Cigna-Humana Possible Merger Explained
With news that the Cigna-Humana merger could be back on, financial analysts are reviewing what it could mean for healthcare. The merger looks to be very complimentary, with very little overlap. A combined company would have a $121 billion market capitalization, still tiny compared with UnitedHealth Group’s $528 billion.
On the insurance side, Cigna is a major commercial provider with 16.1 million members. Humana had fewer than 600,000 commercial customers and is closing this line down.
Humana is the second-largest Medicare insurer with 8.8 million members (Medicare Advantage and standalone Part D PDP). It has about 1.2 million Medicaid lives. Cigna is selling its Medicare line to Health Care Service Corporation (HCSC, a big Midwest and South Blue). This began last year when the first talks were ongoing and continued after they broke down. Cigna CEO David Cordani felt too much would have to be invested to fix Cigna MA’s poor financial standing. Cigna has no Medicaid after selling its Texas plan some years ago.
Express Scripts is the third-largest PBM, while Humana’s is a minor player.
Thus, the move could attract less antitrust scrutiny than past deals. But analysts also say that the merger’s completion may hinge on the presidential election outcome. A Harris administration is likely to be activist on mergers of any kind. A Trump administration would be laxer.
Additional article: https://www.bloomberg.com/news/articles/2024-10-21/cigna-humana-merger-plan-may-hinge-on-election-analysts-say
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#mergers #consolidations #manda #antitrust #humana #cigna #medicareadvantage #medicaid #managedcare #employercoverage
https://www.modernhealthcare.com/mergers-acquisitions/cigna-humana-deal-antitrust-medicare-advantage
Some Investors Question CVS’ Future
Wall Street analysts and some investors worry whether CVS Health has the experienced leadership to right its financial ship. They indicate that new CEO David Joyner does not have experience at a health plan and the insurer is already struggling with leadership gaps after ousting the insurance leader prior to the recent shakeup at the top of the company. On the positive side, Joyner was responsible for turning around the pharmacy benefits manager business in the early 2000s.
Its overall business is about a third insurer, PBM, and pharmacies/other related assets. So far CVS will close 271 retail stores and sell non-core assets.
Newly named Executive Chairman Roger Farah addressed the idea that the company could be broken up, saying that right now the company intends to turn performance around instead of breaking it up. But I think that could change depending on success.
#cvshealth #aetna
Elevance Health Studying Options On Star Ratings Drop
Elevance Health is weighing in on poor Star scores in 2025 just like United Healthcare and Humana, which have already sued the Centers for Medicare and Medicaid Services (CMS) over their 2025 ratings. Elevance sued and won a suit on 2024 ratings. It will see its Star ratings drop again in 2025 about as much as United, but not as much as Humana. Elevance CEO Gail Boudreaux said the insurer is “considering all of our options.”
Like Humana, Boudreaux notes that it improved its performance across 60% of Star measures, but still saw ratings decline. She specifically notes the rise in cut points. The drop in the overall percentage of members in 4 Star or greater plans was tied to one contract missing a 4-Star rating by 0.0004.
Elevance said it has appealed to CMS.
#stars #elevancehealth #humana #unitedhealthcare #cms
Medicaid Managed Care Plans Want Feds To Scrutinize State Rates
In light of a huge mismatch between Medicaid managed rates and the cost of the population due to the removal of millions from the rolls, Medicaid managed care plans are asking the Centers for Medicare and Medicaid Services (CMS) to ensure that actuarial soundness regulations are met and that the agency review and certify adequate state Medicaid capitation rates. The effort is led by the Association of Community Health Plans (ACHP) and the Alliance for Community-Affiliated Plans (ACAP).
(Article may require a subscription)
#medicaid #managedcare #rates
Medicare Advantage Prior Authorization Reforms Proposed
The recent report from Democrats on the Senate Permanent Subcommittee on Investigations is urging the Centers for Medicare and Medicaid Services (CMS) to require Medicare Advantage (MA) insurers to provide detailed prior authorization (PA) data and audit insurers with unusually high denial rates. In addition, it wants CMS to ensure artificial intelligence (AI) and predictive technologies do not overly influence human reviewers’ medical decisions.
I previously said the report was sensationalistic and that the PA denial rates cited are not unreasonable for expensive services. But it shows what is in store from Capitol Hill, especially if Democrats maintain the Senate majority. Either way, we can expect some kind of reform bill to pass.
(Article may require a subscription.)
#priorauthorization #medicareadvantage
Exchanges To See Maximum Costs Increase Dramatically
The federal government announced that the maximum annual cost-sharing limitation for Affordable Care Act (ACA) Exchange plans will increase by 10.3% in 2026. The 2026 maximum for self-only coverage will be $10,150 ($20,300 for family coverage), up from $9,200 for self-only ($18,400 for family) in 2025.
Due in part to a return of inflation and utilization in healthcare, we are seeing costs in the program and premiums increase dramatically after years of relative stability. Much of the 2025 premium hike will be eaten by premium subsidies by the government. But those who do not have access to such subsidies will have an even tougher time affording coverage.
(Article may require a subscription.)
#aca #obamacare #exchanges #coverage
https://insidehealthpolicy.com/daily-news/aca-plans-max-out-pocket-costs-jump-10-2026
Washington State Long-Term Care Program Faces Going Bust If Referendum Passes
Washington is the first state to create a public program to plan for the crippling cost of long-term care. In the novel program that started in 2019, a public fund collects 0.58% on every paycheck for working Washingtonians. In return, residents can access up to $36,500 for long-term care needs once they retire. The state is also working on partnering with private insurers to provide supplemental coverage options to enliven the very small long-term care insurance market.
But a referendum on the state ballot in November would make the program optional. That would effectively kill the program by denying it of needed funding to ensure enough dollars to cover costs.
#longtermcare #ltss #coverage #aging
— Marc S. Ryan
