In my last blog, I gave you my healthcare year-in-review for 2023. After that, as I always do each year, I play Nostradamus to prognosticate about what will happen in the next twelve months in the world of healthcare. Despite my Irish last name, I do have French blood (well, 50% French Canadien, so I count it). But I don’t claim to be an oracle or seer like our 16th century physician, apothecary, and astrologer friend. I do take a page from Nostradamus, though, in that my healthcare predictions for 2023 (not really prophecies) will be sometimes deliberately vague (they include a lot of mays, coulds, shoulds, and possibles) so as to amass a reasonable record for those tracking and putting together my forecasting report card for the history books.
Here is hoping my crystal ball is clear and not cloudy, but don’t hold me to any of this; I am simply your intrepid Healthcare Labyrinth blogger having a little fun.
2023 Prediction Report Card
I had one high profile miss when I said that Medicare Advantage (MA) would grow by 10 percent or more. As we know, growth slowed in 2023 considerably. But I did get it right when I said that MA would hit 50% of all Medicare beneficiaries.
I was right, too, when I predicted the following:
- There would be mixed performance in MA
- One or more insurtechs would be in trouble
- Provider groups would undermine UM across the board and in MA
- The Timely Access for Seniors Act might die again due to costs
- MedPAC would continue MA reform and Congress could begin hitting rates – I got this right partially, as MedPAC continued its drum beat and the Centers for Medicare and Medicaid Services (CMS) refined the risk adjustment formula to address some overpayment concerns.
- There would be another Alzheimer’s drug approved
- Millions would lose Medicaid coverage
- Exchanges would grow
- Regulatory reforms in the Exchanges to promote growth and simplify the program
- Continuous eligibility and other reforms in Medicaid
- More Medicaid expansions in states
- Continued value-based care growth
- More messiness with the No Surprises Act
- The Medicare drug price negotiations would begin implementation
- CMS would shine a light on prior authorization, network adequacy, and marketing – its proposed 2024 and 2025 rules did this.
- Interoperability, along with electronic prior authorization and data-sharing between providers and plans, would continue to be a focus
- Price transparency execution on both plans and providers, with fines levied for non-compliance
- A focus on provider mergers and greater authority over stopping them
- Further integrating Medicare Special Needs Plans (SNPs) with Medicaid – this was in the 2025 rule
- Star ratings refinement – we saw this in numerous changes for 2024 and beyond
My record was more cloudy on some potential healthcare bills passing, which did not happen due to the speakership debacle and overall disorder in Congress. These misses were many. Despite my years in politics, I failed to see the utter insanity of Capitol Hill.
All in all, our 16th century friend would be impressed I think.
2024 Crystal Ball
Overall Healthcare
Healthcare utilization and inflation will continue to return to pre-pandemic levels. Overall, inflation should be moderate, but healthy. Insurers should generally meet targets, but some could continue to struggle in Medicare Advantage (MA).
Health plans will continue to focus on administrative and medical expenses, which could mean further job cutbacks. It is possible Cigna will shed its MA line if the price is right. Insurtechs will continue to have mixed performance.
The uninsured rate will begin to inch up (perhaps by several million) because of Medicaid redeterminations eliminating eligibility in Medicaid and lower uptake than needed in children’s coverage, the Exchanges, and employer healthcare.
Health plans will continue to reduce emphasis on prior authorizations (PA) in favor of care management and provider education/collaboration. CMS and health plans will continue to push value-based care (VBC) payments hard.
While digital health and AI have seen bankruptcies of late, health plans should invest here, though there will be major attacks on the policy and legal front in the use of AI with PA and claim denials. Plans will begin to get serious on interoperability given coming deadlines.
Congress and the administration may open up investigations into health plan gaming of the minimum medical loss ratio (MLR) requirements across lines of business.
Hospitals and providers may continue to struggle financially, even as utilization returns. While private equity investment here will seek to return to pre-pandemic levels, it could be hobbled by a new aggressive anti-trust focus by the Biden administration. Hospitals may also face pressure from Congress on tax-exempt status. Physicians will see some but not all of their Medicare payment cuts reversed.
Given the positions staked out by rightist Republicans, there is the likelihood that a government shutdown could occur, at least for a short time. There is little shot at a bipartisan CR in the House given the speaker ouster earlier. And I don’t see the Senate immediately going along with the House Republican demands.
Sometime in 2024, transparency and reform bills should get passed and include the beginning of site neutral payments in Medicare (on Part B drug administration), a ban on spread pricing for PBMs, and more rigorous reporting requirements for hospitals, health plans and PBMs on the price front. Biosimilar promotion and education legislation will pass as well.
PBM relationships and drug pricing will continue to reform. Transparent pricing should take greater hold with traditional PBMs, the startups should gain traction with their transparency agenda, and Mark Cuban’s Cost Plus Drug (along with similar entities) will continue to innovate and transform beyond generics.
Insulin prices will continue to drop and forestall congressional action.
The various legal actions against the Inflation Reduction Act’s Medicare price negotiations will fail and implementation will progress.
In addition, the Supreme Court will issue a ruling that will significantly contract the ability of federal agencies to regulate via rules.
Medicare Advantage
Congress will finally begin to look at Medicare insolvency and will make perceived over-payments to MA some part of their solution. MA enrollment will continue to be well below double-digit percentage growth and may struggle to hit a 7% growth rate. But Special Needs Plans (SNPs) will continue to show explosive growth.
MA plans will see a very tough regulatory and policy climate. Rates will again be tight with the new risk adjustment phase-in. Program audits will get tougher, especially due to the new PA limitation rule. Other regulatory focuses will be on network adequacy, SNPs, and marketing. Provider groups will press hard on AI claims denials and the PA rule. Plans will continue to struggle with Star performance overall.
Various investigations will ensue from CMS and the Health and Human Services Office of Inspector General (HHS OIG). CMS will fight hard to implement the risk adjustment data validation (RADV) rule, but likely will be stymied by a federal court.
Medicaid
We could see another state expand Medicaid under the Affordable Care Act (ACA) in 2024. Redeterminations will continue to mean Medicaid terminations, even with aggressive action by CMS to sanction states and hold them accountable.
CMS and states will continue to push various eligibility expansions for kids and other population groups under core Medicaid rules. Social determinant waivers will continue to be popular.
ACA Exchanges
The ACA Exchanges nationwide will hit over 19 million enrollees. A federal appeals court in New Orleans could overturn its partial stay on a lower court determination that the ACA preventive services mandate is unconstitutional. This would move the issue to the Supreme Court.
Donald Trump and Ron DeSantis will not propose anything that is remotely a credible alternative to the ACA, which they want to repeal. Their proposals, if even made, will be a mish-mash of previous policies that were found to increase the uninsured rate, not reduce it.
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— Marc S. Ryan
