This is Jacob Emerson with the Becker's Payer
Issues podcast.
Here's your biweekly industry news briefing for July
31st.
UnitedHealth Group's Change Healthcare
has begun sending out letters to individuals
affected by the February ransomware attack.
On July 29th, Change began mailing written notices
to individuals affected by the incident.
Change is committed to notifying potentially impacted individuals
as quickly as possible on a rolling basis
given the volume and complexity of the data
involved. That's according to a statement from UnitedHealth.
Change Healthcare also reported the ransomware attack to
HHS's
data breach portal. This comes after change said
back in April that an initial sampling of
the breach data showed the attack compromised, protected
health information,
and personally identifiable information from a large swath
of the country.
Wells Humana reported 6 $179,000,000
in profits in the Q2
of this year. The company published its 2nd
quarter earnings report on July 31st and beat
investor expectations.
In the Q2 of last year, Humana posted
$559,000,000
in profits.
Total revenue in the Q2 was $29,500,000,000.
That's up 10%
year over year. Humana's medical loss ratio was
89% in the Q2.
Total medical membership in the Q2 was 16,300,000
people. That's down 4.8%
year over year. Medicare Advantage membership grew to
nearly 6,200,000
people. The company raised its individual Medicare Advantage
membership growth expectations by 75,000,
predicting to add around
225,000
more members this year.
Well, Centene says it will exit a handful
of state Medicare Advantage markets in 2025.
On July 26th call with investors, its CEO,
Sarah London, said the exits are designed to
align with the company's long term strategy. She
said, we think the team has done a
really good job in terms of thought we
designing
bids consistent with our long term strategy
even in a challenging rate year. We're being
thoughtful about how to streamline that book and
further alignment with our Medicaid footprint
because that's where the puck is going. Centene
is focused on MA plans for dually eligible
beneficiaries.
Other payers have also said they plan to
exit MA markets in 2025
as they face rising medical costs and a
tougher reimbursement environment, including
Humana and
CVS Health. Centene also named
Nathan Landsbaum as its next CEO of Markets
and Medicaid.
He is the CEO of Sunshine Health, which
is Centene's Medicaid subsidiary in Florida. And the
company's current CEO of Markets and Medicaid, Dave
Thomas, will leave Centene
in December.
Well, Blue Cross Blue Shield of Vermont says
premium hikes are needed this year to stay
financially solvent.
In May, the company asked state regulators to
approve the highest ever premium increases for individual
and small group plans in
Vermont exchange market.
In July, the company said it was placed
in the, quote, unprecedented in situation of amending
its request to raise premiums even higher.
The company says its claim costs have increased
significantly since May, draining reserves and leaving the
company in a fragile financial state.
Its CEO, Don George, wrote in a letter
to Becker's, these increases are troubling for all
of us and have positioned us between 2
extraordinary pressures,
the sky right skyrocketing
increase in health care costs and the difficulty
of providing affordable health insurance plans for our
members. He said, unfortunately,
the high demand for medical services, increasing prices
at hospitals,
exponential growth in drug prices, and new state
laws
are all forcing higher premiums to pay for
the cost of care for Vermonters.
Vermont's commissioner of insurance wrote that BCBS needs
to contribute more to its reserve funds to
stay financially solvent.
Insurers must maintain adequate reserve funds to pay
for unexpectedly
high medical claims
or other unforeseen
events.
BCBS has proposed upping its reserve contribution to
7%,
up from 3 in its original proposal.
Those contributions are funded by premiums.
If approved, premiums
for individual plans would increase 20%,
and group market premiums would increase 23% in
2025.
The market accounts for 18% of the company's
membership,
but 50%
of its reserve needs.
Other markets will have proportional increases to cover
the increased reserved funds.
And finally, 7 insurers, at least 7 insurers,
are exiting Medicare Advantage Markets in 2025,
a number that is likely to grow in
the fall. There's just under 4,000 individual individual
MA plans available nationwide this year, and the
average number of plans available to beneficiaries is
43, which is unchanged from last year.
In terms of insurers that will be exiting
markets next year, Blue Cross of Arizona is
not going to be offering MA prescription drug
plans in the states next
year. We mentioned that Centene, Aetna, and Humana
will all be exiting an unspecified number of
markets next year as they focus more on
profitability.
Blue Cross of Kansas City is exiting the
Medicare Advantage market entirely.
ClearSpring Health will withdraw its Medicare Advantage prescription
drug plans from South Carolina and Virginia.
And finally, at the very
start of this year, Cigna Group reached a
deal to sell its Medicare business to Health
Care Service Corporation, which owns 5 Blue Cross
Plans. A deal was worth just over $3,000,000,000.
It's expected to close in the Q1 of
2025, and that includes almost
600,000
Medicare Advantage members.
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