Medicare Advantage
AHIP President and CEO Mike Tuffin made a plea for enhanced federal support for Medicare Advantage, which emerged as a trouble spot for health insurance companies late last year.
"We're already seeing signs that some of the policies enacted in recent years will result in fewer choices [and] perhaps fewer benefits when seniors renew their coverage this October," Tuffin said.
The Centers for Medicare and Medicaid Services has tightened oversight of Medicare Advantage in ways that have affected insurers' bottom lines. CMS cut the benchmark payment rate for next year, imposed limits on marketing and restricted prior authorizations, for example.
Related: Insurers, providers weigh GLP-1 demand at AHIP 2024
Medicare Advantage insurers won a major concession Thursday, when CMS announced it would recalculate Medicare Advantage star ratings for this year and extend the application deadline for 2025. These actions follow successful lawsuits from SCAN Health Plan and Elevance Health over how CMS altered the star ratings formula. This development occurred after AHIP 2024 wrapped.
Individual market
Beefed up federal subsidies for health insurance exchange customers are due to expire at the end of 2025 unless Congress extends them, which is highly dependent on whether President Joe Biden or former President Donald Trump prevails on Election Day. If those larger tax credits disappear, insurers that sell on the exchange marketplaces stand to lose a lot of business.
“These tax credits need to be extended so consumers have a peace of mind of knowing they can keep their current coverage,” Tuffin said.
Oscar Health estimates it would lose 18%-20% of its exchange members if the subsidies revert to their original levels, Chief Insurance Officer Alessa Quane said. And remaining policyholders may switch to less expensive, less comprehensive plans, she said.
Ambetter Health Chief Sales Officer Nathanael Watters said the company has similar expectations, while Neighborhood Health Plan of Rhode Island President and CEO Peter Marino said smaller tax credits would have a “more dramatic” effect on his company.
Oscar Health and Ambetter Health nevertheless see opportunities in the individual market via employer-sponsored individual coverage health reimbursement arrangements, or ICHRAs. These insurers are banking on businesses seeking to limit health benefit expenses by granting workers lump sums to choose their own policies.
Artificial intelligence
Health insurance companies are incorporating artificial intelligence into their workflows, but doing so at their own pace, executives said.
Many insurers employ AI for administrative functions and are carefully considering applications that would more directly affect providers and policyholders, L.A. Care Health Plan Chief Operating Officer Acacia Reed said.
“We do leverage some opportunities with machine learning to really understand the health and involvements of various populations,” Reed said. “But when you're using it to make substantive decisions about that population — possibly placement, possibly care, possibly diversion of care — then you start running into problems.”
Insurers need to think critically about how they utilize AI, especially as federal authorities weigh new rules to govern the technology, executives said.
But AI can be useful to insurers and their customers today, said Urvashi Patel, vice president of data and analytics at Cigna's Evernorth Research Institute. For example, AI-powered chatbots can assist members searching for specialists or trying to estimate costs, she said. Cigna has been test driving a utility like this and may deploy it as a pilot program, she said.
Drug costs
Escalating pharmaceutical prices received a lot of criticism at AHIP 2024. Tuffin, for instance, emphasized the effects of drugmakers extending patent exclusivity and blocking generic competition.
Patients For Affordable Drugs Executive Director Merith Basey likewise criticized the drug industry, and extended her ire to pharmacy benefit managers.
“Patent reform is one piece but let's not leave out pharmacy benefit managers, too, because it’s part of the problem that's keeping prices high,” Basey said.
The introduction of less costly biosimilar versions of biologic drugs stands to benefit PBMs, insurers and patients, said Adam Kautzner, president of Cigna unit Express Scripts. “That savings that’s going to be created from biosimilars is going to help pay for many of these other really expensive therapies that we're now talking about,” he said.
Executives paid special attention to GLP-1 drugs such as Ozempic and Mounjaro for diabetes and weight loss. Highmark Chief Medical Officer Dr. Timothy Law bemoaned that high prescription rates have turned insurers into the "bad guys” when they attempt to moderate utilization. Kautzner described GLP-1s as the "hottest topic I have dealt with."
Retail healthcare
Walgreens has pulled back from the healthcare delivery space and closed dozens of VillageMD clinics, but the drugstore chain shouldn't be counted out, said Mary Langowski, president of U.S. healthcare operations. Walgreens remains "bullish" on retail healthcare, she said.
“What you're seeing is a lot of evolution around not whether it'll exist; it's a lot of evolution around what's the right model going to be,” Langowski said.
Walgreens also wants to expand its relationships with health insurance companies, Langowski said. The company already works with Blue Shield of California to send reminders to members about colorectal screenings, she said. “When you think about our set of assets, they're so highly complementary to what payers have,” she said.
"We want to be your partner in creating the care models together, ensuring that we are delivering the health services that you want and need." Langowski said.
Kroger Health Chief Medical Officer Dr. Marc Watkins predicts demand for healthcare services will increase in the coming years. The retailer is looking to extend grocery services such as delivery, pickup and personal shopping to its healthcare business, he said. “Those who can adapt and meet people where they are will benefit,” he said.
