Impact Of OBBBA Cuts
Two new analyses describe the looming impacts of the Medicaid and Exchange cuts in the One Big Beautiful Bill Act (OBBBA).
Upcoming statutory limits on providers’ state-directed payments (SDPs) in Medicaid are expected to cost states tens of billions of dollars for state match and lower spending by double that or more. The analysis published in Health Affairs says 17 hard-hit states could see impacts of 10% to 25% of total annual Medicaid spending. The analysis outlined at least $51.8 billion in reductions across 36 states. A proposed rule would expand reductions beyond what is outlined in the OBBBA to all such SDPs.
Federal policy changes and budget cuts are forcing states to scale back Medicaid benefits for immigrants. Because of looming cuts, California, Colorado, Illinois, Minnesota, New York, Washington and the District of Columbia have scaled back state-funded coverage for immigrants. The changes will also have major impacts on revenue of Medicaid-dominant health plans Molina and Centene, among others. Insurers project losing more than $1 billion in Medicaid revenue.
Additional article: https://www.modernhealthcare.com/insurance/mh-molina-centene-state-medicaid-cuts-immigrants/
#medicaid #exchanges #obbba
Growth In Costs, Not Insurer Markups, Drive Increases
A new study published in the JAMA Health Forum says that growth in healthcare spending, not insurer profit margins, drove the vast majority of commercial premium increases over more than a decade. Researchers at Yale University and the University of Wisconsin-Madison analyzed data from 2011 to 2024 for the non-self-insured large group, small group, and individual markets. About 91% of the increase in health insurance premiums from 2011 to 2024 was explained by growth in underlying healthcare spending. Mean insurance premiums across all three market segments grew by $3,143, or 78.4%, from 2011 to 2024. Health spending grew by $2,844. Insurer markups, which the study defined as the combined total of profits and administrative costs, declined as a share of premiums.
In other news, UnitedHealth Group and CVS Health are looking into acquisitions. UnitedHealth Group identified value-based care (VBC) companies and additions for Optum Insight. CVS Health will seek “bolt-on” acquisitions.
Additional article: https://www.modernhealthcare.com/insurance/mh-unitedhealth-cvs-wells-fargo-healthcare-conference/ and https://www.beckerspayer.com/research-analysis/healthcare-spending-drove-91-of-commercial-premium-growth-over-13-years-study/
#cvshealth #unitedhealthcare #healthplans #margins
Health Affairs On Part D IRA Changes
An excellent article in the Health Affairs Forefront Blog on the major changes to the Part D program in the Inflation Reduction Act of 2022. It is a great read and spot on, showing how the changes theoretically reduced costs for consumers but actually became an unfunded mandate on Part D plans by shifting costs dramatically.
While the MedPAC associated authors had to be diplomatic, I don’t – it was a terrible, politically motivated policy by the then-Democratic majority that has pushed the standalone Part D (PDP) plans to instability and undermined Medicare Advantage (MA) Part D plans.
#ira #partd #medicareadvantage #pdps
— Marc S. Ryan
