By Taylor McDonald – CSG Actuarial – May 7, 2019
CSG Actuarial, with information from the NAIC and other sources, reports total earned premiums in the Medicare Supplement market in 2018 totaled $32.4 billion, a 4.9% increase over 2017. The total Med Supp lives covered in 2018 increased to 14.05 million, up 3.9% from 2017. The top 12 carriers in terms of 2018 Medicare Supplement premiums were:
The 2018 overall Med Supp market loss ratio of 79.0% reflects a continued trend in the market of the overall loss ratios creeping back up towards “Pre-Modernized” levels of around 80%.
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A number of Democratic proposals call for eliminating private health insurance and replacing it with a universal Medicare plan, claiming it would help reduce administrative inefficiencies in the health-care system. Most recently, Sen. Bernie Sanders of Vermont unveiled a bill that would create a government-run system to provide health insurance for all Americans. Freshman Rep. Alexandria Ocasio-Cortez is pushing a similar plan.
Wichmann, who rarely discusses politics, told investors on a post-earnings conference call Tuesday such measures would "surely jeopardize the relationship people have with their doctors, destabilize the nation's health system and limit the ability of clinicians to practice medicine at their best."
"And the inherent cost burden would surely have a severe impact on the economy and jobs — all without fundamentally increasing access to care," he added.
The executive noted that health costs have grown less quickly than overall inflation for 16-straight months, saying "it has lessened considerably due to better management of price inflation and earlier and more effective management of care in lower cost settings."
Despite concerns from UnitedHealth, public support for a single-payer system has grown. According to a survey from the Kaiser Family Foundation last month, 56% of respondents supported a national health plan in which all Americans would get insurance from a single government plan, versus 39% who said they oppose it.
Health care has been the worst-performing sector in the stock market this year, rising by just 4.17% as of Monday's close, significantly lagging the broader market indexes. The Dow Jones Industrial Average is up 13.35% over the same period, and the S&P 500 is 16.12% higher.
The biggest decliners have been from insurers, which are under threat from "Medicare for All" proposals. Investors are also watching the Trump administration's legal challenge to former President Barack Obama's signature health insurance law, the Affordable Care Act.
A federal appeals court in New Orleans said last week that it will hear arguments in July on a lawsuit backed by President Donald Trump to overturn Obamacare. Dismantling the health-care law would lead to 32 million more uninsured people in the U.S. by 2026, according to an estimate from the Congressional Budget Office.
Earlier Tuesday, UnitedHealth reported first-quarter earnings and revenue that beat Wall Street's expectations. It was driven by strength in its pharmacy benefit management business and higher enrollment for its health plans.
The industry bellwether, which is the first health insurer to report quarterly results, also raised its full-year adjusted earnings forecast to between $14.50 and $14.75 per share from its prior projection of $14.40 to $14.70 a share.
Image: Justin Sullivan | Getty Images
By Shelby Livingstone – ModernHealthCare – April 3, 2018
UnitedHealthcare and the American Medical Association said Tuesday they want to expand the set of ICD-10 diagnostic codes to include more specific diagnoses related to a person's social determinants of health.
The hope is that these codes would allow clinicians to document patients' social determinants in a standardized way, which would allow them to better tailor care plans or refer patients to community organizations that could meet those social needs.
"If someone has a transportation barrier and they are unable to get to their doctor's appointment or to pick up their prescription, today in the ICD-10 codes, there isn't a way to diagnose that," said Sheila Shapiro, senior vice president for national strategic partnerships in UnitedHealthcare's clinical services team. "There is no common way for the system to communicate around not only that barrier, but the solutions that can be brought to assist that individual."
Today, a clinician may use medical code that identifies a patient as low-income, but that's as granular as it gets. UnitedHealthcare's proposed set of codes would more specifically identify the person as unable to pay for transportation for medical appointments of prescriptions, for instance.
That would then tell the healthcare provider they should order prescriptions mailed to the home or possibly provide some form of transportation, explained Dr. Tom Giannulli, chief medical officer at the AMA's Integrated Health Model Initiative, which is supporting UnitedHealthcare's proposal.
Expanding diagnostic codes related to social determinants of health is another step in the healthcare industry's journey to address those factors outside of the doctor's office that often have a greater impact on outcomes than clinical care. In recent years, social determinants have become a buzzword in the healthcare industry as insurers and providers have looked for new ways to control health spending. Now insurers and health systems are moving beyond initial pilot projects to address those factors in a sustainable, scalable way.
The existing ICD-10 family of diagnostic and procedural codes includes 11 codes that identify social and environmental barriers to a patient's care, but they are broad categories. UnitedHealthcare's proposal would add 23 more codes to that list. Some of those codes would indicate a patient's inability to pay for prescriptions, inadequate social interaction, or fears about losing housing.
Trenor Williams, the founder of Socially Determined, a company that uses data to help organizations build programs to address their patients' social needs, said expanding the codes to include more specific diagnoses is a good start and an opportunity to better document social risk factors among a population.
It also could prompt more discussion among stakeholders about providing reimbursement that is risk-adjusted based on a patient's social determinants, Williams said. Some groups, including the National Academy of Medicine and the Medicare Payment Advisory Commission, have explored the feasibility of adjusting Medicare payments for socioeconomic status. Congress has also commissioned reports on the subject. But so far Medicare payments remain unadjusted for social factors.
UnitedHealthcare presented its recommendation to expand the codes at the ICD-10 Coordination and Maintenance Committee meeting in March. Following a 60-day comment period, the committee will determine whether to act on UnitedHealthcare's recommendation in the early summer. The new codes would be available to use as early as 2020, if the committee approves them, Shapiro said.
Likely return of the health insurance tax to impact MA profits
By Susannah Luthi – ModernHealthCare – March 1, 2019
Congress appears unlikely to delay the health insurance tax next year. If that happens, Medicare Advantage plans would see the biggest impact, analysts and insurers say.
On Wednesday, a bipartisan group of House lawmakers introduced a suspension of the tax, known as the HIT, through 2021. The tax was in place for 2018, suspended in 2019 and is due to take effect again in 2020.
But as House lawmakers unrolled their proposal for another delay, senior congressional staff from both chambers and parties said they don't think it's likely to move before insurers start setting their ACA exchange rates next year.
One senior GOP aide said it's unclear how any of the smaller tax delays will get done, "let alone the big spending health care extenders."
Some insurance executives have been bracing for the possibility they won't get their delay. But they also haven't given up on urging Congress to step in and eliminate the tax or continue the moratorium from 2019.
In a quarterly earnings call in January, UnitedHealth Group CEO David Wichmann warned that the return of the HIT would increase healthcare costs by a total $20 billion for 142 million people.
"That causes the average senior couple to see their premiums raised by $500 per year and for families with small business coverage by about the same amount, around $480 or so per year," Wichmann said. "Our view is that outcome is unacceptable because healthcare already costs too much."
S&P analyst Deep Banerjee said a return of the HIT wouldn't necessarily affect insurers' profit margins for Affordable Care Act individual market exchange plans, where companies can pass the fee on to their customers through higher premiums.
However, he said, insurers are less likely to take this approach in the more lucrative Medicare Advantage market where competition between plans is so tight they don't want to risk losing enrollees.
The push for the HIT delay comes after the eight largest publicly traded insurance companies reported more than $21 billion in net income for 2018 on top of revenue of $718 billion, according to analysis by Modern Healthcare. Despite the HIT being in effect in 2018, insurers' earnings benefited from low medical cost trends, lower utilization of healthcare services, declining pharmacy costs and a lower tax rate, according to a report released Thursday by A.M. Best.
In a sign that Medicare Advantage insurers are worried about the HIT's potential impact on their markets, Humana CEO Bruce Broussard told investors earlier this month the HIT moratorium allowed Humana and the rest of the industry to make significant investments in benefits and drive better health outcomes, but its return will reverse that. "The return of the HIF in 2020 will negatively impact seniors across the nation in the form of reduced benefits and/or higher premiums," he said.
Broussard, during the company's first earnings call for 2019, said this is driving their lobbying push.
"We are working with partners to urge Congress to take legislative action to repeal the HIF for 2020 and beyond, recognizing that there is a sense of urgency given the rapidly approaching deadline for submitting bids for 2020 Medicare Advantage offerings," Broussard said.
On the flip side, UnitedHealth CFO John Rex in January indicated that the company is so diversified it's unlikely to feel a financial squeeze, warning that instead the tax would add to the cost burden of the insured.
"I'd be remiss to diminish $2.6 billion of our customers' funds just having been paid for the health insurance tax," Rex said. "That's still a very significant number for any company, I would say, and a burden for our customers."
In terms of the HIT's impact on premiums, Oliver Wyman Actuarial Consulting last year projected a likely increase of just over 2% annually. The firm predicted the biggest increase for Medicare Advantage — $241 per MA enrollee versus a $196 increase per person in the ACA individual market.
A senior Democratic aide said while there's been preliminary discussions on the staff level, the legislation doesn't seem to have a good chance of a House floor vote anytime soon.
And Rep. Earl Blumenauer (D-Ore.), who sits on the House Ways and Means Committee's tax policy and health panels, said this is partially because all the insurance taxes are figuring into the committee's broader discussion over where they want to go with taxes.
"For me, I don't think it's a good idea to be spun out on individual details until we've heard the big picture," the congressman told Modern Healthcare.
"There's a big agenda in terms of trying to deal with tax issues, and I think you don't want to deal with these things piecemeal until we find out where we're at, because they all interrelate," he added.
Reps. Ami Bera (D-Calif.), Josh Gottheimer (D-N.J.), Jackie Walorski (R-Ind.) and Kenny Marchant (R-Tex.) led the House proposal to delay HIT through 2021. Sens. Cory Gardner (R-Colo.), Jeanne Shaheen (D-N.H.), John Barrasso (R-Wyo.), Doug Jones (D-Ala.), Tim Scott (R-S.C.), and Kyrsten Sinema (D-Ariz.) led the Senate version in January.
Walgreens Partnership Boosts Humana's Medicare Enrollment
By Bruce Jepsen – Forbes – February 7, 2019
Humana says its joint venture with Walgreens Boots Alliance is helping boost enrollment in Medicare Advantage, the fast-growing privately administered health coverage for U.S. seniors.
Humana reported a 9% increase in Medicare Advantage membership the health insurer attributed to physicians at more than 230 clinics including two sites inside Walgreens stores. It’s the latest sign showing the early stages of a joint venture between Humana and the nation’s largest drugstore chain is working and could be expanded beyond a pilot in the Kansas City market.
"Our 233 owned, joint ventured and alliance clinics, the majority of which are payer agnostic, including our two 'Partners in Primary Care' clinics inside Walgreens stores experienced positive results in the annual election period," Humana CEO Bruce Broussard told analysts Wednesday during the company's fourth quarter earnings call. "Humana MA membership grew over 9% in these clinics in the (annual election period) excluding the more mature Conviva clinics."
Humana, which has invested hundreds of millions of dollars acquiring and partnering with medical care providers in recent years, said its relationships helped it take Medicare Advantage market share away from rival insurers. Humana said it expects 2019 individual Medicare Advantage membership growth of “375,000 to 400,000 members, representing 12% to 13% growth,” the insurer reported Wednesday as part of its fourth-quarter 2018 earnings release.
Walgreens and Humana last year opened “senior-focused primary care clinics” inside drugstores as a way to complement Walgreens pharmacy services and Humana’s Partners in Primary Care centers that opened last year in Kansas City. The effort is designed in part to keep people out of the more expensive hospital setting and make sure Medicare patients have their care more closely monitored by Walgreens pharmacists and physicians in Humana’s health plan networks.
The two companies think they can do a better job of reaching patients who visit Walgreens retail locations and making sure they get better care upfront before they get sick. When the partnership was announced, Walgreens and Humana called it “a senior-focused neighborhood approach to health that brings together primary care, pharmacy, in-person health plan support and other services for Medicare beneficiaries.”
The Medicare Advantage growth is key for Humana, which is in a competitive battle with rival insurers like Aetna, UnitedHealth Group and Cigna, looking to tap into a market of more than 10,000 baby boomers aging into the Medicare population every day.
Medicare Advantage plans contract with the federal government to provide extra benefits and services to seniors, such as disease management and nurse help hotlines, with some even providing vision and dental care and wellness programs. CMS is changing regulations to allow Medicare Advantage plans to provide broader coverage in the future, which is also expected to boost enrollment. L.E.K. Consulting has projected Medicare Advantage enrollment will rise to 38 million, or 50% market penetration by the end of 2025.
Humana ended 2018 with 3.06 million individual Medicare Advantage members, which was up 7% from 2.86 million as of Dec. 31, 2017.
Industry support gathers for expanding MA benefits in 2020
By Amy Baxter – HealthExec – February 5, 2019
Since CMS proposed expanding supplemental benefits for Medicare Advantage for the 2020 plan year at the end of January, several industry groups have voiced their support, seeing opportunities to improve care for individuals with chronic illnesses and lower costs.
The proposal allows MA plans––which are private health insurers that contract with Medicare to provide all healthcare services under original Medicare––more flexibility to design benefits centered around specific chronic conditions. CMS previously expanded supplemental benefits for the 2019 plan year to include services such as in-home care, which can keep older adults out of acute care settings and improve health and wellness.
The new expansion, if finalized, would enable plans to cover more benefits that directly address social determinants of health, such as home modifications, transportation and meals. For people with chronic conditions, addressing these issues can prevent or delay more serious health events. The benefits would also extend to those affected by opioid addiction seeking treatment.
“Meeting the needs of patients with chronic disease requires a team-based approach to care,” president and CEO of the American Medical Group Association (AMGA), Jerry Penso, MD, MBA, said in a statement following the proposal. “This also may include services that traditionally were not thought of as healthcare-related, including ones that deal with socioeconomic barriers to care. That is why AMGA is supportive of CMS’ effort to provide flexibility in how Medicare Advantage plans in order to help support the total needs of a patient by, for instance, ensuring their nutrition and transportation needs are met.”
The expanded benefits could help attract more Medicare beneficiaries to MA plans if plans include them in their 2020 bids. Over the next several years, MA enrollment is expected to significantly rise. In 2019, enrollment is anticipated to reach an all-time high of 22.6 million, or 36.7 percent of all Medicare beneficiaries, according to CMS.
With this in mind, Matt Eyles, president and CEO of association group America’s Health Insurance Plans (AHIP), is taking a close look at the proposal and its potential impact.
“We appreciate the ongoing bipartisan commitment from both Congress and the Administration to protect the Medicare Advantage program — ensuring its long-term stability, so that it can continue to improve seniors’ access to quality, affordable health care that meets their individual needs,” he said in a statement. “We will continue to review the advance rate notice carefully and look forward to participating in the comment period.”
Better Medicare Alliance, which advocates for MA through healthcare policy and research, also plans to comment on the proposal and voiced stronger support for the expansion of the supplemental benefits to people with chronic illness and those affected by opioid addiction.
“We are encouraged by CMS’ proposals to allow Medicare Advantage plans and providers greater flexibility to meet the needs of chronically ill beneficiaries with the expansion of supplemental benefits,” BMA President and CEO Allyson Y. Schwartz said in a statement. “Evidence has shown that beneficiaries in Medicare Advantage experience lower rates of opioid use. CMS’ proposals will build on this success by increasing access to effective treatments for opioid addiction and promote non-opioid therapies available in Medicare Advantage.”
Health insurers are reporting unprecedented growth in the number of seniors flocking to private Medicare Advantage plans amid talk of a single payer government-run approach that could uproot such coverage.
The same week U.S. Sen. Kamala Harris (D-California) made news with her support for “Medicare for All,” insurers Anthem and Cigna reported strong growth from Medicare Advantage, private coverage sold via contracts with the federal government.
Anthem’s Medicare Advantage enrollment jumped by 35% to more than 1 million at the end of 2018 compared to 746,000 in the fourth quarter of 2017, the operator of Blue Cross and Blue Shield plans reported last week. “Our individual Medicare Advantage business is on track to achieve our mid-double digit growth target,” Anthem CEO Gail Boudreaux told analysts during the company’s fourth quarter earnings call last week. “In total, we estimate our Medicare Advantage growth will exceed 20% by the end of 2019.”
Meanwhile, Cigna reported Friday that its Medicare Advantage enrollment was up one percent to 436,000 from 432,000 and UnitedHealth Group ended 2018 with 4.9 million Medicare Advantage enrollees, which was up nearly 12% from 4.4 million at the end of 2017. Other insurers including Aetna, which is now part of CVS Health, are expected to report higher Medicare Advantage enrollment later this month after these plans expanded into new markets.
The industry is tapping into a market of more than 10,000 baby boomers aging into the Medicare population every day . The insurers that have reported 2018 earnings thus far are reporting overall industry growth that’s slightly ahead of the projected record growth the Centers for Medicare & Medicaid Services (CMS) predicted for Medicare Advantage last fall. “We completed a strong Medicare Advantage enrollment season . . . and are on track to achieve 2019 growth within the 400,000 to 450,000 range of expectations,” Steve Nelson, CEO of UnitedHealthcare, UnitedHealth’s insurance business told analysts two weeks ago.
Medicare Advantage plans contract with the federal government to provide extra benefits and services to seniors, such as disease management and nurse help hotlines, with some even providing vision and dental care and wellness programs. CMS is changing regulations to allow Medicare Advantage plans to provide broader coverage in the future, which is also expected to boost enrollment. L.E.K. has projected Medicare Advantage enrollment will rise to 38 million, or 50% market penetration by the end of 2025.
As seniors flock to Medicare Advantage, analysts say it’s going to make it difficult for Democrats on the presidential campaign trail to support a Medicare for All approach that would bring an end to the private insurer’s role.
The insurance industry worries most about so-called “single payer” forms of health insurance that would conceivably replace the private insurer’s role with a government-administered form of coverage. U.S. Sen. Bernie Sanders of Vermont has espoused the single payer approach for years but the Medicare for All Act of 2017 that he, Harris and others supported does mention “the ability to enroll in a Medicare Advantage plan.”
America’s Health Insurance Plans, the health insurance lobby that includes Anthem, Cigna and other insurers that sell Medicare Advantage, said Americans don’t want a “a one-size-fits-all health care system.”
“Today, health insurance providers deliver coverage that is working for hundreds of millions of Americans – including 180 million Americans who are covered through an employer, 20 million covered through Medicare Advantage, 55 million covered through Medicaid managed care, and 20 million who buy their own coverage,” AHIP spokeswoman Kristine Grow said.
”The vast majority of these 300 million Americans are satisfied with their existing coverage," Grow added. "One of the reasons they like their coverage is it provides them with choice and control. Health care is personal – all Americans are unique individuals with different health care needs depending on their stage of life, where they live, their income and resources, and physical and mental health. People should be able to get the care they need, when they need it, at a cost they can afford.”
Medicare Advantage Enrollment Surges For Centene And WellCare
By Bruce Japsen – Forbes – February 5, 2019
Centene and WellCare Health Plans are the latest to report a surge in seniors signing up for private Medicare coverage administered by health insurers.
Centene and WellCare, which reported earnings Tuesday, have been expanding beyond their historic business lines dominated by administering Medicaid benefits for states into Medicare Advantage. Centene also has a large business offering subsidized individual coverage offered under the Affordable Care Act.
But these health insurers are joining the parade of health plans and startups taking advantage of more than 10,000 baby boomers turning 65 every day and rule changes administered by the Centers for Medicare & Medicaid Services (CMS) to allow private insurers to offer more benefits in Medicare Advantage plans they sell.
Centene’s enrollment in Medicare plans, including Medicare Advantage, rose 25% to 416,900 in the fourth quarter compared to 333,700 in the fourth quarter of 2017. Meanwhile, WellCare reported Tuesday its enrollment in Medicare plans including Medicare Advantage increased nearly 10%, or by 49,000, to 545,000 in the fourth quarter of last year compared to 496,000 in the fourth quarter of 2017.
Such growth reported by Centene and WellCare Tuesday comes following double-digit percentage growth in Medicare Advantage enrollment already released by Anthem and UnitedHealth Group. Humana reports its earnings later this week and Aetna, now owned by CVS Health, reports its fourth quarter results later this month.
Medicare Advantage plans contract with the federal government to provide extra benefits and services to seniors, such as disease management and nurse help hotlines, with some even providing vision and dental care and wellness programs. CMS' rule changes to allow Medicare Advantage plans to provide broader coverage in the future is also expected to boost enrollment. L.E.K. Consulting has projected Medicare Advantage enrollment will rise to 38 million, or 50% market penetration by the end of 2025.
The rising enrollment in privately-administered Medicare Advantage plans comes as members of Congress and Democrats running for president in 2020 talk about expanding Medicare to all Americans.
Some of the plans include allowing private insurers to maintain their role offering Medicare Advantage but others urging "Medicare for All" including Sen. Bernie Sanders of Vermont and Sen. Kamala Harris of California have talked about a diminished role for the health insurance industry in administering Medicare benefits.
UnitedHealthcare Customers Unhappy About Cuts To SilverSneakers Fitness Program
By Judith Graham – NPR – December 5, 2018
John Garland Graves was taken aback when he walked into his McKinleyville, Calif., gym in October and learned that his SilverSneakers membership was being canceled.
Since 2014, Graves, 69, has enjoyed free access to the gym through SilverSneakers, the nation's best-known fitness program for seniors. He was disturbed by the news, as are many other people who have recently learned they're losing this benefit.
A controversial business decision by UnitedHealthcare, the nation's largest health insurance carrier, is causing the disruption. As of Jan. 1, the company is dropping SilverSneakers — an optional benefit — for 1.2 million customers with Medicare Advantage plans in 11 states (California, Connecticut, Illinois, Indiana, Iowa, Kansas, Missouri, Nebraska, Nevada, North Carolina and Utah) as well as 1.3 million customers with Medicare supplemental (Medigap) insurance in nine states (Arizona, California, Connecticut, Illinois, Indiana, North Carolina, Ohio, Utah and Wisconsin).
Graves, who works out four to five days a week and has a UnitedHealthcare Medigap policy, decided to seek coverage elsewhere after the company raised his policy's
rates and eliminated SilverSneakers in California. He has signed up for a new policy with Blue Shield of California.
Starting next year, UnitedHealthcare will offer members a package of fitness and wellness benefits instead of paying to use SilverSneakers — a move that will give the company more control over its benefits and may save it money.
Seniors with UnitedHealthcare Medicare supplemental policies will get 50 percent off memberships at thousands of gyms across the country, telephone access to wellness coaches and access to various online communities and health-related resources.
Those with Medicare Advantage policies can join Renew Active, UnitedHealthcare's fitness program, with a network of more than 7,000 sites, at no cost, and qualify for an evaluation from a personal trainer and an online brain-training program, among other services.
Steve Warner, who leads UnitedHealthcare's Medicare Advantage product team, explained the company's move by noting that over 90 percent of policyholders who are eligible for SilverSneakers "never step foot in a gym" or use this benefit.
UnitedHealthcare wants to reach "a broader portion of our membership" with a "wider variety of fitness resources," he said, noting that the company's shift away from SilverSneakers began last year and has accelerated this year.
Altogether, more than 5 million customers have been affected. But the company is making market-by-market decisions, and nearly 675,000 UnitedHealthcare Medigap policyholders and 1.9 million UnitedHealthcare Medicare Advantage plan members will retain access to SilverSneakers in 2019.
"I think it's a smart move," said Connie Holt, an independent broker with Goldsum Insurance Solutions of Pleasant Hill, Calif.
But many of the company's customers aren't happy that SilverSneakers, which offers group classes tailored to seniors in addition to gym access at 15,000 sites, is disappearing. And confusion about alternatives is widespread.
UnitedHealth grows Medicare business by 400,000
Following a Medicare open-enrollment period that included the company’s debut in Minnesota, UnitedHealthcare officials said Tuesday that the health insurer expects in 2019 to add more than 400,000 Medicare Advantage enrollees across the country.
UnitedHealthcare was already the nation’s largest provider of Medicare Advantage plans, a newer form of coverage where enrollees opt to receive their government benefits through a private health insurance company.
At the end of last year, 4.9 million people were enrolled in the company’s MA health plans. Government data show that UnitedHealthcare enrolled about 2,300 Minnesotans in Medicare Advantage plans this month.
“We completed a strong Medicare Advantage enrollment season last month and are on track to achieve 2019 growth within the 400,000 to 450,000 range of expectations,” said Steve Nelson, an executive vice president at parent company UnitedHealth Group, during a conference call.
Shares of UnitedHealth Group closed up more than 3 percent in trading Tuesday after the Minnetonka-based health care giant beat analyst expectations for fourth-quarter profit on continued growth at its Optum division for health care services.
For the first time, annual sales at Optum hit the $100 billion mark, company officials said Tuesday, as the division’s operating earnings for the year grew more than $1.5 billion, or 23 percent, to $8.2 billion.