Weekly Roundup: Medicare, ACA, and Insurance Developments
MedPAC Reports $84 Billion Medicare Advantage Cost Overrun
The Medicare Payment and Advisory Commission (MedPAC) has released new estimates indicating that the federal government is projected to spend $84 billion more on Medicare Advantage (MA) enrollees than if these individuals were enrolled in traditional fee-for-service (FFS) Medicare plans. This discrepancy highlights the increasing costs associated with MA plans. MedPAC's annual report suggests that by 2025, the Centers for Medicare & Medicaid Services (CMS) is expected to spend around 20% more on MA beneficiaries compared to their FFS counterparts. These findings may impact future Medicare policy discussions and budget considerations.
Cigna Group to Sell Medicare Businesses to HCSC for $3.7 Billion
Cigna Group has announced its acquisition by Health Care Service Corp. (HCSC) of various Medicare-related businesses, totaling approximately $3.7 billion. This acquisition includes Cigna's Medicare Advantage, Cigna Supplemental Benefits, Medicare Part D, and CareAllies businesses.
The acquisition will be solidified through a four-year services agreement with Evernorth Health Services, a Cigna subsidiary, effective upon the closing of the transaction, which is expected to be completed in the first quarter of 2025, pending necessary regulatory approvals. David M. Cordani, Cigna’s chairman and CEO, emphasized the strategic nature of this move as an alignment with Cigna's disciplined management approach and focus on growth opportunities, especially in the Medicare segment.
CMS Proposes Rule to Combat Improper ACA Enrollments
On March 10, the Centers for Medicare & Medicaid Services (CMS) introduced a proposed rule aimed at reducing improper enrollments in the Affordable Care Act (ACA) Health Insurance Marketplaces. This new rule seeks to protect individuals from being enrolled without their knowledge and aims to ensure that financial assistance is provided only to those intended by the ACA.
The CMS highlighted a significant increase in complaints regarding unauthorized enrollments, with research indicating that up to 4 to 5 million people were improperly enrolled in subsidized ACA coverage in 2024, resulting in potential costs of $20 billion to federal taxpayers.
Insurance Fraud Ring Charged in ACA Scheme
An indictment has been unsealed against Cory Lloyd from Florida and Steven Strong from Texas, charging them with participating in a fraudulent scheme involving the Affordable Care Act (ACA). They allegedly submitted false applications to enroll consumers in subsidized ACA plans, targeting vulnerable populations with misleading techniques and bribes.
State Farm Seeks 22% Increase in California Insurance Rates
State Farm has requested permission from California to increase insurance rates by an average of 22%, citing a potentially "dire situation" with increased risks in the state. This move comes amidst broader discussions around the insurance industry's sustainability in high-risk areas, especially as companies reassess their pricing strategies in response to environmental changes.
CMS Teams Up with DOGE to Enhance Healthcare Efficiency
The Centers for Medicare and Medicaid Services (CMS) is collaborating with the Department of Government Efficiency (DOGE) to enhance resource efficiency and reduce government spending. This scrutiny of CMS poses a politically delicate challenge for the agency, making it a prime target for efficiency improvements.
High Discontinuation Rates for Weight Loss Drugs Due to Cost
A recent study reveals that nearly 65% of individuals who attempted to lose weight using the popular GLP-1 medications discontinued their usage within a year. Financial factors significantly impact patients' decisions to continue or cease using these weight loss aids, posing challenges to accessibility.
Hospital-at-Home Movement Gains Traction in the US
The hospital-at-home movement is gaining traction in the US, providing patients with hospital-level care in their homes. Medicare's involvement has been crucial in advancing hospital-at-home programs since the pandemic, with potential benefits including safety and cost-effectiveness.
Study Reveals Medicare Advantage Falls Short for Seniors
A recent study highlights that many seniors enrolled in Medicare Advantage plans remain unaware of the additional benefits available to them. Despite the marketing of supplemental benefits, seniors often find out-of-pocket costs similar to or slightly lower than traditional Medicare plans.