A few weeks ago I noted that, thanks to California Governor Gavin Newsom and the Democratically-controlled state legislature finally reaching a compromise agreement on how to allocate ~$330 million/year in revenue generated by the state's individual mandate penalty, around $83 million will be utilized to dramatically reduce out of pocket expenses for hundreds of thousands of ACA exchange enrollees.
The bottom line is that this funding was intended to go towards reducing health insurance premiums for ACA exchange enrollees via Covered California as supplemental subsidies to be added on top of federal ACA tax credits...but the passage of the American Rescue Plan and the subsequent Inflation Reduction Act kind of made that moot, since the federal subsidies were made more generous than what the state subsidies would have been anyway.
As a result, Gov. Newsom decided that the extra revenue should go into the general state fund, while Democrats on the state legislature wanted to redirect it to eliminate deductibles and other types of cost sharing for ACA enrollees instead. This led to an impasse for the past several months:
Updated 8/17/23: D'oh! I completely forgot about this development when I started running my state-by-state rate filing analyses this summer. No wonder Humana has disappeared from over a dozen states for 2024!
Update 3/15/23: At the request of Humana's Sales Integrity Dept., I've removed their logo from this blog entry.
Before I start, let me say that I've never been a fan of Medicare Advantage, at least as its currently structured, for a number of reasons. I am not advocating for the Medicare Advantage system--again, as currently structured--to be expanded.
Today, the Centers for Medicare & Medicaid Services (CMS) released the latest enrollment figures for Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP). These programs serve as key connectors to care for more millions of Americans.
As of August 2022, 64,942,984 people are enrolled in Medicare. This is an increase of 111,278 since the last report.
34,939,872 are enrolled in Original Medicare.
30,003,112 are enrolled in Medicare Advantage or other health plans. This includes enrollment in Medicare Advantage plans with and without prescription drug coverage.
...As of August 2022, 90,550,412 people are enrolled in Medicaid and CHIP. This is an increase of 587,411 since the last report.
Believe me, I was certain that I had finally gotten this year's Medical Loss Ratio (MLR) rebate project out of my system. I really was.
However, there was one other MLR-related issue which I've wondered about for years: The ACA requires that carriers who sell policies in the Individual and Small Group markets spend at least 80% of the premium revenue on actual medical claims (limiting them to a 20% gross margin), and 85% on the Large Group market (limiting them to 15% gross).
That accounts for around 165 million people, give or take...roughly 50% of the total U.S. population...but what about the other private (or at least semi-private) insurance markets? I'm referring, of course, to privately-administered Medicare and Medicaid plans...aka Medicare Advantage and Managed Care Organizations (MCOs).
Combined, the Medicaid and CHIP programs have around 72.5 million Americans enrolled in them as of December 2018. However, the vast majority--over 80% of them--are actually enrolled in privately managed Medicaid programs. Managed Care Organizations (MCOs) are private health insurance companies which states contract with to handle the administration and management. In some cases this works out reasonably well. In others...not so much:
More than 425,000 poor or disabled Iowans will soon have to switch health insurance carriers.
UnitedHealthcare, which manages health care for more than two-thirds of Iowans on Medicaid, is leaving the market, Gov. Kim Reynolds’ office announced late Friday afternoon.
