State insurance regulators grapple with how and whether to regulate AI

By John Hilton - State regulators are studying, surveying and scrutinizing artificial intelligence for any negative impacts on the insurance world. What they are not doing -- yet -- is issuing any model laws for states to adopt. Regulators came close last month with the release of the Model Bulletin on the Use of Algorithms, Predictive Models, and Artificial Intelligence Systems by Insurers. Read Full Article…

VBA Article Summary

1. AI Integration in the Insurance Sector: The National Association of Insurance Commissioners (NAIC) and various stakeholders are keenly discussing the implementation and regulation of artificial intelligence (AI) in the insurance industry. Recent survey data reveals that 70% of homeowners' insurers are either using, planning to use, or exploring AI applications. The potential and challenges of integrating AI into insurance operations are evident, with many companies intrigued by the numerous benefits AI could offer. Yet, there is a recognized struggle on how to effectively regulate this expansive technology.

2. AI Principles and Calls for Stronger Regulation: In 2020, the NAIC had adopted guiding principles on AI based on the Organization for Economic Co-operation and Development’s standards, which 42 countries, including the U.S., have accepted. These principles emphasized fairness and encouraged measures to prevent proxy discrimination against protected classes. Despite these guidelines, critics, including Peter Kochenburger, a law professor, believe that recent regulatory documents lack substance. Kochenburger critiques the lack of clarity, guidance, and the potential for proxy discrimination, particularly in the context of big data. Additionally, some see a missed opportunity in the wake of George Floyd's murder to bolster these AI principles and build a more solid foundation for the industry.

3. Industry Concerns with Over-Regulation: On the other side of the debate, representatives from the insurance industry express apprehensions about the possibility of over-regulation. Dave Snyder, vice president for the American Property Casualty Insurance Association, voiced concerns that expanding the AI policy could become burdensome to insurers. He argues that excessive requirements, like enhanced oversight of third-party vendors, might prove counterproductive, potentially leading to increased costs and reduced service quality for the public. He advocates for a bulletin that's more "limited in scope" and doesn't impose unnecessary regulations. The NAIC is currently open to receiving comments on this topic until Sept. 5.

Team-Based Primary Care Offers a Solution for an Underachieving Healthcare System

Team-based primary care is needed now more than ever as our “on-demand” and mobile lives, complicated by a primary care shortage crisis, have led to a more transactional and fragmented healthcare experience.

By Dr. Sara Pastor and Ann Greiner - Improving our underachieving healthcare system is more than an economic, medical, technological, or academic puzzle. It’s personal. For people across the U.S., it has a profound impact on their quality of life; even more so for individuals with complex care needs, mental illness, and those facing broader health-affecting challenges like poverty or homelessness. One of the most powerful solutions we have to support individuals who need the most complex support and care coordination is one that considers whole-person health: team-based primary care. Read Full Article…

VBA Article Summary

1. Critical Role of Holistic Primary Care: Whole-person primary care is essential for a thriving healthcare system. Without it, crucial aspects such as prevention, early diagnosis, and chronic condition management are compromised, leading to inefficient care and increased healthcare costs. The current trend towards urgent care and telehealth, while convenient, often lacks the holistic approach and patient trust inherent to primary care, contributing to a fragmented and underachieving healthcare system.

2. Team-Based Primary Care as the Solution: Implementing a team-based primary care approach offers a comprehensive health solution that can greatly enhance our healthcare system's efficiency. These teams are characterized by: Developing strong patient relationships. Incorporating diverse skills and care opportunities that thoroughly cater to patient needs. Adopting payment structures that incentivize collaboration for improved patient health.

3. Real-World Impact of Team-Based Primary Care: The story of the middle-aged woman from Colorado exemplifies the transformative potential of integrated primary care teams. By connecting with hospitals, specialists, and community resources, these teams can address both health and social factors affecting patients. Without such dedicated and integrated teams, many patients, like the woman in the story, would continue to fall through the cracks, relying on inadequate solutions like emergency rooms. As our society gravitates towards an "on-demand" lifestyle, coupled with a crisis in primary care availability, investing in team-based primary care becomes crucial to ensure comprehensive, patient-centered healthcare for all.

SMBs are rethinking group health benefits amid rising costs

By Victoria Glickman Hodgkins - With the cost of employee benefits rising, smaller employers can struggle to offer meaningful benefits packages. SMBs have less bargaining power with health insurers and often lack a dedicated HR professional to manage employee benefit packages. As a result, only 39% of organizations with 3-9 employees and 67% of organizations with 10-199 workers offer health benefits, according to data from the Kaiser Family Foundation. Read Full Article… 

VBA Article Summary

1. Traditional Group Health Insurance Challenges: Traditional group health insurance often overlooks individual needs, limiting flexibility and personalization. It usually leads to increased premiums and deductibles, with the Kaiser Family Foundation reporting that 75% of employers with under 200 employees offer only one health plan. This often means employees don't get a say in their healthcare benefits, such as which network they belong to or the deductible they have to pay. As a result, many seek supplemental health insurance to fill coverage gaps, despite 65% of employees valuing the ability to choose their benefits.

2. The Rise of HRAs: Health Reimbursement Arrangements (HRAs) are an employer-funded health benefit that allows for tax-free reimbursements for individual health insurance premiums and certain medical expenses. Unlike traditional group policies, HRAs empower employees to select their own health insurance policies. Two notable HRAs are QSEHRA (for employers with less than 50 FTEs) and ICHRA (available to all sizes of employers). Data indicates a positive trend in the adoption of HRAs, with QSEHRA allowances increasing by 40% in the past four years, showcasing its growing popularity and practicality.

3. Alternative Health Benefits: Beyond HRAs, there are other innovative alternatives to traditional group health insurance. For example:
   Health Stipends - These are taxable allowances provided by employers to aid employees in health-related expenses without requiring evidence of how they are used.
   Integrated HRA (GCHRA) - This allows businesses to supplement existing group health plans by reimbursing certain medical expenses tax-free, offering a middle ground for those not ready to abandon group health benefits.

These alternatives, combined with alarming statistics like 87% of large employers predicting that group health insurance expenses will be untenable within a decade, suggest that a shift towards more personalized, employee-driven health benefits is on the horizon.

Here are the 10 drugs that will be up first for Medicare price negotiation

By Rachel Cohrs and Matthew Herper - Medicare on Tuesday announced it will negotiate prices for 10 drugs, including major blood thinners and diabetes medications, in the first round of its negotiation program created in Democrats’ drug pricing reform law. Read Full Article…

VBA Article Summary

1. Drug Pricing & Impact on Medicare: Several major pharmaceutical companies, including Bristol Myers Squibb, Johnson & Johnson, and AstraZeneca, will have the prices of their drugs renegotiated by Medicare. These drugs have been selected due to their significant financial impact on Medicare, costing the program over $50 billion and accounting for 20% of Medicare's pharmacy drug expenditures within a year.

2. Political and Economic Implications: The list of drugs being renegotiated was highlighted by President Biden as a victory for the Democratic Party, with emphasis on the potential economic benefits. The President linked the negotiations to his "Bidenomics" plan, suggesting it would also help lower the federal deficit. However, there is political opposition, with every Republican voting against this legislation, and the potential economic benefits have yet to be realized.

3. Legal Challenges & Future Prospects: Multiple pharmaceutical companies have launched legal challenges against the negotiation program, deeming it unconstitutional. Despite these challenges, Neera Tanden, director of the Domestic Policy Council, is confident in the legitimacy of the law. The program will continue its roll-out, with negotiations set for more drugs in the coming years, aiming for discounts ranging from 25% to 60% off listed prices. The negotiation process will also take into consideration several factors such as a drug’s clinical benefit and its impact on specific populations.

[VIDEO] Poor Americans to feel the burn from health insurer Elevence's decision in Medicaid dispute

By Wendell Potter - Elevance had one of the highest denial rates among managed care organization (health insurers that provide services for a set monthly fee), according to the HHS’s Office of the Inspector General. And no where are these high denial rates more clear than in Ohio, Virginia and other states where Elevance manages taxpayer-supported Medicaid and Medicare Advantage plans. Read Full Article…

VBA Article Summary

1. Elevance's Dominance in Medicaid: More than 1 in 7 Medicaid beneficiaries are now enrolled with Elevance, which has been accused of avoiding claims payments. Specifically, they've been reported to refuse coverage for treatments and medications, even when recommended by physicians.

2. Disputes Lead to Reduced Access to Care: Due to unpaid claims amounting to $100 million, Elevance and Bon Secours Mercy Health have developed a significant disagreement. This conflict resulted in Elevance removing Bon Secours Mercy Health from its Ohio hospital network on July 1, causing Medicaid patients to potentially need to travel further for in-network hospital services.

3. Legislative Intervention Needed: There is a pressing need for Congress and state lawmakers to address and rectify the predatory practices of health insurers, especially when they impact taxpayer-funded programs like Medicaid. This is of paramount importance to ensure that the most vulnerable sections of the population, such as the poorest Americans, can access the healthcare they require.

Drug retailer Rite Aid prepares to file for bankruptcy, Wall Street Journal reports

By Reuters - Rite Aid Corp (RAD.N) is preparing to file for bankruptcy in coming weeks to address lawsuits the drugstore chain is facing over its alleged role in the sale of opioids, the Wall Street Journal reported on Friday, citing people familiar with the plan. Shares of the pharmacy retail chain operator closed down 51% at 71 cents. Read Full Article…

VBA Article Summary

1. Rite Aid's Chapter 11 Filing: Rite Aid has filed for Chapter 11, aiming to address its substantial debt, which amounts to over $3.3 billion. The filing also pertains to legal allegations accusing the company of oversupplying prescription painkillers.

2. Legal Battles and the Opioid Crisis: The pharmacy chain, among others, has been implicated in multiple lawsuits alleging a role in exacerbating the opioid crisis in the U.S. The U.S. Department of Justice, in particular, has sued Rite Aid for missing "red flags" and illegally filling numerous prescriptions for controlled substances, especially opioids. While other companies in the sector have reached settlements amounting to over $50 billion, Rite Aid has so far only made smaller agreements, such as a $10.5 million deal with a few counties the previous year.

3. Scope and Scale of Rite Aid: Operating more than 2,330 stores across 17 states, Rite Aid maintains a regional focus. However, its scale is significantly smaller in comparison to competitors like Walgreens Boots Alliance and CVS Health. The broader context reveals a grim scenario with over 900,000 overdose deaths in the U.S. since 1999, with opioids being a significant contributor, as indicated by data from the U.S. Centers for Disease Control and Prevention.

Ford Motor Co's health insurance antitrust suit filed too late, Blue Cross argues

By Mike Scarcella - Blue Cross Blue Shield Association and its Michigan affiliate have asked a U.S. judge to dismiss a lawsuit from Ford Motor (F.N) accusing them of a conspiracy that artificially inflated how much the automaker was paying for insurance premiums and other commercial health insurance services. Read Full Article…

VBA Article Summary

1. Blue Cross' Defense: In recent filings, the Blue Cross defendants have contested Ford's claims, arguing that there is no evidence to suggest that the insurers prevented any other company from selling insurance products. The insurers have further contended that Ford's claims, lodged in a Detroit federal court in May, are largely or entirely beyond the legal time frame permissible for antitrust lawsuits. Michigan's Blue Cross Blue Shield highlighted in its statement that it has transparently operated for many years, making significant investments in the Blue brand within Michigan.

2. Background of the Lawsuit: Ford's lawsuit stems from an extensive antitrust case against Blue Cross, ongoing since 2012. Ford, alongside other notable U.S. corporations, opted not to be part of a $2.7 billion settlement in an Alabama federal court in 2020. This settlement is currently under appeal. There's also a distinct class action lawsuit from healthcare providers that's still active.

3. Ford's Allegations and Blue Cross' Counterpoints: Ford has claimed that Blue Cross entities conspired to restrict competition, depriving Ford of chances to purchase health insurance from potentially cheaper competitors or at free-market prices. They have reportedly spent over $500 million on specific Blue Cross products since 2009 and are now seeking triple damages among other remedies. In response, the Michigan Blue Cross affiliate has defended its unique position as the sole licensee of the Blue Cross brand in the state. Lawyers for the Michigan branch have argued that Ford's complaint of not being able to purchase 'Blue' insurance from multiple providers doesn't constitute a genuine injury. They assert it's merely the outcome of legitimate trademark usage. They've also countered Ford's claims, arguing that Ford hasn't demonstrated how the Michigan affiliate exerts market power on a national scale.

EBRI Finds Increased Use of Certain Medical Services Covered by HSA-Eligible Plans

By Remi Samuels - A 2019 IRS policy change has resulted in 75% of large employers that offer HSA-eligible plans expanding their pre-deductible coverage for medications and services that help manage chronic conditions. There has been an increase in the use of three of seven medical services and prescription medications by enrollees in HSA-eligible plans, compared with usage by enrollees in non-HSA-eligible plans, according to new research from the Employee Benefit Research Institute. Read Full Article…

VBA Article Summary

1. HSA-Eligible Plans and Their Flexibility: In 2019, the IRS issued a notice permitting HSA-eligible health plans (also known as high-deductible health plans) to cover 14 medications and health services used to mitigate the exacerbation of chronic conditions prior to reaching the plan deductible. This has enabled these health plans to incorporate a more flexible, value-based insurance-design, which offers greater coverage for certain medical services.

2. Impact of the IRS Notice on Medical Services Use: The Employee Benefit Research Institute (EBRI) conducted a study to assess the repercussions of the IRS notice on pre-deductible coverage in HSA-eligible health plans. Their research focused on the use of seven specific medical services. Between 2018 and 2021, there was a significant rise in the usage of three specific services (LDL testing, hemoglobin A1C testing, and retinopathy screening) among enrollees in HSA-eligible plans compared to enrollees in plans not affected by the IRS policy change. These tests are crucial for monitoring chronic conditions like heart disease and diabetes. Additionally, there was an increase in the use of specific medications among HSA-eligible plan enrollees.

3. Effects on Consumer Costs and Employer Responses: Despite the expansion of pre-deductible coverage for the 14 services highlighted in the IRS notice, the uptake has been slow and enrollment in HSA-eligible plans remains unaffected. However, a silver lining emerges as enrollees now contribute a smaller portion of the total cost of services. The shift has seen more reliance on copayments and coinsurance instead of deductibles. This shift is particularly crucial since rising out-of-pocket health care expenses have been linked to various challenges, including increased financial stress and health disparities, especially among individuals with chronic ailments and lower income levels. EBRI emphasizes that the movement towards smarter deductibles and flexible plan designs might be the next evolutionary step for health plans in a bid to tackle the increasing health care expenses.

Cigna to exit Missouri and Kansas ACA marketplaces in 2024

By Emily Olsen - A record-breaking 16.3 million people signed up for marketplace plans in 2023, boosted by extended pandemic-era subsidies that protected enrollees from premium hikes, according to the CMS. But insurers say inflation is increasing the cost for medical care and prescription drugs, and they’re requesting a median 6% premium increase next year in a survey from KFF. Though many enrollees receive subsidies and won’t see extra costs, premium increases could grow federal spending on subsidies, according to the report. Read Full Article… 

VBA Article Summary

1. Cigna's ACA Marketplace Changes for 2024: Cigna will reduce its presence in the Affordable Care Act (ACA) marketplace in 2024 by exiting the markets in Missouri and Kansas, as well as withdrawing from two counties each in Arizona and Utah. This comes after the insurer expanded its offerings in 2023, which included introducing plans in Texas, Indiana, and South Carolina. Despite these exits, Cigna will add coverage in 15 North Carolina counties, resulting in health plan offerings across 14 states and 350 counties.

2. Reason for Exiting Certain Markets: A Cigna representative has communicated that the company's decision to pull out of certain markets was based on its inability to offer plans meeting its high standards for quality care, health outcomes, and value “at an affordable price.”

3. Financial Insights and Future Plans: The medical loss ratio, representing the portion of the premium spent on patient care, stood at 81.2% for Cigna in the second quarter of the current year, performing better than what analysts had projected. However, Cigna’s CEO, David Cordani, highlighted in an earnings call that the insurer faced challenges from higher estimated risk-adjustment payments in two states within the ACA individual exchanges. As a result, Cigna sought significant rate hikes in those states for 2024. Despite these challenges, the company remains committed to growing its ACA Marketplace presence in regions where they are confident of delivering quality and affordable healthcare solutions.