Anthem partners with Walmart to expand access to over-the-counter drugs

https://www.fiercehealthcare.com/payer/anthem-walmart-over-counter-medicine-medicare-advantage-retail?mkt_tok=eyJpIjoiTjJRMlpERTBObU0yWldOaiIsInQiOiJPMDVjRGNQVzcxMjIzOGt1ZTZva0R2YU1PXC9mYkczVEtYVHNHWmZzSHc1TjU1RGRZZ1o4VVprZStEV3R3VWdXWFwvQlRoYVg4cGpzakZIOFFkMkthRnVPbVwvNEUwQ3ptOVozRGQ0U3IyVDFENENmZTErMjc3TDhRYlwvaUlrT1oxSWgifQ%3D%3D&mrkid=959610

Walmart sign

Anthem has entered a new partnership with retail giant Walmart to offer members access to over-the-counter (OTC) medications.

Beginning in January, Anthem’s Medicare Advantage members will be able to use OTC plan allowances to purchase medications and other supplies such as support braces and pain relievers, the two companies announced on Monday.

Previously, MA beneficiaries with OTC allowances could purchase medications through a catalog or by calling a designated number. Some members were provided a card they could use at a limited set of retail stores.

The new partnership significantly expands access to OTC drugs and supplies by allowing members to make purchases at any of Walmart’s 4,700 locations. 

“The program with Walmart will allow consumers to pick the shopping method that best fits their lifestyle and the initiative is expected to significantly reduce the out-of-pocket cost burden for those enrolled in Anthem’s affiliated MA health plan,” Anthem spokesperson Hieu Nguyen said in an email.

Walmart says 90% of Americans live within 10 miles of a Walmart. The partnership will also give members access to free two-day shipping on orders $35 or more.

“We believe that programs like this can make a tremendous difference for healthcare consumers who often live on a fixed income or are managing chronic medical conditions,” Felicia Norwood, executive vice president and president of Anthem’s Government Business Division, said in a statement. Sean Slovenski, senior vice president of health and wellness at Walmart, said the company is “thrilled to be working with Anthem to provide its Medicare Advantage members with convenient access to our broad assortment of high-quality over-the-counter products.”

Interestingly, the partnership comes months after Walmart was reportedly considering an acquisition of Humana. Slovenski, the former vice president of innovation at Humana, joined Walmart last month. 

 

Health Insurers Had Their Best Quarter in Years, Despite the Flu

https://www.bloomberg.com/news/articles/2018-05-03/health-insurers-had-their-best-quarter-in-years-despite-the-flu

Here’s a look at how the margins of the largest in the quarter, based on data compiled by Bloomberg:

U.S. health insurers just posted their best financial results in years, shrugging off worries that the worst flu season in recent history would hurt profits.

Aetna Inc., for instance, posted its widest profit margin since 2004. Centene Corp. had its most profitable quarter since 2008. And Cigna Corp., which reported on Thursday, had its biggest margin in about seven years.

Analysts at Morgan Stanley, in a research note, said insurers are in the midst of a “hot streak.”

One big reason for the windfall is the tax cuts passed by Congress last year, which in some cases more than halved what the insurers owe the government. Aetna said its effective tax rate fell to 16.8 percent from 39.6 percent, for example. Many insurers also spent less on medical care than analysts had expected, even taking into account increased spending on flu treatments.

 

 

Anthem reports flat operating revenues due to exit from Affordable Care Act market

http://www.healthcarefinancenews.com/news/anthem-reports-flat-operating-revenues-due-exit-affordable-care-act-market?mkt_tok=eyJpIjoiT1RrME5HWmxNV0kyTkRZeCIsInQiOiJzQ2N6dzlKclF2QmpZaGZraHhUYWRwZThOSit4NjFJZ003dUtnU3NKem9WSkN0QXZUdVJVcUFIRWhMRHJZQ2I3a0N6YWNiR1pLVVFTdzdcL0hvSFl3WVR5ZVpJRWFhSUM1Y3Jyd0FRZVk0YXdOYjF3bXRWUXFXMkN1VlwvMkRMTGNpIn0%3D

Net income increased 30 percent driven by premium rate increases, the return of the health insurance tax and the acquisition of MA plans.

Anthem reported a 30 percent increase in net income for the first quarter compared to the same three months of 2017, but operating revenues remained relatively flat primarily due to the insurer’s planned exits from the Affordable Care Act marketplace.

On Wednesday, Anthem reported net income for the first quarter of $1.3 billion, versus 1 billion for the first three months in 2017.

First quarter operating revenues were relatively flat at $22.3 billion year-over-year due to a decrease in its individual market business.

In 2017, Anthem announced it would cut back its ACA footprint by about 70 percent.

Revenues were helped by premium rate increases to cover overall cost trends, the return of the health insurance tax and the acquisitions of HealthSun and America’s 1st Choice.

Anthem’s acquisition of HealthSun, completed at the end of 2017, added a Medicare Advantage health plan and delivery network in Florida.

The acquisition of America’s 1st Choice was finalized in February. The privately-held, for-profit Medicare Advantage organization  offers HMO products, including chronic special needs plans and dual-eligible special needs plans under its Freedom Health and Optimum brands in Florida. The deal added 135,000 Medicare Advantage members and included a 5 star plan.

Anthem’s medical enrollment totaled approximately 39.6 million members as of March 31, a decrease of 1 million or 2.5 percent percent, from 40.6 million at March 31, 2017.

The company said it now expects medical enrollment to be between 40.1 – 40.3 million for the full year 2018.

Counteracting the individual market decline, Anthem’s government business grew 10 percent year-over-year through a focus on serving the complex social and medical requirements of the dual special needs population.

Medical enrollment declined by 616,000 during the first quarter reflecting a decrease in the individual and local group fully-insured businesses. Medicare grew by 237,000 members and Medicaid enrollment declined by 120,000 individuals.

“We are pleased with our first quarter 2018 financial performance, which reflects our commitment to strong medical cost performance by effectively leveraging community based innovative and integrated clinical and value based care models across our markets,” said CEO and President Gail Boudreaux. “Throughout 2018, we are prioritizing investments to create a more flexible infrastructure that can quickly respond to the evolving needs of our customers and the changing healthcare environment.”

 

Study: ‘Big five’ insurers depend heavily on Medicare, Medicaid business

https://www.fiercehealthcare.com/cms-chip/big-five-insurers-medicare-medicaid-growth-profits?mkt_tok=eyJpIjoiT0RnMFkySXdPV0psWldSaCIsInQiOiJQSllQNlpcL2RhTzBDZFwvZXh5M1ZUSDJyUU5JTGw3dnh1QTVac01rZUFcL2pNUUhhMXBaQjBxK29ScHRrOHhsT3d6aE5pcFRJUWd4Sm0rYXA4S0RYVGE2N0czN2hhc2hsXC9EZk9mSGVLR0V1UFlwVDZpQmdkcll0eTBMNDUzTHlIZDIifQ%3D%3D&mrkid=959610&utm_medium=nl&utm_source=internal

Rising Stocks

Even as they’ve retreated from the Affordable Care Act exchanges, the country’s biggest for-profit health insurers have become increasingly dependent on Medicare and Medicaid for both profits and growth.

In fact, Medicare and Medicaid accounted for 59% of the revenues of the “big five” U.S. commercial health insurers—UnitedHealthcare, Anthem, Aetna, Cigna and Humana—in 2016, according to a new Health Affairs study.

From 2010 to 2016, the combined Medicare and Medicaid revenue from those insurers ballooned from $92.5 billion to $213.1 billion. The companies’ Medicare and Medicaid business also grew faster than other segments, doubling from 12.8 million to 25.5 million members during that time.

All these positive trends, the study noted, helped offset the financial losses that drove the firms to reduce their presence in the individual marketplaces. Indeed, the big five insurers’ pretax profits either increased or held steady during the first three years of the ACA’s individual market reforms (2013-2016). Their profit margins did decline during those three years, but stabilized between 2014 and 2016.

Not only do these findings demonstrate the “growing mutual dependence between public programs and private insurers,” the study authors said, but they also suggest a useful policy lever. The authors argued that in order to help stabilize the ACA exchanges, federal and state laws could require any insurer participating in Medicare or state Medicaid programs to also offer individual market plans in those areas.

Nevada has already done something similar: It offered an advantage in Medicaid managed care contract billing for insurers that promised to participate in the state’s ACA exchange. The state credited that policy with its ability to coax Centene to step in and cover counties that otherwise would have lacked an exchange carrier in 2018.

It’s far less certain, though, whether such a concept will ever be embraced at the federal level during the Trump administration, since its focus has been on unwinding the ACA rather than propping it up.

Either way, recent events underscore the study’s findings about how lucrative government business has become for major insurers. One of the main goals of CVS’ proposed acquisition of Aetna is to improve care for Medicare patients, which would help the combined company “be more competitive in this fast-growing segment of the market,” CVS CEO Larry Merlo said on a call this week.

Aetna CEO Mark Bertolini added that the transaction has “incredible potential” for Medicare and Medicaid members, as the goal is to provide the type of high-touch interaction and care coordination they need to navigate the healthcare system.

 

Moody’s: Trump Executive Actions Credit Negative for HIX Insurers

http://www.healthleadersmedia.com/health-plans/moodys-trump-executive-actions-credit-negative-hix-insurers?spMailingID=12171449&spUserID=MTY3ODg4NTg1MzQ4S0&spJobID=1261586415&spReportId=MTI2MTU4NjQxNQS2

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The investor-service company gauges impact of new ‘association’ health plans, expanded short-term insurance, and elimination of subsidies on the Obamacare exchanges.

President Donald Trump’s health-insurance executive actions last week are credit negative for insurance carriers operating on the Obamacare exchanges, New York, NY-based Moody’s Investors Service reported today.

On Oct. 12, Trump took two executive actions that will likely undermine the insurance exchanges established under the Patient Protection and Affordable Care Act (PPACA), Moody’s says:

  • In an executive order, the president eased regulations on “association” health plans and expanded the definition of short-term health insurance. The executive order calls for the federal departments of Labor, Treasury and Health and Human Services to expand insurance coverage for individuals such as allowing insurance purchases across state lines.
  • Although regulations must be put into place, association health plans will likely allow small businesses to band together to offer insurance to their employees. “Associations likely would be allowed to offer plans with lower benefits and lower costs,” Moody’s reported.
  • In a decision that did not require an executive order, Trump announced that his administration would end cost-sharing reduction (CSR) payments that subsidize the purchase of health insurance on the exchanges. The subsidies help insure low-income individuals who do not qualify for Medicaid coverage but can’t afford to buy commercial insurance health plans.
  • This year, the federal government spent about $7 billion on CSR payments.

The executive order is expected to promote creation of skimpy health plans, which would undermine the PPACA exchanges, Moody’s reported. “The introduction of lower-benefit, lower-cost plans and short-term insurance would be credit negative for health insurers that are still participating in the PPACA-governed individual market. These new plans would incentivize healthy people to exit the PPACA market, which would increase risk in the remaining pool of insureds.”

The decision to stop CSR payments will also have a credit negative effect on commercial carriers operating on the exchanges, Moody’s reported. This negative impact will fall particularly hard on commercial insurers that did not submit rates for next year based on the assumption that the CSR payments would be eliminated.

Health insurance rates are set on a state-by-state basis.

There could be an “offset” linked to the executive order that would soften the financial blow for commercial carriers operating on the exchanges, Moody’s reported. “If the executive order succeeds in bringing more healthy but currently uninsured people into the small group or individual market, that could mitigate at least some of the order’s negative effects.”

Moody’s highlighted the PPACA-exchange risk exposure of four commercial carriers in today’s report, which lists the companies’ beneficiaries on the exchanges as a percentage of their total number of health-insurance beneficiaries:

  • Indianapolis-based Anthem Inc.: 2.9%
  • Chicago-based Health Care Service Corporation: 6.8%
  • St. Louis-based Centene Corporation: 9.2%
  • Long Beach, CA-based Molina Healthcare Inc.: 20.4%