1 00:00:00,000 --> 00:00:02,159 This is Jacob Emerson with the Becker's peer 2 00:00:02,159 --> 00:00:03,139 issues podcast. 3 00:00:03,520 --> 00:00:06,660 Here's your biweekly industry news briefing for September 4 00:00:06,719 --> 00:00:07,219 11th. 5 00:00:07,599 --> 00:00:10,559 Well, immigration and the economy emerged as major 6 00:00:10,559 --> 00:00:13,544 topics during the 90 minutes presidential debate on 7 00:00:13,625 --> 00:00:16,505 September 10th between former president Donald Trump and 8 00:00:16,505 --> 00:00:19,704 vice president Kamala Harris. But the 2 candidates 9 00:00:19,704 --> 00:00:21,864 did spend some of their time on 2 10 00:00:21,864 --> 00:00:25,304 health care topics, abortion and the Affordable Care 11 00:00:25,304 --> 00:00:25,804 Act. 12 00:00:26,219 --> 00:00:28,779 The a ACA surface surface as a topic 13 00:00:28,779 --> 00:00:30,699 near the end of the debate. 1 of 14 00:00:30,699 --> 00:00:33,179 the moderators asked mister Trump if he still 15 00:00:33,179 --> 00:00:35,259 intended to replace the health care law, and 16 00:00:35,259 --> 00:00:37,739 if so, what his plan would be. When 17 00:00:37,739 --> 00:00:39,899 pressed by the moderator, mister Trump said he 18 00:00:39,899 --> 00:00:41,954 has concepts of a plan and that he, 19 00:00:42,035 --> 00:00:44,355 quote, would change it if we come up 20 00:00:44,355 --> 00:00:46,375 with something better and less expensive. 21 00:00:46,755 --> 00:00:48,914 And there are concepts and options we have 22 00:00:48,914 --> 00:00:50,755 to do that, and you'll be hearing about 23 00:00:50,755 --> 00:00:52,995 it in the not too distant future, end 24 00:00:52,995 --> 00:00:55,875 quote. The Republican Party has shifted away from 25 00:00:55,875 --> 00:00:58,920 its longstanding campaign to repeal the ACA passed 26 00:00:58,920 --> 00:01:01,260 under president Barack Obama in 2010. 27 00:01:01,799 --> 00:01:04,200 The health care law reemerged in this election 28 00:01:04,200 --> 00:01:06,760 cycle when mister Trump in November used Truth 29 00:01:06,760 --> 00:01:08,920 Social to identify health care as a key 30 00:01:08,920 --> 00:01:10,140 issue in his 2024 31 00:01:10,439 --> 00:01:10,939 campaign, 32 00:01:11,335 --> 00:01:13,515 promising to replace the ACA if reelected. 33 00:01:14,215 --> 00:01:16,715 According to a tracking poll conducted by KFF, 34 00:01:16,935 --> 00:01:19,335 43% of adults supported the health care law 35 00:01:19,335 --> 00:01:20,635 in November of 2016. 36 00:01:21,415 --> 00:01:24,480 The latest survey conducted in this April showed 37 00:01:24,480 --> 00:01:27,680 62% of Americans hold a favorable opinion of 38 00:01:27,680 --> 00:01:29,379 the ACA, while 37% 39 00:01:30,000 --> 00:01:31,060 view it unfavorably. 40 00:01:31,680 --> 00:01:34,640 In 2021, the Biden administration enacted the American 41 00:01:34,640 --> 00:01:37,519 Rescue Plan Act, which temporarily enhanced subsidies for 42 00:01:37,519 --> 00:01:40,724 individuals purchasing health coverage through ACA marketplaces, 43 00:01:41,265 --> 00:01:43,105 was set to expire at the end of 44 00:01:43,105 --> 00:01:45,605 2025 without congressional action. 45 00:01:46,385 --> 00:01:48,784 The Biden administration has also released new data 46 00:01:48,784 --> 00:01:50,704 on September 10th showing that 1 in 7 47 00:01:50,704 --> 00:01:53,665 US residents have been covered through marketplace coverage 48 00:01:53,665 --> 00:01:55,890 since January of 2014. 49 00:01:56,829 --> 00:01:59,629 During the debate, miss Harris emphasized her commitment 50 00:01:59,629 --> 00:02:02,430 to maintaining and growing the ACA, highlighting that 51 00:02:02,430 --> 00:02:04,909 the law prevents insurance companies from denying coverage 52 00:02:04,909 --> 00:02:06,209 to those with preexisting 53 00:02:06,590 --> 00:02:07,090 conditions. 54 00:02:10,514 --> 00:02:13,235 Well, coming mid October, the Medicare Advantage Program 55 00:02:13,235 --> 00:02:15,955 will enter its annual enrollment period marked by 56 00:02:15,955 --> 00:02:18,215 significant changes for older adults. 57 00:02:18,594 --> 00:02:21,555 Among these changes are increased government scrutiny, tighter 58 00:02:21,555 --> 00:02:25,180 CMS regulations, reduced base payments, and rising health 59 00:02:25,180 --> 00:02:25,919 care costs. 60 00:02:26,459 --> 00:02:29,020 The CEO of 1 Insurance Marketplace also wrote 61 00:02:29,020 --> 00:02:32,060 online that in addition, the presidential election will 62 00:02:32,060 --> 00:02:34,412 distract beneficiaries during the early weeks of the 63 00:02:34,412 --> 00:02:36,925 enrollment period, and the late Thanksgiving holiday will 64 00:02:36,925 --> 00:02:39,965 cause many beneficiaries to delay their decision making 65 00:02:39,965 --> 00:02:42,205 until the final week, adding more stress to 66 00:02:42,205 --> 00:02:43,745 an already difficult situation. 67 00:02:44,284 --> 00:02:46,284 We also know that the health insurance industry 68 00:02:46,284 --> 00:02:48,800 is launching a 7 figure lobbying blitz in 69 00:02:48,800 --> 00:02:51,439 Washington, which includes a national digital and social 70 00:02:51,439 --> 00:02:52,340 media campaign 71 00:02:52,639 --> 00:02:55,280 to reach seniors and counter mounting challenges and 72 00:02:55,280 --> 00:02:57,760 highlight the benefits that Medicare Advantage Plans can 73 00:02:57,760 --> 00:02:59,379 offer to that population. 74 00:03:00,000 --> 00:03:02,580 In response to these market shifts, MA carriers 75 00:03:02,639 --> 00:03:05,185 are prioritizing their margins over membership 76 00:03:05,485 --> 00:03:08,064 by reducing certain benefits and exiting unprofitable 77 00:03:08,364 --> 00:03:11,644 markets. As margins tighten and negotiations with providers 78 00:03:11,644 --> 00:03:14,844 become more strained, some, usually smaller health systems, 79 00:03:14,844 --> 00:03:16,844 are choosing to no longer accept some or 80 00:03:16,844 --> 00:03:18,144 all MA plans 81 00:03:18,500 --> 00:03:20,439 usually from larger carriers. 82 00:03:20,979 --> 00:03:24,019 Sachin Jain, the CEO of Scan Group, a 83 00:03:24,019 --> 00:03:26,919 nonprofit Medicare managed carrier with more than 285,000 84 00:03:27,459 --> 00:03:30,599 members, he wrote on LinkedIn earlier in September 85 00:03:30,739 --> 00:03:34,074 calling all of this, quote, the great disruption, 86 00:03:34,215 --> 00:03:36,534 and he outlined 5 key observations about the 87 00:03:36,534 --> 00:03:37,594 evolving landscape, 88 00:03:37,894 --> 00:03:40,215 saying that benefit stability will win out among 89 00:03:40,215 --> 00:03:41,674 beneficiaries over innovation, 90 00:03:41,974 --> 00:03:44,854 that MA organizations will need to improve care 91 00:03:44,854 --> 00:03:45,354 management 92 00:03:45,689 --> 00:03:48,669 abilities, that competition in the industry will increasingly 93 00:03:48,729 --> 00:03:51,289 focus on plan effectiveness and the quality of 94 00:03:51,289 --> 00:03:54,569 service. The brokers are becoming more important than 95 00:03:54,569 --> 00:03:57,449 ever, and the stronger relationships will prevail will 96 00:03:57,449 --> 00:04:00,189 prevail over partnering with everyone. 97 00:04:02,344 --> 00:04:05,305 Well, Aetna and HCA hospitals in Florida will 98 00:04:05,305 --> 00:04:06,985 go out of network if the two sides 99 00:04:06,985 --> 00:04:09,224 do not reach a new contract agreement before 100 00:04:09,224 --> 00:04:10,205 September 15th. 101 00:04:10,824 --> 00:04:13,224 HCA and 48 of its hospitals in Florida 102 00:04:13,224 --> 00:04:14,584 will be out of network if a new 103 00:04:14,584 --> 00:04:15,485 contract agreement 104 00:04:16,050 --> 00:04:19,169 is not reached. HCA's contract with Aetna's commercial 105 00:04:19,169 --> 00:04:21,910 and individual plans expires September 15th. 106 00:04:25,649 --> 00:04:28,370 HCA's Florida hospitals will remain in network with 107 00:04:28,370 --> 00:04:31,029 Aetna Medicare Advantage through October 2025. 108 00:04:31,865 --> 00:04:34,745 The contract negotiations do not affect ASC's urgent 109 00:04:34,745 --> 00:04:37,964 care facilities or other facilities according to HCA, 110 00:04:38,185 --> 00:04:40,345 and both sides are working to avoid a 111 00:04:40,345 --> 00:04:40,845 split. 112 00:04:42,185 --> 00:04:43,964 Well, speaking of contract negotiations, 113 00:04:44,500 --> 00:04:46,899 Mercy Health in St. Louis has notified Anthem 114 00:04:46,899 --> 00:04:48,500 Blue Cross Blue Shield that it will go 115 00:04:48,500 --> 00:04:50,600 out of network with the insurer in Missouri 116 00:04:50,740 --> 00:04:52,899 if a new agreement is not reached by 117 00:04:52,899 --> 00:04:56,259 January 1st. That contract includes all commercial, Medicare 118 00:04:56,259 --> 00:04:58,199 Advantage, ACA, Managed Medicaid, 119 00:04:58,615 --> 00:04:59,595 and Health Link. 120 00:04:59,974 --> 00:05:02,534 Mercy's retail pharmacy services would not be affected 121 00:05:02,534 --> 00:05:05,014 by any potential split. The health system said 122 00:05:05,014 --> 00:05:06,854 it wants to remove the, quote, red tape 123 00:05:06,854 --> 00:05:08,935 that makes it difficult for patients to navigate 124 00:05:08,935 --> 00:05:11,334 Anthem's system and acts as a, quote, barrier 125 00:05:11,334 --> 00:05:12,714 for patients to receive 126 00:05:13,029 --> 00:05:14,569 medically necessary care. 127 00:05:14,949 --> 00:05:18,649 Both of those organizations are continuing to negotiate. 128 00:05:19,829 --> 00:05:23,850 And finally, Centene expects rising Medicaid pressures to 129 00:05:24,790 --> 00:05:26,784 hurt its 3rd quarter earnings. 130 00:05:27,324 --> 00:05:29,805 In documents filed with the SEC on September 131 00:05:29,805 --> 00:05:32,685 10th, Centene said it expects Q3 earnings per 132 00:05:32,685 --> 00:05:35,164 share to decline by 20 to 30ยข. Those 133 00:05:35,164 --> 00:05:37,185 earnings will shift to the Q4. 134 00:05:37,884 --> 00:05:39,964 The company is maintaining its full year earnings 135 00:05:39,964 --> 00:05:41,264 guidance of at least $6.80 136 00:05:42,000 --> 00:05:42,980 cents per share. 137 00:05:43,520 --> 00:05:46,319 Its CFO, sir Drew Asher, on September 4th, 138 00:05:46,319 --> 00:05:48,980 said the company expected medical expenses in Medicaid 139 00:05:49,040 --> 00:05:50,639 to be higher in the Q3 than in 140 00:05:50,639 --> 00:05:51,300 the Q2. 141 00:05:51,680 --> 00:05:54,020 The company's medical loss ratio in the Q2 142 00:05:54,560 --> 00:05:55,460 was 87.6%. 143 00:05:56,925 --> 00:05:58,625 They said that Medicaid redeterminations 144 00:05:59,084 --> 00:06:01,665 have been the main driver of increasing costs. 145 00:06:02,044 --> 00:06:04,944 Centene lowered its Medicaid membership guidance for 2024 146 00:06:05,084 --> 00:06:05,904 from 13,600,000 147 00:06:06,524 --> 00:06:07,345 to 13,000,000. 148 00:06:07,964 --> 00:06:09,920 If you like the latest health insurance industry 149 00:06:09,920 --> 00:06:12,000 news delivered straight to your inbox, subscribe to 150 00:06:12,000 --> 00:06:14,240 the Becker's payer issues e newsletter on our 151 00:06:14,240 --> 00:06:15,460 website at beckerspayer.com.