Retiree Coverage Dropping Dramatically; Employers Rely More On Medicare Advantage
The Kaiser Family Foundation (KFF) finds that the number of employers providing retiree coverage is dropping dramatically. Among large employers that offer health benefits to active workers, the share offering retiree coverage has dropped from 66% in 1988 to 24% in 2024. The trend will create huge new affordability issues for the nation as aging continues.
Still, that covers 14.5 million Medicare beneficiaries with important secondary coverage to fill in the big holes in the traditional Medicare program. In order to continue coverage and limit costs, employers more and more are turning to wrapping the retiree benefit around Medicare Advantage (MA), known as EGWPs. About 56% of large employers offering retiree health benefits in 2024 offer coverage to at least some retirees through an MA plan, more than double the share in 2017 (26%). About 53% require enrollment in MA. A survey of employers suggests the trend will increase.
#medicareadvantage #egwps #employers
Traditional Medicare Enrollees Pay More Out of Pocket For Drugs
This Health Affairs Forefront Blog does a good job at explaining how traditional Medicare fee-for-service (FFS) enrollees pay much more for drugs than Medicare Advantage (MA) enrollees because they have to have two or three policies (including Medicare Supplement and a standalone Part D plan or PDP) that are not coordinated or integrated. The MA program has integrated coverage.
As well, those in traditional Medicare generally pay more based on list rather than net prices. Last, the authors note that the Inflation Reduction Act’s Part D changes that are unfunded will cost most recipients more not less. I have argued the Part D changes could seriously undermine the PDP program to the point it may be unsustainable in the future.
(Article may require a subscription.)
#medicare #medicareadvantage #partd #pdp
https://www.healthaffairs.org/content/forefront/medicare-causing-patients-overpay-prescription-drugs
Health Insurance Business Increasingly Challenging And Less Lucrative
Interesting article arguing health insurance is becoming far less lucrative. In Q3, the seven major publicly traded insurers’ medical loss ratios (MLRs) increased an average of 3.3 percentage points year over year. This is a signal that medical costs are rising and revenue is not keeping pace, especially in government programs. Operating margins were down in Q3 for five of the seven companies.
Insurers could still be challenged into 2025 with rate headwinds in both Medicare Advantage (MA) and Medicaid. Insurers hope for better MA rates from the Trump administration. Trump is also said to want to rely on private healthcare delivery much more. But the greater friendliness does not mean that MA plans will not see any reforms or greater scrutiny. Further prior authorization reforms and transparency requirements could occur.
Additional article: https://insidehealthpolicy.com/health-insider/health-care-experts-predict-fewer-ma-restrictions-under-trump-while-vaccine-food
(Some articles may require a subscription.)
#medicareadvantage #medicaid #insurers #healthplans #margins
https://www.healthcaredive.com/news/health-insurance-less-lucrative-q3-medicaid-medicare/732418
CVS Health Adds Members To Its Board
Showing how dire its financial position is and the growing alarm of investors, CVS Health named Glenview Capital Management founder Larry Robbins as well as three others to its board today. Glenview is an activist firm forcing change at CVS. One of the three others includes Leslie Norwalk, a former Centers for Medicare and Medicaid Services (CMS) high-ranking official.
While Glenview owns about 1% of outstanding shares in CVS, CVS is about $700 million of Glenview’s given $2.5 billion hedge fund and of $5.6 billion in assets overall under management.
Additional article: https://www.fiercehealthcare.com/payers/cvs-glenview-capital-reach-deal-adds-4-board-members
(Some articles may require a subscription.)
#cvshealth #aetna #medicareadvantage
https://www.modernhealthcare.com/people/cvs-health-board-glenview-capital-management-larry-robbins
Home Health Consolidation To Occur In 2025
Acquisitions in the home care industry are poised to take off in 2025 due to lower interest rates, a possible better antitrust environment, financial challenges faced by smaller firms, and the need to utilize lower cost services in healthcare.
(Article may require a subscription.)
#homecare #healthcare
https://www.modernhealthcare.com/providers/aveanna-addus-homecare-pennant-group-mergers-2025
— Marc S. Ryan
