned, such as HealthKeepers Inc. proposing a 16.9% increase, and Cigna Health Insurance requesting a 24.1% hike.
Budget Impasse and Its Implications: The budget disagreement arises from contrasting views on tax relief proposed by Gov. Glenn Youngkin and preferences by the state Senate to prioritize areas like K-12 school support. The ongoing dispute over the budget affects decisions regarding the reinsurance program, as a larger targeted reduction in premiums would need more state funds but would also quickly secure federal funds. The ultimate costs to support the reinsurance program in 2023 are estimated at $331.9 million from the federal government and a potential $43.4 million contribution from Virginia.
State of the Health Insurance Market: While the individual market appears robust with more insurers offering expanded coverage and an expected 10% growth in enrollment, concerns exist around the small group market. This segment expects only a 2% rise in enrollment next year, remaining 11% lower than levels from five years prior. Obamacare insurance for small groups, not part of the reinsurance program, will experience a 5.1% increase due to enhanced benefits resulting in a 1.4% rise in insurer costs. Despite the impending increases, the SCC analysis highlighted a healthy individual market with a growing number of providers and a minimum of two insurers available in every part of the state.