What 5 insurers are talking about with Wall Street investors

Health insurance executives and Wall Street investors spent the past week at two major conferences discussing Medicare Advantage ambitions, Medicaid membership rates and ways to stay afloat amid ongoing industry challenges.

Publicly traded health insurance companies have had a tough 12 months operating Medicare Advantage and Medicaid plans. But as medical utilization trends stabilize and companies invest in other critical areas of their businesses, such as pharmacy, commercial plans and artificial intelligence, they may be better positioned entering 2025.

Related: Medicare Advantage vendors brace for supplemental benefits cuts

Here's what leaders from Centene Corp., Humana, Cigna Group, Oscar Health and Clover Health talked about this week at the Wells Fargo Healthcare Conference in Everett, Massachusetts, and Morgan Stanley's Global Healthcare Conference in New York.

Centene

Centene is planning for a drop in Medicare Advantage membership as it looks to improve margins, CEO Sarah London said Wednesday at the Wells Fargo conference.

“The expectation is, without seeing everything yet, that we would shrink membership as part of the path to a sustainable profitable business that aligns really nicely with a market-leading Medicaid footprint,” London said.

The company's flagship Medicaid business is still strained from redeterminations, however, despite inking new state contracts this year.

Centene projects its Medicaid business will cover 13 million members at the end of the year, down from the 13.6 million it forecast during its investor day in December, executives said Wednesday.

Lower membership means fewer premiums collected to cover medical costs.

The patients remaining on the rolls after redeterminations are also generally sicker, with costlier care, Chief Financial Officer Drew Asher said at the conference. The company is working with states to set rates that cover higher patient acuity, he said.

Humana

Humana in 2025 is cutting Medicare Advantage plans covering 10% of its membership, Chief Financial Officer Susan Diamond said Wednesday at the Wells Fargo conference.

The majority of the members will have access to another Humana plan, except those in 13 counties it will fully exit next year, she said.

Diamond also touched on the company's growing Medicaid footprint and its plans to bring the segment to profitability in the next couple years.

Medicaid membership and acuity are mostly in line with Humana’s expectations, although the company is seeing some isolated medical cost pressures in a few areas. States have been responsive to insurer calls for higher rates to match patient acuity following Medicaid redeterminations, Diamond said.

Cigna

Cigna’s Evernorth Health Services business continues to be a major growth driver for the company, CEO David Cordani said Thursday at the Morgan Stanley conference.

Expanding the segment’s distribution access is top of mind, he said. The company is looking for more partnership opportunities with health plans, government payers, health systems and multispecialty provider groups.

Cigna is leaning heavily into the growing specialty pharmacy market. Cordani pointed to successes in the company's various pharmacy units as he announced it is making a biosimilar alternative to Johnson & Johnson’s Stelara available to some patients at its specialty pharmacy.

He also said Cigna’s pharmacy benefit manager Express Scripts isn’t feeling the heat from political scrutiny and startup PBMs entering the market.

Oscar

Oscar continues looking for its niche in the growing Affordable Care Act marketplace, which covered a record 21.3 million people in January, according to the Centers for Medicare and Medicaid Services.

If enhanced ACA subsidies lapse next year, Oscar could lose 15%-20% of its exchange membership, and another roughly 15% could see higher premiums, Chief Financial Officer Scott Blackley said Wednesday at the Wells Fargo conference. The other 70% of members should be able to move to a different Oscar plan with a similar premium, he said.

Oscar remains bullish on individual coverage health reimbursement arrangements as an alternative to traditional employer-sponsored coverage, but uptake has been minimal, CEO Mark Bertolini said Thursday at the Morgan Stanley conference.

The company has sold ICHRA plans to small-market employers so far, although larger hospitality companies and health systems have expressed interest in the pilot programs, Bertolini said. About 3,400 Oscar members are enrolled in ICHRA plans, he said.

Clover

Chief Financial Officer Peter Kuipers walked investors through Clover's technology arm Counterpart Health and its artificial intelligence platform at the Wells Fargo conference on Wednesday. The company this week signed a multi-year agreement with hundreds of providers to use the tool.

Clover unveiled plans in May to bring the Counterpart Assistant software to Medicare Advantage insurers and risk-bearing providers. Under the agreement signed Tuesday, 250 providers at The Iowa Clinic, a Des Moines, Iowa-based multispecialty group, will have access to the tool geared toward identifying and managing chronic conditions, including chronic kidney disease and diabetes.

“We have conviction that we can reduce their total cost of care or [medical cost ratios] by over 1,000 basis points, which is significant,” he said.