Changes coming for MA star ratings, Highmark CEO predicts

Insurance companies must contend with a large degree of uncertainty in the coming year, including how President Donald Trump’s administration will treat key aspects of the Medicaid, Medicare Advantage and exchange programs.

Highmark Health President and CEO David Holmberg said his team is preparing for a variety of scenarios.

Related: Trump win tees up regulatory rollbacks and uncertainty

"We're constantly thinking forward," Holmberg said.

Highmark Health is a Blue Cross Blue Shield licensee with 6.9 million Medicaid, Medicare and commercial customers across four states. The company also owns Allegheny Health Network, a nonprofit 14-hospital academic medical system based in Pittsburgh, Pennsylvania.

Companies such as Highmark also face ongoing challenges regarding claims costs — especially from glucagon-like peptide 1 agonists used for weight management — and heightened scrutiny from many policyholders in response to the December death of UnitedHealthcare CEO Brian Thompson. Holmberg declined to comment on the backlash health insurers have experienced following Thompson’s killing.

The interview has been edited for length and clarity.

What were the biggest challenges the health insurance industry faced last year?

In general, we saw a real uptick in our medical loss ratios across all lines of business: Medicare Advantage, Medicaid, everything.

The unexpected increase in claims costs, much of which was driven by GLP-1s, caught many people by surprise.

The changes CMS made to eliminate [Medicare Advantage] risk-adjustment payments were not a surprise because we knew about them going into the year, but obviously, they had an impact.

The increase in claims coming out of COVID-19: Again, we anticipated it would happen, but the acceleration and how it happened was pretty dramatic.

For those of us that have Medicaid businesses, the impact of redeterminations was really interesting. The claims cost for those who stayed on after redeterminations was somewhat masked by the folks who had been on rolls but were not filing claims, who were removed. Making the adjustments for that, and getting the rates right for ‘25, will be really important.

Does Highmark Health cover GLP-1 prescriptions from telehealth providers?

Our focus has been working through traditional healthcare systems and traditional providers.

We prefer that somebody has a primary care physician. Obviously, for some who are diabetic, certainly their specialist is needed. We're not against digital health companies for options. We just believe that the best care comes from having a comprehensive approach for the person, not just prescribing the drug. The biggest results we're seeing are happening in people who are morbidly obese or have comorbidities that are life-affecting. We think that the use of GLP-1s combined with lifestyle modification strategies is really important.

As we go to market in 2025, we're providing employers, as requested, premium increases including coverage of GLP-1s, and premium increases without GLP-1s, so that employers can make the decision and understand the impact that it's having. Some of our customers are now focusing on lifestyle modification as a condition of covering the GLP-1s.

Is there a return on investment there for you?

Not yet, honestly.

Do you think Congress will extend the advance premium tax credits for exchange plans past 2025?

If you look at when the subsidies were put in place, and you look at where the people who signed up for it live, I think there's a reasonable chance Congress will want to do something. A bipartisan approach will be necessary because it's going to have a significant impact. Somewhere between 2.5 and 5 million people could be affected if they’re not extended.

You could have people revert to Medicaid, potentially, and you could have some potentially go uninsured. We're keeping our eye on the uninsured numbers. If those go up, that means there will be an impact on hospital systems around the country in terms of uncompensated care.

We're trying to model that and understand what that would mean for us.

Do you expect the Trump administration to change the Medicare Advantage Star Ratings program?

We're very proud of the fact that we have a five-star rating, and we're proud of the fact that all of our various plans exceeded their goals. Changes to the ratings are coming, and everybody needs to be in tune with them. We'll see what the new administration thinks about the health equity index and if it wants to make any differences.

But it hasn't indicated one way or the other. Members of the administration haven't shown their hand at all. We're preparing for any scenario.

We're constantly thinking forward. We're thinking about ‘26, ‘27 and ‘28. The star ratings take a long time to evolve, so it's really important that this team works in the future.

National insurers left the Medicare Advantage market for 2025. How did that affect Highmark Health?

We are seeing growth in Medicare Advantage as some of the for-profit insurers, or the national insurers, have left the marketplace. 

We worked on making sure that the products and the services that we're providing are consistent with what people are looking for. So, for example, keeping popular supplemental benefits like vision, dental, hearing and fitness where we can, and then maybe narrowing the focus on food cards and other kinds of things that were included. We tried to rightsize the product offerings within the marketplace and avoid adverse selection.