October 15, 2024

Mixed Signals On Medicare Advantage Open Enrollment

The Medicare Advantage (MA) enrollment season officially kicked off today.

While the Kaiser Family Foundation (KFF) finds that MA plans are largely stable, it does note that there are some reductions impacting consumers. Some beneficaries may be moved automatically to other plans by their current insurers. Others will have to make an affirmative choice. KFF promises to have a full review but appears to be putting the same spin on things as the Centers for Medicare and Medicaid Services (CMS).

Others are saying that as many as 2 million will be displaced compared with the usual 100,000 each year. We covered some of the displacement yesterday for both MA and standalone Part D (PDP) plans. CNN correctly notes the displacement, citing an Oliver Wyman analysis that comes close to the 2 million number above. Oliver Wyman says more than 1.8 million MA members, or roughly 8% of those in non-group, non-special needs plans, are enrolled in policies that won’t be offered in 2025. It notes that about 1.3 million of them are currently enrolled in $0 premium plans. CNN also discusses higher drug deductibles. The Street also covers increases in Part D costs.

Becker’s points out some of the challenges: MA will shrink in around half of states, while options will stay the same or grow in the other half. In 22 states and Washington, D.C., there will be fewer MA plans available in 2025. At least 10 insurers exited MA markets for 2025 coverage. Nearly 30 health systems dropped some MA contracts for 2025.

Additional articles: https://www.kff.org/policy-watch/2025-medicare-advantage-plan-choices-are-stable-following-years-of-steady-growth/ and https://www.cnn.com/2024/10/14/health/medicare-advantage-plans-open-enrollment-2025/index.html and https://www.thestreet.com/finance/medicare-prices-set-to-jump-for-average-americans-heres-how

#medicareadvantage #healthplans

https://www.beckerspayer.com/payer/medicare-annual-enrollment-begins-10-notes.html

United Underwhelms Investors In Q3 Report

While UnitedHealth Group met expectations, it underwhelmed investors with its outlook and sent its stock tumbling. It said headwinds in Medicare Advantage (MA) and Medicaid would continue in 2025.

United reported $6.06 billion in profit for the third quarter of 2024, up from $5.8 billion in the same quarter in 2023. But United brought in $8.9 billion in profit through the first three quarters of the year, down by close to half from the $16.9 billion reported in the same period in 2023. Optum revenues were up as were PBM revenues. Cyberattack costs are also up to $2.5 billion. Contrary to Humana and CVS, United is bullish on MA. Medical costs also were up to about 85.2%.

Given its size, United is a great barometer for trends. Here are some reported by the company:

  • Provider coding intensity is up
  • Medicaid costs and revenue are mismatched
  • Remaining Medicaid enrollees have higher acuity
  • Part D costs are rising due to the Inflation Reduction Act
  • Drug maker marketing is driving up costs
  • Medical expenses have increased

Additional articles: https://www.modernhealthcare.com/insurance/unitedhealthcare-andrew-witty-medicare-advantage and https://www.modernhealthcare.com/finance/unitedhealth-group-investor-relations-earnings-change-healthcare-cyberattack and https://www.healthcaredive.com/news/unitedhealth-q3-2024-earnings-change-cyberattack/729874/ and https://www.beckerspayer.com/payer/unitedhealth-posts-6-1b-profit-in-q3.html and https://www.beckerspayer.com/payer/unitedhealth-sees-rising-costs-from-inflation-reduction-act-10-notes.html

(Some articles may require a subscription.)

#unitedhealthcare #medicareadvantage #medicaid #managedcare

https://www.fiercehealthcare.com/payers/unitedhealth-beats-street-6b-q3-profit

Blues Settle Another Anti-Competition Lawsuit

Blue Cross Blue Shield plans and its association agreed to a $2.8 billion settlement to resolve yet another legal anti-competition lawsuit. In this case providers claimed the insurers colluded to prevent competition and lower reimbursements. In another settlement, the Blues agreed to slightly crack the door on employer coverage competition. There is little question that the Blues plans and associations drive prices up in the market, not down. Trial lawyers get $700 million, $100 million for notification, and $1.2 billion for compensation.

Additional article: https://www.fiercehealthcare.com/payers/blues-plans-agree-28b-settlement-provider-class-action-suit

(Some articles may require a subscription.)

#bluesplans #bcbsa #antitrust #providers

https://www.modernhealthcare.com/insurance/bcbsa-antitrust-lawsuit-settlement-alabama

Walgreens’ Bleeding Continues

Walgreens reported a loss of $3 billion in the fourth quarter and plans to close 1,200 stores over the next three years. The turnaround does not appear to be going terribly well. The retail chain’s woes continue as Rite Aid emerges from bankruptcy and CVS Health is discussing breaking up its empire.

The company also took a charge for its home-care company CareCentrix investment, following an earlier charge for its investment in VillageMD primary care.

Additional articles: https://www.healthcaredive.com/news/walgreens-close-1200-stores-net-loss/729895/ and https://www.modernhealthcare.com/finance/walgreens-closing-stores-earnings-call-investor-relations-tim-wentworth and https://www.modernhealthcare.com/providers/walgreens-tim-wentworth-villagemd-earnings

(Some articles may require a subscription.)

#walgreens

https://www.fiercehealthcare.com/retail/walgreens-plans-close-1200-stores-2027-part-ongoing-turnaround-strategy

— Marc S. Ryan

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