Some of the nation’s largest commercial payers have seen their stocks fall slightly this year, while others have seen gains despite new pressures presented by the COVID-19 pandemic.
Here is an update on how the stocks of seven commercial payers are performing year to date as of May 20 at 2 p.m. CT:
1. Molina Healthcare: Up 32.9 percent to $177.23
2. Humana: Up 7.9 percent to $391.80
3. Centene Corp.: Up 5.7 percent to $65.40
4. UnitedHealth Group: Down 1.4 percent to $288.85
5. Anthem: Down 6.7 percent to $280.81
6. Cigna: Down 7.8 percent to $189.31
7. CVS Health (Aetna): Down 14.7 percent to $63.29
One of the main goals of the ACA, sometimes referred to as Obamacare, was to provide affordable health insurance to every American.
The law’s passage in 2010 made it possible for nearly 54 million Americans—previously denied coverage due to pre-existing medical conditions—to purchase coverage, as well as landmark provisions to protect those who developed an expensive medical condition while insured from being unexpectedly dropped by their health plan.
By all accounts, such provisions helped a record number of Americans procure medical insurance coverage—and, by extension, reduce healthcare costs and avoid medical bankruptcies.
Yet, with the elimination of the individual mandate penalty in 2017, and other policy changes that have forced up the cost of premiums, many Americans are looking for options off the healthcare exchange.
One such option is the short-term limited duration insurance (STLDI) plan, loosely defined as bare bones medical coverage that can last up to 12 months with the potential for renewal. Managed Healthcare Executive® Editorial Advisor Margaret Murray, chief executive officer of the Association for Community Affiliated Plans (ACAP), said such plans “are not really insurance,”—and refers to them as “junk insurance.” With a new 2018 HHS rule that dramatically expands access to this type of coverage, she worries that their availability will hurt consumers.
“Insurance brokers may offer these plans to consumers and those consumers may not realize that they largely reverse ACA protections regarding pre-existing conditions and coverage limits,” she says. “These plans don’t cover what you think they will cover, the insurance companies can cancel your policy at any time, and they can deny your access to maternity care and certain drugs. It’s not really major medical insurance and it’s not always easy for your average consumer to see that.”
Changing regulations
The Trump Administration contends, with rising insurance premiums, that such short-term plans make health insurance more affordable for the average American.
Cathryn Donaldson, a spokesperson for America’s Health Insurance Plans, a health insurance trade association, says such plans “can provide a temporary bridge for those who are going through a life transition or gap in coverage such as having a baby or changing jobs.”
Yet, Karen Pollitz, a senior fellow at the Kaiser Family Foundation, says STLDI plans embody the old adage about getting what you pay for. STLDI are not required to comply with many of the ACA’s most important protections, which means insurance companies can exclude coverage for pre-existing conditions, charge higher premiums based on health status, impose annual and/or lifetime caps, and opt out of coverage for things like maternity care or mental health treatment. They can also revoke coverage at will.
“Under the ACA, it used to be that short term and minimum essential coverage [MEC] policies had to have a prominent warning printed on the front place that said, if you buy this, you are not getting full coverage and may even owe a tax penalty,” she explains. “Those warnings are no longer there and that’s of concern.”
Furthermore, late last year, HHS put forth a final rule extending the duration of STLDI from a mere three months up to 364 days. In addition, insurers can offer renewals and extensions for up to three years. What is even more concerning, Murray says, is the current Administration is now actively promoting the use of private web broker sites to market STLDI. This can make it more difficult for consumers to understand which plans offer comprehensive medical coverage and which are the riskier STLDI plans.
“The current administration says such plans offer consumers more affordable options—and more choice,” Murray explains. “But the marketing for these plans is really disingenuous. It’s not just that they are just short-term. They don’t cover what people think they will cover. They are very profitable for insurance companies. But they can be very costly for consumers, who likely won’t realize they don’t have comprehensive coverage until they are sick or injured.”
The fall-out
Over the past few months, several high-profile publications like Consumer Reports and the Washington Post have printed stories about the dangers, and unexpected costs, of STLDI for consumers.
“It’s like you are in the market for a car and someone offers you a really affordable roller-skate,” says Pollitz. “But a roller-skate is not the same thing as a car. It’s not going to get you as far if you really need to travel. And it’s going to cost you more in the long run.”
Murray also cautions more widespread adoption of such plans can affect the entire insurance market, siphoning cost-conscious consumers from risk pools and driving up premium costs for everyone.
“There are always some young invincibles, who think they won’t get sick—and there are some invincibles, too—and they will be attracted by the lower premiums,” she says. “But in doing so, that will leave people who are sicker to pay higher rates by moving people out of the ACA marketplace.”
That’s one reason why ACAP, as well as six other health organizations, filed a lawsuit in the U.S. District Court for the District of Columbia on September 14, 2018 in order to roll back the new STLDI rule and stop the expansion of such plans. Murray said the HHS rule violates the ACA, “undercutting plans that comply” with the still active legislation. They argue the Trump Administration is using these new rules to try to overturn the ACA—which they have not yet been able to successfully repeal in Congress.
“We thought this was important enough that it was worth suing the federal government in order to try and stop it,” she says. “We had hoped to get a summary judgment last year because we wanted to stop the spread of STLDI plans for the 2020 open enrollment. Unfortunately, we didn’t get that. The judge ruled against us. But we are appealing it—and the hope is that we will have a decision to stop these things being sold in 2021.
The take-home message
Donaldson says it is vital the healthcare community educate consumers about the risks of STLDI plans and make sure they are better aware of what sort of comprehensive plans are available on the Healthcare.gov marketplace.
“While alternative plans such as association health plans and STLDI may present more affordable premiums, they are not a replacement for comprehensive coverage and may not cover the treatments or prescriptions an individual may need throughout the year,” she says.
Pollitz agrees.
“We understand that life happens and there may be all manner of reasons why you are separated from coverage,” she says. “But it is becoming harder and harder to distinguish these plans from real coverage especially now that they are now being aggressively marketed to people all over the country. And it’s vital that people understand that 90% of consumers will play less than the listed price on Healthcare.gov marketplace because they qualify for subsidies. It really does pay to take the time to look before you sign up for one of these short-term plans.”
Despite the president’s opposition, states are increasingly reducing barriers to what many see as the safest way to vote amid the pandemic.
By threatening online on Wednesday to withhold federal grants to Michigan and Nevada if those states send absentee ballots or applications to voters, President Trump has taken his latest stand against what is increasingly viewed as a necessary option for voting amid a pandemic.
What he hasn’t done is stop anyone from getting an absentee ballot.
In the face of a pandemic, what was already limited opposition to letting voters mail in their ballots has withered. Eleven of the 16 states that limit who can vote absentee have eased their election rules this spring to let anyone cast an absentee ballot in upcoming primary elections — and in some cases, in November as well. Another state, Texas, is fighting a court order to do so.
Four of those 11 states are mailing ballot applications to registered voters, just as Michigan and Nevada are doing. And that doesn’t count 34 other states and the District of Columbia that already allow anyone to cast an absentee ballot, including five states in which voting by mail is the preferred method by law.
“Every once in a while you get the president of the United States popping up and screaming against vote-by-mail, but states and both political parties are organizing their people for it,” said Michael Waldman, the president of the Brennan Center for Justice at New York University. “It’s a bizarre cognitive dissonance.”
Many of the states that have relaxed their rules have done so only for pending primary elections, leaving the possibility that they could choose not to do so in November. But that is highly unlikely, said Daniel A. Smith, a University of Florida political scientist and expert on mail ballots.
“The horse is out of the barn whether it’s primaries or the general election,” he said. “The optics are such that states will be under enormous pressure to continue to allow mail voting in the fall.”
Even as the president has offered support for some groups of absentee voters like older Americans and military serving abroad — and even as he votes absentee himself — Mr. Trump has regularly warned with no factual basis that allowing widespread voting by mail was a recipe for election theft. “You get thousands and thousands of people sitting in somebody’s living room, signing ballots all over the place,” Mr. Trump said at a White House briefing last month.
Despite ballot stuffing scandals in the nation’s past, and an absentee vote scandal involving Republicans in North Carolina in 2018, nothing remotely comparable has been documented in modern American politics or linked to voting by mail.
Still, some conservative advocacy groups have embraced Mr. Trump’s view, even going to court to block the expansion of absentee balloting during the pandemic. Republican-controlled legislatures in Louisiana and Oklahoma also have bridled at making voting easier. More legal battles ahead of the November election seem certain.
But in many other states, governments controlled by each of the political camps have moved in the other direction.
In lawsuits and elsewhere, voting-rights advocates and Democrats have taken aim at state rules on voting that they see as discriminatory. In Texas, a federal court ruled this week that a state regulation granting blanket absentee-ballot privileges to voters over 65 — a not-uncommon exception nationally — discriminated against younger voters.
Elsewhere, lawsuits have sought to expand a common exception allowing absentee voting by people too sick to go to the polls. The goal is to cover voters who fear catching the coronavirus while in line at a polling place. A number of states have adopted that view, ruling that voters who reasonably fear exposure to the virus have a right to vote remotely.
Jocelyn Benson, the Democratic secretary of state in Michigan, said this week that the state would mail applications for absentee ballots to all 7.7 million registered voters for both the August primary and the November general election. The Legislature in deeply Republican South Carolina expanded absentee voting rights last week as a lawsuit pressing that cause lay before the state’s Supreme Court.
In West Virginia, the Republican secretary of state sent absentee ballot applications last month to each of the state’s 1.2 million registered voters; so far, nearly one in five has asked to vote absentee.
And in Kentucky, Republicans and Democrats agreed three weeks ago on an emergency plan that allows any voter to request an absentee ballot online and submit it by mail or at drop-off points for two weeks before the state’s June 23 primary. Michael G. Adams, the Republican secretary of state, told National Public Radio last week that he had been excoriated by his party for mailing postcards to voters explaining the new rules.
“The biggest challenge I have right now is making the concept of absentee voting less toxic for Republicans,” said Mr. Adams, who won election on a platform underscoring the threat of voter fraud.
Many political analysts say they find that odd. Until now, the decade-long crusade by Republicans against voter fraud has focused largely on requiring ID cards at polling places, supposedly to counter the distant possibility that an impersonator might make it into a voting booth. Studies show that fraud among absentee voters, while still rare, is more common — but that those voters have tended to be both older and white, a demographic that favors Republicans and Mr. Trump.
“Before 2018, Republicans loved mail balloting,” Michael McDonald, a University of Florida political science professor and elections expert, said this week.
Mr. Trump said in March that Democrat-backed election proposals for expanded voting by mail would ensure that “you’d never have a Republican elected in this country again.” Indeed, many Republicans and Democrats alike believe that expanding mail voting would increase Democratic turnout.
Their reasoning is that many more absentee ballots have traditionally been cast by wealthier and more educated voters and expanding voting by mail would add more votes by the low-income and minority voters who tend to lean Democratic and have a harder time getting to polls on Election Day.
But both academic studies and changing demographics throw that into question. Under Mr. Trump, the Republican base has shifted greatly toward whites with less education, while wealthier suburbanites have become increasingly Democratic. Studies in states that use voting by mail indicate it does not favor either party.
And in any case, mail voting is increasingly the norm everywhere: In 2016, nearly one in four voters cast absentee or mail ballots, twice the share just 16 years ago, in 2004.
Mr. McDonald and a number of other experts argue that the greatest threat posed by a shift to voting by mail has nothing to do with fraud. Rather, they say, it is the very real prospect that a tsunami of mail votes could overwhelm both postal workers and election officials, creating a snarl in tallying and certifying votes that would allow a candidate to claim that late-counted votes were fraudulent.
Mr. Trump’s unfounded assertions that mail balloting in Michigan and Nevada encourage fraud suggest that he could be laying the ground for such an scenario, said Richard Hasen, an election law expert at the University of California, Irvine.
“I think he’s trying to undermine confidence in elections,” Mr. Hasen said, citing Mr. Trump’s claim in 2018 that close races for governor and the United States Senate were “massively infected” by fraud until Republican candidates, Ron DeSantis and Rick Scott, prevailed. “Maybe he’s not being conscious about what he’s doing. But he’s acting as if he has a plan.”
With over 38 million U.S. unemployment claims in nine weeks, one economist says the situation is “grimmer than we thought.”
Even as restrictions on businesses began lifting across the United States, another 2.4 million workers filed for jobless benefits last week, the government reported Thursday, bringing the total to 38.6 million in nine weeks.
And while the Labor Department has found that a large majority of laid-off workers expect their joblessness to be temporary, there is growing concern among economists that many jobs will never come back.
“I hate to say it, but this is going to take longer and look grimmer than we thought,” Nicholas Bloom, an economist at Stanford University, said of the path to recovery.
Mr. Bloom, a co-author of an analysis of the coronavirus epidemic’s effects on the labor market, estimates that 42 percent of recent layoffs will result in permanent job loss.
“Firms intend to hire these people back,” Mr. Bloom said, referring to a recent survey of businesses done by the Federal Reserve Bank of Atlanta. “But we know from the past that these aspirations often don’t turn out to be true.”
In this case, the economy that comes back is likely to look quite different from the one that closed. If social distancing rules become the new normal, causing thinner crowds in restaurants, theaters and stores, at sports arenas, and on airplanes, then fewer workers will be required.
Large companies already expect more of their workers to continue to work remotely and say they plan to reduce their real estate footprint, which will, in turn, reduce the foot traffic that feeds nearby restaurants, shops, nail salons and other businesses.
Concerns about working in close quarters and too much social interaction could also accelerate the trend toward automation, some economists say.
New jobs, mostly at low wages — as delivery drivers, warehouse workers and cleaners — are being created. But many more jobs will vanish.
“I think we’re in for a very long haul,” Mr. Bloom said.
In the meantime, the Labor Department’s latest data on unemployment claims, for new filings last week, reflects the shutdown’s continuing damage to the labor force.
“The hemorrhaging has continued,” Torsten Slok, chief economist for Deutsche Bank Securities, said of the mounting job losses. He expects the official jobless rate for May to approach 20 percent, up from the 14.7 percent reported by the Labor Department for April.
A household survey from the Census Bureau released Wednesday suggested that the pain was widespread: 47 percent of adults said they or a member of their household had lost employment income since mid-March. Nearly 40 percent expected the loss to continue over the next four weeks.
In testimony before the Senate on Tuesday, the Federal Reserve chair, Jerome H. Powell, emphasized how devastating prolonged joblessness can be for individual households and for the economy.
“There is clear evidence that when you have a situation where people are unemployed for long periods of time, that can permanently weigh on their careers and their ability to go back to work,” he said.
Emergency relief and expanded unemployment benefits that Congress approved in late March have helped tide households over. Roughly three-quarters of people who are eligible for a $1,200 stimulus payment from the federal government have received it, according to the Treasury Department.
Workers who have successfully applied for unemployment benefits are getting the extra $600 weekly supplement from the federal government, and most states have finally begun to carry out the Pandemic Unemployment Assistance program, which extends benefits to freelancers, self-employed workers and others who don’t routinely qualify. The total number of new pandemic insurance claims reported, though, was inflated by nearly a million because of a data entry mistake from Massachusetts, according to the state’s Executive Office of Labor and Workforce Development.
Mistakes, lags in reporting and processing, and weeding out duplicate claims and reports have clouded the unemployment picture in some places.
What is clear, though, is that many states are still struggling to keep up with the overwhelming demand, drawing desperate complaints from jobless workers who have been waiting two months or more to receive their first benefit check. Indiana, Wyoming, Hawaii and Missouri are among the states with large backlogs of incompletely processed claims. Another is Kentucky, where nearly one in three workers are unemployed.
The $600 supplement has become a point of contention, drawing criticism from Republican politicians who object to the notion that some workers — particularly low-wage ones — are getting more money in unemployment benefits than they would on the job. But many have also lost their employer-provided health insurance and other benefits.
Sami Adamson, a freelance scenic artist for theater, events and television shows, received the letter with her login credentials to collect benefits from New Jersey only Monday, more than two months after she first applied.
She said her partner, who is in the same line of work, had filed for jobless benefits in New York and quickly received his payments.
By the time she heard from New Jersey, a design studio had called her for a temporary assignment. She plans to eventually reclaim the lost weeks of benefits, but for now she is helping to make face shields in a large warehouse where assembly-line workers are spaced apart, handling plastic, foam and elastic.
“I don’t think I’ll need aid for the next two or three weeks,” Ms. Adamson said, “but I’m not sure too far ahead of that.”
Nearly half of the states have yet to provide the additional 13 weeks of unemployment insurance that the federal government has promised to those who exhausted their state benefits. Workers in Florida — which provides just 12 weeks of benefits, the fewest anywhere — are particularly feeling this pinch. And while several states, including those that pay the average of 26 weeks, have offered additional weeks of coverage during the pandemic, Florida has not.
Small-business owners who were hoping the Paycheck Protection Program would enable them to keep their workers on the payroll contend the program is not operating as intended.
Roy Surdej, who owns Peaches Boutique in Chicago, applied for a loan after he was forced to close and the pandemic eliminated the season’s wave of proms, quinceañeras and graduation celebrations were canceled.
Under the program, the loan turns into a grant if he rehires the 100-person staff he had built up in February in anticipation of selling thousands of ruffled, sequined and strappy dresses during the spring rush. But he said that would be impossible, given the income he had lost and the restrictions that continue to pre-empt social gatherings.
“No way can I qualify for full forgiveness,” said Mr. Surdej, who said revenue had dried up. “It’s devastating for us,” he added, saying he had no clue when he would be able to reopen and begin rehiring. “If the government can’t adjust the dates to allow us to use it properly so we can survive, then I won’t use it.”
At the same time, the Congressional Budget Office warned that businesses able to use the Paycheck Protection Program might end up laying off workers when the program expires at the end of June.
Several states have warned workers that they risk losing their benefits if they refuse an offer to work. Federal rules enacted during the pandemic say that workers are not compelled to return to unsafe working conditions, but just what constitutes such conditions is not necessarily clear.
On Tuesday, Democratic senators sent a letter to Labor Secretary Eugene Scalia to “clarify the circumstances” so that workers are not “forced to choose between going back to work in unsafe conditions, or continuing to social distance and losing their only source of income.”
Workers with child care responsibilities can stay on unemployment if public schools are closed, but once the term ends, a lack of day care or summer programs is not considered a legitimate reason. Nor are self-imposed quarantines.
Officials can lift stay-at-home and business restrictions, but then what happens? “There are lingering concerns about health, family situations, kids not in school, relatives who are sick and needing care,” said Carl Tannenbaum, chief economist at Northern Trust. “There’s going to be a very slow and gradual process of reopening and restoring employment beyond just a declaration from the statehouse or the county seat.”
Our ability to access nutritious food is a critical factor to our health and well-being, which is why it has been alarming to see images in recent weeks of cars lining up by the thousands at food banks across the country. Indeed, a university survey taken since the onset of the crises found nearly 4 in 10 Americans reported having moderate to high levels of food insecurity, compared to 11 percent of households who were food insecure in 2018, according to the USDA Economic Research Service.
In response, the federal government has given states administrative relief and funding through various Covid-19 response packages. USDA also has authorized temporary waivers that grant states greater flexibility to address the increased demands and to align with shelter-in-place and social-distancing orders.
USDA also created two new programs: the Pandemic EBT (P-EBT) and the Coronavirus Food Assistance Program (CFAP). P-EBT allows states to issue eligible households an EBT card, a type of debit card used to purchase food, with the value of the free school breakfast and lunch reimbursement rates for the number of weekdays that schools are closed due to Covid-19 (estimated to be around $5.70 per day).
As of the first week of May, 18 states have been approved to provide benefits through P-EBT and 20 additional states have submitted plans for approval. CFAP aims not only to assist families in accessing food but also ranchers and farmers who have an excess supply. Through CFAP, the USDA will procure an estimated $100 million per month of fresh fruits and vegetables and $300 million per month in dairy and meat products for food banks and other nonprofits providing food to Americans in need.
Are these measures enough? Let’s examine the changes, particularly the USDA waivers for the federal food assistance programs.
The Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps, provides financial support to supplement the food budget of needy families. USDA waivers that increased flexibility in the administration of SNAP include:
These efforts are a step in the right direction to ease family burdens, but the supplemental benefits and program flexibilities are time-limited by the federal public health emergency declaration for Covid-19. Also, the 40 percent of SNAP households who already receive the maximum benefit are excluded from the supplemental benefits. Especially as we are experience the sharpest increase in food costs in decades, we need to provide additional support to the lowest income SNAP recipients. To assist families during the longer economic recovery, advocates and policy experts are calling for the following expansions to ensure these benefits cover a larger share of the people who need them:
The Supplemental Nutrition Program for Women Infants and Children (WIC), a public health nutrition program that provides nutrition education, breastfeeding support and nutritious foods to low-income pregnant women and mothers of small children, has been providing services remotely. USDA waivers that increased flexibility in the administration of WIC include:
That’s a good start and more can be done. The Center on Budget and Policy Priorities recommends temporarily extending WIC certification periods for infants to two years as well as extending WIC eligibility from age five to age six. The National WIC Association is also advocating for an increase in the Cash Value Benefit to enhance fruit and vegetable purchases by WIC families.
The National School Lunch Program (NSLP) and Breakfast Programs, Summer Food Service Program, and the Child and Adult Care Food Program (CACFP), which serve low-income school children, quickly revamped and developed innovative ways to distribute meals to families, often expanding their regular productions. USDA waivers that increased flexibility to help better serve families during the pandemic include:
CACFP provides meals to preschool-aged children in Child Care Centers and licensed child care family homes. During the pandemic, most centers have been closed, while a majority of family homes remained open and provided services for essential workers.
According to Paula James, director of child health and nutrition at CocoKids in northern California, about 68 percent of the Contra Costa county’s family homes participating in CACFP remained open in April, and these waivers were helpful. Moving forward, she believes CACFP should continue the allowance of virtual enrollment and expand the use of that technology to regular monitoring site visits, specifically in rural areas or locations where safety could be a concern. While the pandemic has provided the opportunity to test technological advances that could streamline program operations in the future, it also revealed some systemic weaknesses, including that CACFP has no centralized database system, which is needed at the state level and requires federal guidance. Lack of technology throughout the program was a hinderance to providing additional services to families during COVID-19. “Continued use of technology into the future will be very important,” said James.
What more can be done? The federal government should extend COVID-19 related waivers for all nutrition programs until September 30, the date provided by congressional authority. While the public health restrictions may be lifting across the states, the economic fallout will likely be felt by families for many months to come.
In addition, states should leverage communication, technology, all federal supports, and evaluation to ensure they are successfully reaching as many in need as possible. This includes:
This week House Democrats passed the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, the fifth Covid-related legislative package, which includes a boost in funding for SNAP, WIC, and Child Nutrition Programs. The bill also provides support to local food banks and emergency food providers. Any bill that goes to the president should include these food access supports.
It is critical to strengthen federal food assistance programs and the social safety net while working to address the root causes of poverty to reduce health and social disparities. To learn how Altarum can assist your state in program assessment, planning, evaluation, training and analytic support for quality services, contact Tara Fowler, PhD, director of the Center for Healthy Women and Children, at tara.fowler@altarum.org.
Tenet Healthcare, a 65-hospital network based in Dallas, received federal grants and loans to help offset financial damage caused by the COVID-19 pandemic, according to the company’s presentation at the UBS Global Healthcare Conference on May 19.
Like other hospital networks across the nation, Tenet took a financial hit from canceling non-emergent and elective procedures to save capacity and supplies to treat COVID-19 patients. The company estimates that COVID-19 negatively impacted its adjusted earnings before interest, taxes, depreciation and amortization by about $125 million in the last few weeks of March.
To help navigate the financial pressures, Tenet has received funds from the $175 billion in relief aid Congress has allocated to hospitals and other healthcare providers to cover expenses or lost revenues tied to the COVID-19 pandemic. As of May 19, Tenet said it had received about $517 million in federal grants, which do not have to be repaid as long as the company meets the terms and conditions of receiving the relief aid.
Tenet also applied for and received approximately $1.5 billion in advance Medicare payments, which it must begin repaying in August.
For the first quarter of this year, which ended March 31, Tenet reported net income of $94 million on revenues of $4.52 billion. In the same period a year earlier, the company posted a net loss of $20 million on revenues of $4.55 billion.
HENRY KOTULA 