One-third of small businesses say health insurance is a top concern during COVID-19: survey

Dive Brief:

  • Small businesses are struggling to cover the high costs of healthcare for their employees after a year of COVID-19, according to a new poll sponsored by the Small Business Majority and patient advocacy group Families USA.
  • More than one in three small businesses owners said it’s a challenge getting coverage for themselves and their workers. That pain is particularly acute among Black, Asian American and Latino businesses, which have fewer resources than their White counterparts, SBMfound.
  • As a result, small businesses want policymakers to expand coverage access and lower medical costs, beyond the temporary fixes included in the sweeping $1.9 trillion American Rescue Plan passed by Congress earlier this month.

Dive Insight:

Providing health insurance can be pricey for small employers, a challenge that’s been exacerbated by the pandemic and its subsequent economic downturn.

Accessing health insurance has been a major barrier over the course of COVID-19, the national survey of 500 businesses with 100 employees or fewer in November found. The poll, conducted by Lake Research Partners for SBM and Families USA, found many such businesses have had to slash benefits during the pandemic. Among small business owners that have reduced insurance benefits, 36% have trimmed their employer contribution for medical premiums and 56% switched to a plan with a lower premium.

Additionally, one in five small business owners say they plan to change or lower coverage in the next few months, while only about a quarter have been able to maintain coverage for temporarily furloughed employees.

The situation is bleaker for minority-owned small businesses. Overall, 34% say accessing health insurance has been a top barrier during COVID-19, but that figure rises to 50%, 44% and 43% for Black, Asian American and Latino business respondents, SBM, which represents some 80,000 small businesses nationwide, said.

That’s in line with past SBM polling finding non-white entrepreneurs are more likely to face temporary or permanent closure in the next few months than their white counterparts, and are also more likely to struggle with rent, mortgage or debt repayments.

Though employers expect a more stabilized business environment starting in the second quarter, many are still reeling from difficult economic circumstances last year. COVID-19 capsized normal efforts to calculate medical cost trends for 2021, complicating financial planning for the year ahead — especially for fragile small businesses.

Washington did allocate a significant amount of financial aid for small businesses last year, and the ARP includes numerous provisions including increased subsidies for health insurance premiums for two years, and extended COBRA coverage for laid off employees through September.

But respondents to this latest polling urged for more long-term support.

The most popular policy proposal was bringing down the cost of prescription drugs, with 90% of businesses saying they supported the measure and 54% saying they were in strong support. Protecting coverage for people with pre-existing conditions was also popular, with 87% of small business owners in total support and 51% strongly supporting.

Three-fourths of small business owners strongly support a public health insurance option, while 73% support expanding Medicaid eligibility in all states and 66% support letting people buy into Medicare starting at age 55.

Both a public option and lower age of eligibity for Medicare are key tenets of President Joseph Biden’s healthcare plan — though getting both through Congress is unlikely. And long-time business groups like the Chamber of Commerce and the National Federation for Independent Business hold major sway on such issues and tend to be more recalcitrant on progressive policy changes.

Still, calls have been mounting for employers, which insure more than half of the U.S., to do more to move the needle on medical costs, as price increases outpace overall inflation.

A survey of large to mid-size employers from the National Alliance of Healthcare Purchaser Coalitions published Wednesday found at least three-fourths of employers support drug price regulation, surprise billing regulation, hospital price transparency and hospital rate regulation.

Selling Medicaid expansion to the holdout states

https://mailchi.mp/d88637d819ee/the-weekly-gist-march-19-2021?e=d1e747d2d8

The American Rescue Plan stimulus package just sweetened the deal for the twelve holdout states that haven’t yet expanded Medicaid. In exchange for expanding eligibility to the roughly four million adults with incomes up to 133 percent of the federal poverty level, new expansion states will also be eligible for a five percent increase in the federal matching rate for their entire traditional Medicaid population for a two-year period.

The graphic above shows the cumulative fiscal impact for holdout states, should all Medicaid-eligible individuals enroll. Since the traditional Medicaid population is so much larger than the expansion population, the temporary increase more than offsets states’ cost to cover their share of the expansion, resulting in an estimated net fiscal benefit of almost $10B. While the net benefit would vary from state to state, a Kaiser Family Foundation analysis found the two most populous non-expansion states, Texas and Florida, could net up to $1.9B and $1.8B respectively across the two-year period.
 
Medicaid expansion has had a significant positive financial impact on hospitals, reducing uncompensated care and increasing overall operating margin by an average of 1.7 percent.

A recent analysis by the Center on Budget and Policy Priorities found uncompensated care costs as a share of hospital expenses fell an average of 45 percent in Medicaid expansion states between 2013 and 2017. So far, only two states eligible for the enhanced expansion, Alabama and Wyoming, have signaled interest in taking advantage of the new deal. Convincing the remaining ten to follow suit will require intense and coordinated advocacy efforts from the healthcare and business communities. Making the financial case for expansion should prove straightforward, compared to overcoming long-entrenched political opposition. 

Becerra squeaks through confirmation vote to become HHS secretary

Becerra squeaks through confirmation vote to become HHS secretary - The  Washington Post

Xavier Becerra narrowly won confirmation Thursday to lead the Department of Health and Human Services, the agency pivotal to President Biden’s urgent goal of defeating the coronavirus pandemic and expanding access to health care.

Becerra, a congressman from Los Angeles for two dozen years and then California attorney general, squeaked by on a vote of 50 to 49, the closest margin for any of the Biden cabinet members the Senate has confirmed so far.

He becomes the first Latino secretary of HHS, the largest federal department in terms of spending. The department includes agencies at the core of the federal response to the pandemic that has infected more than 29.5 million people in the United States and killed more than 535,000. They include the National Institutes of Health, the Centers for Disease Control and Prevention, the vaccine-approving Food and Drug Administration, and the Centers for Medicare and Medicaid Services, which oversees the country’s vast public insurance programs.

Sen. Ron Wyden (D-Ore.), chairman of the Senate Finance Committee, which considered the nomination, said that “after four years of going in reverse,” Becerra will make it “possible to go to drive and actually make progress for the American people, progress in terms of lowering the cost of health care.”

Republican Sen. John Barrasso (Wyo.), countered that Becerra is “an aggressive culture warrior from the radical left,” who is “out of touch with the views of the American people.” Barrasso noted that, as state attorney general, Becerra sued the Trump administration more than 150 times over immigration, environmental and health policies.

“In this time of crisis, our secretary of Health and Human Services may be the single most important member of the president’s cabinet,” Barrasso said, contending that “the president has chosen a nominee, no public health experience, extremely partisan record.”

Sen. Susan Collins (R-Maine) was the only member of the GOP to vote for Becerra’s confirmation along with a solid wall of Senate Democrats.

During his confirmation hearing last month before the Senate Finance Committee, Becerra said, “The mission of HHS — to enhance the health and well-being of all Americans — is core to who I am.”

In keeping with Biden’s emphasis on portraying his administration’s top rung as diverse and having working-class roots like his own, Becerra told the senators his immigrant parents had insurance through his father’s laborers union, making his family more fortunate when he was a boy than many of their neighbors.

As a longtime member of the House Ways and Means Committee, Becerra testified, he worked on several major pieces of health-care legislation, including the Children’s Health Insurance Program created in the late 1990s and changes to the way Medicare is run and financed, as well as the Affordable Care Act.

He did not mention that he was a longtime advocate of a single-payer health-care system, akin to the Medicare-for-all proposals backed by several Democratic candidates in last year’s presidential election, but rejected by Biden. Becerra has renounced his previous support since his nomination, echoing the president’s view that affordable insurance coverage should be widened by building upon the ACA.

Becerra, 63, became a lightning rod for conservatives immediately after Biden announced his selection in early December.

Senate Republicans targeted his defense of abortion rights. They contended he is unqualified because he is not a physician, though few HHS secretaries have had medical training. And they have denounced his previous advocacy of a larger government role in health insurance.

An undercurrent running through opposition to his nomination was Becerra’s leadership in recent years of a coalition of Democratic attorneys general fighting to preserve the ACA. Republicans, including President Donald Trump, are seeking to overturn the 2010 law in a case now before the Supreme Court.

Sen. James Inhofe (R-Okla.) lambasted Becerra, saying he has “an appalling track record disrespecting the sanctity of life. . . . He has no shame when it comes to his pro-abortion beliefs.”

Inhofe also criticized Becerra’s support last year for California’s ban on indoor worship services as part of the state’s efforts to slow the cornavirus’s spread. And the senator criticized Becerra’s position that undocumented immigrants should be allowed public benefits, such as Medicaid.

Senate Majority Leader Charles E. Schumer (D-N.Y.) said Republicans’ arguments against Becerra “almost verge on the ridiculous.”

Schumer said Republicans challenging Becerra’s qualifications for the job had embraced the nomination of Alex Azar as Trump’s second HHS secretary, though he was a pharmaceutical executive who also was an attorney and had no medical training.

In addition to working to tame the pandemic, which Biden has identified as the government’s job number one for now, Becerra will face many major decisions at the helm of the sprawling department over whether to continue or reverse policies established by the Trump administration.

CMS has already announced it was rescinding a significant Medicaid policy of the Trump era that had allowed states to require some residents to hold a job or be preparing for work to qualify for the safety-net insurance program. HHS officials are reviewing other Trump-era Medicaid policies.

Another HHS agency, the Administration for Children and Families, oversees the nation’s policies regarding welfare and unaccompanied children coming across the country’s borders — a flashpoint during the Trump administration.

The CDC, the government’s public-health agency, has been working to regain its footing and scientific moorings after repeated intrusions into its advice to the public by the Trump White House. The agency has been involved in the largest mass vaccination campaign in U.S. history to immunize the public against the coronavirus. And it is developing guidance on aspects of American life — and ongoing public safety measures — as research findings evolve for the virus and vaccine’s effects.

The FDA is in the thick of decisions about coronavirus vaccines, developed in record time, as additional manufacturers, such as AstraZeneca, have devised them and tested their safety and effectiveness. The three vaccines being given to about 2 million Americans a day — by Pfizer-BioNTech, Moderna and Johnson & Johnson — are being allowed so far for emergency use and have not yet secured full FDA approval.

Becerra almost certainly will continue to face hostility from social conservatives after his swearing in, expected Friday.

Roger Severino, who led HHS’s Office for Civil Rights during the Trump administration and created a division to promote “conscience and religious freedom,” is building an “HHS Accountability Project” within the conservative Ethics and Public Policy Center.

While at HHS, Severino tangled directly with Becerra during his tenure as attorney general of the nation’s most populous state, twice citing him in violation of federal laws for upholding California statutes involving abortion rights.

Severino said this week he believes those on the right might find common ground with Biden health officials on disability rights. But on matters of abortion and deference to religion, Severino said, “We will be watching.”

The ARP comes to the rescue of the ACA, for now

https://mailchi.mp/b0535f4b12b6/the-weekly-gist-march-12-2021?e=d1e747d2d8

ACA Enrollment is BACK, BIGTIME! Here's *10* important things to remember  to help you #GetCovered! | ACA Signups

On Thursday, President Biden signed the American Rescue Plan (ARP) Act of 2021 into law, committing nearly $1.9T of federal spending to boost the nation’s recovery from the coronavirus pandemic. In addition to direct payments to American families, extension of unemployment benefits, several anti-poverty measures, and aid to state and local governments, the plan also contains several key healthcare measures.

Approved by Congress on a near party-line vote using the budget reconciliation process, the law includes the broadest expansion of the 2010 Affordable Care Act (ACA) to date. It extends subsidies for upper-middle income individuals to purchase coverage on the Obamacare exchanges, caps premiums for those higher earners at a substantially lower level, and boosts subsidies for those at the lower end of the income scale.

The Congressional Budget Office (CBO) estimates that expanded ACA subsidies in the ARP will result in 2.5M more Americans gaining coverage in the next two years. Fully subsidized COBRA coverage for workers who lost their jobs due to COVID is also extended through the end of September, which the CBO estimates will benefit an additional 2M unemployed Americans.

The ARP also puts in place new support for Medicaid, enhancing coverage for home-based care, maternity services, and COVID testing and vaccination, and providing new incentives for the 12 states which haven’t yet expanded Medicaid eligibility under the ACA to do so. In addition to the ACA’s 90 percent match for those states’ Medicaid expansion populations, the lucky dozen will also receive a 5 percent bump to federal matching for the rest of their Medicaid populations should they choose to expand.
 
Three policy changes of keen interest to providers were left out of the final version of the bill. First, while a special relief fund of $8.5B was created for rural providers, there was no additional allocation of relief funds for hospitals and other providers, similar to the $178B allocated by the CARES Act, despite initial proposals of up to $35B in additional funding. (Around $25B of the initial round of provider relief is still unspent.) Second, the ARP did not extend or alter the repayment schedule for advance payments to providers made last year, in spite of industry pressure to implement more favorable repayment conditions. Finally, the new law does not extend last year’s pause on sequester-related cuts to Medicare reimbursement, although the House is expected to consider a separate measure to address that issue next week.

Notably, the coverage-related provisions of the ARP are only temporary, lasting through September of next year. That sets up the 2022 midterm elections as yet another campaign cycle dominated by promises to uphold and protect the Affordable Care Act—by then a 12-year-old law bolstered by this week’s COVID recovery legislation.

THE BIG DEAL—House passes $1.9T coronavirus relief bill

https://thehill.com/policy/finance/542448-heres-whats-in-the-19t-covid-19-relief-package

Will there be a third stimulus check? Biden's Deputy Press Secretary on American  Rescue Plan: 'The time for bold action is now' - ABC11 Raleigh-Durham

The House on Wednesday passed the mammoth $1.9 trillion COVID-19 relief package, which President Biden is expected to sign Friday.

The House approved the relief package in a starkly partisan 220-211 vote, sending the legislation to the White House and clinching Democrats’ first big legislative victory in the Biden era. No Republicans voted for the package and all but one House Democrat—Rep. Jared Golden of Maine—supported it. The Hill’s Cristina Marcos has more here.

The political split: Unlike the previous relief measures enacted last year, Democrats barely bothered to negotiate with Republicans and pushed the relief package through Congress along party lines using the budget reconciliation process. That allowed them to go as big as they wanted to go without running into a Senate GOP filibuster.

  • Republicans argue the use of a process dodging the filibuster shows Biden wasn’t serious about bringing unity, and House GOP lawmakers on Wednesday warned of the bill’s total cost.
  • But Democrats think Republicans will pay for their opposition to the popular bill and argued that they would oppose anything Biden proposed.

What’s in the $1.9T COVID-19 relief packageAlong with $1,400 direct payments to households, an extension of expanded unemployment benefits, and aid for state and local governments, the package is loaded with other provisions intended to speed up the recovery from the recession and help struggling families fight the impact of COVID-19.

  • Tax credits: The bill increases the child tax credit for households below certain income thresholds for 2021 and makes it fully refundable, and also expands the earned income tax credit for the year.
  • Child care: $15 billion for grants to help low-income families afford child care and increases the child and dependent care tax credit for one year.
  • Pensions: $86 billion to bailout struggling union pension funds.
  • Transportation: $30 billion to bolster local subway and bus systems, $8 billion for airports, $1.5 billion for furloughed Amtrak workers, and $3 billion for wages at aerospace companies.
  • Housing: $27.4 billion in emergency rental assistance, another $10 billion to help homeowners avoid foreclosure, $5 billion in vouchers for public housing, $5 billion to tackle homelessness and $5 billion more to help households cover utility bills.
  • Small businesses: The American Rescue Plan broadens eligibility guidelines for the Paycheck Protection Program, allowing more nonprofit entities to be eligible, adds $15 billion in emergency grants and also sets aside more than $28 billion in funding for restaurants.
  • ObamaCare subsidies and Medicaid expansion: The bill increases ObamaCare subsidies through 2022 to make them more generous, a longtime goal for Democrats, and opens up more fully subsidized plans to individuals. It also would provide extra Medicaid funding to states that expand the program and have yet to do so.

Why Biden Has a Chance to Cut Deals With Red State Holdouts on Medicaid

Image result for medicaid expansion map

President Joe Biden has an unexpected opening to cut deals with red states to expand Medicaid, raising the prospect that the new administration could extend health protections to millions of uninsured Americans and reach a goal that has eluded Democrats for a decade.

The opportunity emerges as the covid-19 pandemic saps state budgets and strains safety nets. That may help break the Medicaid deadlock in some of the 12 states that have rejected federal funding made available by the Affordable Care Act, health officials, patient advocates and political observers say.

Any breakthrough will require a delicate political balancing act. New Medicaid compromises could leave some states with safety-net programs that, while covering more people, don’t insure as many as Democrats would like. Any expansion deals would also need to allow Republican state officials to tell their constituents they didn’t simply accept the 2010 health law, often called Obamacare.

“Getting all the remaining states to embrace the Medicaid expansion is not going to happen overnight,” said Matt Salo, executive director of the nonpartisan National Association of Medicaid Directors. “But there are significant opportunities for the Biden administration to meet many of them halfway.”

Key to these potential compromises will likely be federal signoff on conservative versions of Medicaid expansion, such as limits on who qualifies for the program or more federal funding, which congressional Democrats have proposed in the latest covid relief bill.

But any deals would bring the country closer to fulfilling the promise of the 2010 law, a pillar of Biden’s agenda, and begin to reverse Trump administration efforts to weaken public programs, which swelled the ranks of the uninsured.

“A new administration with a focus on coverage can make a difference in how these states proceed,” said Cindy Mann, who oversaw Medicaid in the Obama administration and now consults extensively with states at the law firm Manatt, Phelps & Phillips.

Medicaid, the half-century-old health insurance program for the poor and people with disabilities, and the related Children’s Health Insurance Program cover more than 70 million Americans, including nearly half the nation’s children.

Enrollment surged following enactment of the health law, which provides hundreds of billions of dollars to states to expand eligibility to low-income, working-age adults.

However, enlarging the government safety net has long been anathema to most Republicans, many of whom fear that federal programs will inevitably impose higher costs on states.

And although the GOP’s decade-long campaign to “repeal and replace” the health law has largely collapsed, hostility toward it remains high among Republican voters.

That makes it perilous for politicians to embrace any part of it, said Republican pollster Bill McInturff, a partner at Public Opinion Strategies. “A lot of Republican state legislators are sitting in core red districts, looking over their shoulders at a primary challenge,” he said.

Many conservatives have called instead for federal Medicaid block grants that cap how much federal money goes to states in exchange for giving states more leeway to decide whom they cover and what benefits their programs offer.

Many Democrats and patient advocates fear block grants will restrict access to care. But just before leaving office, the Trump administration gave Tennessee permission to experiment with such an approach.

“It’s a frustrating place to be,” said Tom Banning, the longtime head of the Texas Academy of Family Physicians, which has labored to persuade the state’s Republican leaders to drop their opposition to expanding Medicaid. “Despite covid and despite all the attention on health and disparities, we see almost no movement on this issue.”

Some 1.5 million low-income Texans are shut out of Medicaid because the state has resisted expansion, according to estimates by KFF. (KHN is an editorially independent program of KFF.)

An additional 800,000 people are locked out in Florida, which has also blocked expansion.

Two million more are caught in the 10 remaining holdouts: Alabama, Georgia, Kansas, Mississippi, North Carolina, South Carolina, South Dakota, Tennessee, Wisconsin and Wyoming.

Advocates of Medicaid expansion, which is broadly popular with voters, believe they may be able to break through in a handful of these states that allow ballot initiatives, including Mississippi and South Dakota.

Since 2018, voters in Idaho, Nebraska, Utah, Oklahoma and Missouri have backed initiatives to expand Medicaid eligibility, effectively circumventing Republican political leaders.

“The work that we’ve done around the country shows that no matter where people live — red state or blue state — there is overwhelming support for expanding access to health care,” said Kelly Hall, policy director of the Fairness Project, a nonprofit advocacy group that has helped organize the Medicaid measures.

But most of the holdout states, including Texas, don’t allow citizens to put initiatives on the ballot without legislative approval.

And although Florida has an initiative process, mounting a ballot campaign there is challenging, as political advertising is expensive. Unlike in many states, Florida’s leading hospital association hasn’t backed expansion.

Another route for expansion: compromises that could win over skeptical Republican state leaders and still get the green light from the Biden administration.

The Obama administration approved conservative Medicaid expansion in Arkansas, which funneled enrollees into the commercial insurance market, and in Indiana, which forced enrollees to pay more for their medical care.

Money is a major focus of current talks in several states, according to health officials, advocates and others involved in efforts across the country.

The health law at first fully funded Medicaid expansion with federal money, but after the first three years, states had to begin paying part of the tab. Now, states must come up with 10% of the cost of expansion.

Even that small share is a challenge for states, many of which are reeling from the economic downturn caused by the pandemic, said David Becker, a health economist at the University of Alabama-Birmingham who has assisted efforts to expand Medicaid in that state.

“The question is: Where do we get the money?” Becker said, noting that some Republicans may be open to expanding Medicaid if the federal government pays the full cost of the expansion, at least for a year or two.

Other efforts to find ways to offset state costs are underway in Kansas and North Carolina, which have Democratic governors whose expansion plans have been blocked by Republican state legislators. Kansas Gov. Laura Kelly this month proposed using money from the sale and taxation of medical marijuana.

Some Democrats in Congress are pushing to revise the health law to provide full federal funding to states that expand Medicaid now. Separately, in the stimulus bill unveiled last week, House Democrats proposed an additional boost in total Medicaid aid to states that expand.

Other Republicans have signaled interest in partly expanding Medicaid, opening the program to people making up to 100% of the federal poverty level, or about $12,900, rather than 138%, or $17,800, as the law stipulated.

The Obama administration rejected this approach, but the idea has gained traction in several states, including Georgia.

It’s unclear what kind of compromises the new administration may consider, as Biden has yet to even nominate someone to oversee the Medicaid program.

Some Democrats say it’s time to give up the search for middle ground with Republicans on Medicaid.

A better strategy, they say, is a new government insurance plan, or public option, for people in non-expansion states, a strategy Biden endorsed on the campaign trail.

“Democrats can no longer countenance millions of Americans living in poverty without insurance,” said Chris Jennings, a Democratic health care strategist who worked in the White House under Presidents Bill Clinton and Barack Obama and served on Biden’s transition team.

“This is why the Biden public option or other new ways to secure affordable, meaningful care should become the order of the day for people living in states like Florida and Texas.”

Uninsured rates among young people dropped under ACA: Urban Institute

Young adults were among the most likely to be uninsured prior to the Affordable Care Act, but the law’s Medicaid expansion had a significant impact on those rates, according to a new study.

Research published by Urban Institute, this week shows the uninsured rate for people aged 19 to 25 declined from 30% to 16% between 2011 and 2018, while Medicaid enrollment for this population increased from 11% to 15% in that window.

The coverage increases were felt most keenly between 2013 and 2016, when many of the ACA’s key tenets were carried out, including Medicaid expansion and the launch of the exchanges, according to the study.

Before the ACA, adolescents in low-income households often aged out of eligibility for public health insurance coverage through Medicaid or the Children’s Health Insurance Program as they entered adulthood,” the researchers wrote. “Further, young adults’ employment patterns made them less likely than older adults to have an offer of employer-sponsored insurance coverage.”

States that expanded Medicaid saw greater declines in the number of young people without insurance, the study found.

On average, the uninsured rates among young people declined from nearly 28% in 2011 to 11% in 2018, according to the analysis. In non-expansion states, however, the uninsured rate decreased from about 33% to nearly 21%.

In expansion states, Medicaid enrollment for people aged 19 to 25 rose from 12% in 2011 to close to 21%, according to the study, while enrollment in non-expansion states remained flat.

Urban’s researchers estimate that Medicaid expansion is linked to a 3.6 percent point decline in uninsurance among young people overall, and had the highest impact on young Hispanic people. Uninsurance decreased by 6 percentage points among Hispanic young people, the study found, and that population had the largest uninsured rate prior to the ACA.

“The effects of Medicaid expansion on young adults’ health insurance coverage and health care access provide evidence of the initial pathways through which Medicaid expansions could improve young adults’ overall health and trajectories of health throughout adulthood,” the researchers wrote.

“Beyond coverage and access to preventive care, Medicaid expansion may affect young adults’ health care use in ways not examined in our report. Thus, ensuring young adults have health insurance coverage and access to affordable care is a critical first step toward long-term health,” they wrote.

Molina expects utilization to remain depressed in 2021

https://www.healthcaredive.com/news/molina-expects-utilization-to-remain-depressed-in-2021/594895/

Dive Brief:

  • Molina’s net income fell sharply in the fourth quarter as the insurer was forced to refund rates to some of its state partners as COVID-19 continues to depress normal care utilization, CEO Joe Zubretsky told investors Thursday.
  • Although utilization remained curtailed, COVID-19 costs were higher in the fourth quarter than any other quarter in 2020, Zubretsky said. As such, Molina’s medical care ratio for the quarter increased to 90.8% from 86% the prior-year period.
  • Still, Molina remained in the black for the full year of 2020. Looking ahead, the company expects utilization to improve, though does not expect it to rebound entirely. At the same time, the company expects direct COVID-19 costs to come in lower than last year.

Dive Insight:

Insurers have largely remained unbruised from the pandemic, unlike some providers, but the fourth quarter was a different story.

The pandemic took a bite out of Molina’s net income in the fourth quarter as the company reported that figure fell to $34 million from $168 million in Q4 2019.

The biggest contributor to the impact on the bottom line was Medicaid refunds to states, including California, Michigan and Ohio. States have clawed back some of the money they pay insurers like Molina as members continue to defer care, which is a benefit to insurers as they then pay out less.

Molina painted a clearer picture of this scenario during Thursday’s conference call with investors.

For the full year, Molina estimated that medical cost suppression amounted to $620 million while direct COVID-19 costs amounted to $200 million. In other words, curbed utilization continued to outweigh direct COVID-19 costs, resulting in a $420 million benefit from the pandemic, which the company characterized as a surplus.

But states took back a total of $565 million through rate refunds. Overall, the net impact of COVID-19 was a $180 million hit to Molina for 2020 when factoring in other costs.

Looking ahead, executives seemed cautiously optimistic for 2021 but noted headwinds from the pandemic will persist. While the forecast reflects future growth, Zubretsky said, “it is a constrained picture” of the company’s potential earnings.

Some of those headwinds include Medicare risk scores that don’t fully capture the acuity of their Medicare members. As seniors put off care in 2020, companies like Molina were unable to capture diagnosis codes to help them determine how sick members are and the ultimate risk they pose.

Still, there are some bright spots. As the public health emergency is likely to be continued throughout the remainder of the year, it means that redeterminations will remain halted, or, in other words, Medicaid members will not be kicked off coverage.

This was a boon for Molina in 2020, as it allowed them to pick up a significant number of new members. Overall, it was a major catalyst for Medicaid membership growth in 2020, Zubretsky said.

Molina expects care utilization to improve this year but not fully return to normal. Instead, it expects utilization suppression to be about one third of 2020 levels.

Molina, which solely focuses its portfolio on government sponsored and marketplace plans, said it expects to pick up as many as 30,000 additional members during the Affordable Care Act special enrollment period.

Opening up a special enrollment period was one of the first moves made by the new administration in the White House. Zubretsky seems enthused by the recent moves through executive orders and the unfolding bill developments in Congress that are looking to raise premium subsidies on the exchanges.

Those early actions “just couldn’t be better for government sponsored managed care, and we’re pleased to see that progress already being made,” Zubretsky said.

Aetna to reenter the Affordable Care Act market

https://www.healthcarefinancenews.com/news/aetna-reenter-affordable-care-act-market

New CVS Health President and CEO Karen Lynch
New CVS Health President and CEO Karen Lynch

The ACA business has improved and Aetna will sell individual coverage in 2022, CEO says.

After a three-year hiatus, Aetna is reentering the Affordable Care Act market.

Karen Lynch, the new president and CEO of CVS Health, said during an earnings call on Tuesday that Aetna will reenter the ACA business. The ACA business has improved, she said, and Aetna will rejoin the ACA marketplace, selling individual coverage in 2022. 

“We’ll accelerate the pace of progress via targeted investments that will drive consumer-focused strategy,” Lynch said. “We will create future economic benefit for CVS Health and its shareholders.”

WHY THIS MATTERS

Aetna said in 2017 that it would leave the market in 2018.

Aetna joined other insurers in leaving or downsizing its footprint as premiums rose and insurers lost money.

The ACA market has grown since the exodus and shown strength in 2021, in lower premiums for consumers, steady enrollment numbers and insurers expanding their marketplace reach.

As COVID-19 has cost many their employer-based health insurance, the Biden Administration has opened a new enrollment period that started on February 15 and goes through May 15.

THE LARGER TREND

President Donald Trump and Congressional GOP members attempted to get rid of the Affordable Care Act that was passed into law by his predecessor, President Barack Obama.

Trump’s successor, President Biden, has promised to strengthen the market, even as the Supreme Court considers whether the ACA law remains valid without the individual mandate’s tax penalty. The Supreme Court is expected to hand down a decision by June.

In 2018, Aetna became part of CVS Health in a $69 billion merger.

Bolstering coverage availability with consumer education

https://mailchi.mp/41540f595c92/the-weekly-gist-february-12-2021?e=d1e747d2d8

Starting next week, millions of uninsured Americans will have the opportunity to sign up for coverage on the federal insurance marketplace, the result of President Biden’s executive order to create a 90-day special enrollment period. The graphic above highlights the potential impact of this enrollment period on the uninsured population.

According to a Kaiser Family Foundation analysisof the nearly 15M uninsured who are marketplace-eligible, nearly 9M qualify for free or subsidized coverage. Enrollment of these individuals will come with added challenges, as they tend to be less educated, younger, more rural, and less likely to speak English, as compared to the general population. An Urban Institute survey found almost half of uninsured individuals are unfamiliar with marketplace coverage options, and nearly two-thirds lack an understanding of available financial assistance

The federal government is dedicating $50M to advertise the special enrollment period, to assist with outreach and education. Given the population most likely to have lost insurance due to the COVID pandemic, this funding will be critical to making sure eligible people take advantage or free or low-cost coverage.