insurance

How the ACA’s risk adjustment panned out

Adobe

The Affordable Care Act’s risk adjustment program is significantly different from the way risk adjustment operates in Medicare Advantage, in one particular way: It creates winners and losers. Yet again, the biggest winners in the ACA’s program were Blue Cross Blue Shield plans, and the biggest losers were startup insurers that grew too quickly.

More than two dozen BCBS insurers are projected to collect more than $4.7 billion from competing insurers on the ACA marketplaces, according to a STAT analysis of new federal data. The biggest amounts are concentrated among a few dominant Blues conglomerates.

Meanwhile, Bright Health Group and Friday Health Plans each owe more than $1 billion. Relatedly, Bright is now out of health insurance, and Friday has shut down.

Read the story to see how Centene, Cigna, Kaiser Permanente, UnitedHealthcare, and other health insurers fared — including the BCBS insurers that are owed the most in ACA risk adjustment funds.

federal government

Grab your plate and gorge at the regulatory trough

President Biden on Friday released a smorgasbord of documents and pieces of guidance that will clamp down on specific niches of the hospital and insurance worlds.

One of the biggest changes will overhaul the duration of short-term health plans, which do not have to abide by federal requirements to offer certain benefits and accept all eligible people. The Biden administration is proposing to lower the maximum initial length of a short-term plan to three months, and no short-term plan with renewals can exceed four months — limits that were similar to what the Obama administration implemented. The Trump administration changed the rules in 2018 so short-term plans could initially last for less than a year and could be renewed for up to three years. 

The Biden administration also wants to tighten adherence to the No Surprises Act — namely, hospitals that have contracts with insurers actually consider themselves to be in-network. Hospitals also need to be more transparent with their facility fees, which my colleague Annalisa Merelli profiled.

An important but undercovered element was a new effort to study how medical credit cards and loans are being used in health care — and whether hospitals and other providers are leading patients astray by having them sign up for those types of payment products. Federal agencies are concerned tax-exempt hospitals are steering patients to things like medical credit cards instead of “making reasonable efforts to determine whether an individual is eligible for financial assistance,” according to a notice. The public has until September to weigh in.

home health

Home health sues — but doesn’t mention profits

The National Association of Home Care and Hospice sued the Biden administration late last week to halt the government’s recent proposed rule that would cut Medicare payments to home health agencies by 2.2% in 2024. It’s a classic example of a lobbying group turning the dial to 11 when government cuts are on the table.

NAHC, the home health industry’s lobbying group, said Medicare is threatening to put home health operators out of business. But one thing NAHC failed to mention: Profits in the home health industry remain near all-time highs.

Home health profit margins averaged 16.4% between 2001 and 2019, according to the Medicare Payment Advisory Commission. In 2021, profit margins hovered above 26%. I’ve got more on that, here.