JustCare

Tag: Profits

  • How much profit should shareholders reap from health care?

    How much profit should shareholders reap from health care?

    A group of Yale researchers looked at where all the profits from the health care industrial complex flow. They found that the vast majority of money earned by pharmaceutical corporations, for-profit hospitals, health insurers and other publicly traded companies went to corporate shareholders, reports Sujata Srinavasan for Connecticut Public Radio.

    In the 21 years between 2001 and 2022, the researchers found that $2.6 trillion went to shareholders. Their study is published in JAMA Internal Medicine. The number is shocking for at least three reasons. First, the $2.6 trillion represents 95 percent of the profits. Second, only five percent of the money went to medical research and development, improved hospitals or pharmaceutical research. Third, the returns to shareholders more than tripled over that period.

    Given how much Americans pay for health care and the burden of medical debt on millions of us, it’s time for the government to rein in the prices we are being charged or, at the very least, limit corporate profits with the goal of lowering costs. Today, about 12 percent of adults in the US owe more than $10,000 in medical debt. Should there be a limit on corporate profits to reduce health care costs?

    With increasing vertical integration in health care, e.g. UnitedHealth owning providers, a pharmacy benefit manager, claims processing centers, insurance companies and more, unless there is a limit on corporate profits, it’s more than likely that health care costs will continue to mount. Health care corporations are not putting patients first.

    Corporate shareholder returns are not the only funds being stripped out of our health care system and driving up costs. The researchers did not look at the $1 trillion that private equity firms invested in health care over the last decade. These companies have destabilized a large number of hospitals, taking out profits and leaving them in major debt. They have also profited wildly from investments in home care agencies at the expense of older adults.

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  • UnitedHealth physicans help boost insurers’ Medicare payments

    UnitedHealth physicans help boost insurers’ Medicare payments

    UnitedHealth now employs or contracts with about 10 percent of the physicians in the US. It’s one way UnitedHealth maximizes Medicare Advantage profits, report Anna Wilde Mathews, Christopher Weaver and Tom McGinty for the Wall Street Journal. UnitedHealth incentivizes its physicians to include additional diagnoses codes on Medicare Advantage patient records, which enables UnitedHealth to receive higher Medicare payments.

    UnitedHealth advises its physicians to check their Medicare Advantage patients for certain diagnoses. So, in Eugene, Oregon, one physician explained that before he could move from one patient to another, he must enter into a software system whether his patient had any of a list of diagnoses. In many cases, the diagnoses had nothing to do with the patient, such as hyperaldosteronism, which is a hormone condition related to high blood pressure.

    Rather than ensuring their doctors focus on treating Medicare Advantage patients for the conditions these patients are reporting, UnitedHealth is focused on having its doctors document as many conditions as possible that will increase the company’s Medicare payments.

    UnitedHealth does nothing to ensure its doctors document additional conditions for their patients in traditional Medicare. That’s not surprising.  Because of the way Medicare pays insurers in Medicare Advantage, adding diagnoses codes to traditional Medicare patient records would hurt UnitedHealth financially.

    The Wall Street Journal found that patients leaving traditional Medicare for Medicare Advantage in the three years ending 2022 had many more diagnoses in their medical records once they were in Medicare Advantage. Their “sickness scores” typically increased 55 percent. To put it succinctly, once in Medicare Advantage, from a sickness perspective, patients effectively had HIV and breast cancer.

    While UnitedHealth does more than other insurers to raise sickness scores for its Medicare Advantage patients, other insurers raised scores by 30 percent for new patients in Medicare Advantage. There is no evidence whatsoever that entering more diagnoses into Medicare Advantage enrollees’ medical records benefits patients in any way. In fact, UnitedHealth doctors do not use the company’s diagnoses software for patients outside of Medicare Advantage.

    By the Wall Street Journal’s calculations, United’s Medicare Advantage enrollees who saw UnitedHealth physicians had such high sickness scores that UnitedHealth benefited financially to the tune of $4.6 billion over three years.

    This insurer gaming of the Medicare payment system must end. Among other things, it is gouging taxpayers, depleting the Medicare Trust Fund, and driving up Medicare Part B premiums.

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  • Insurers focus on Medicare Advantage Special Needs Plans to maximize profits

    Insurers focus on Medicare Advantage Special Needs Plans to maximize profits

    Laura Beerman writes for HealthLeaders about how Medicare Advantage insurers are making out like bandits from offering care to people in Medicare Advantage “Special Needs Plans” or SNPs. Insurers like the Medicare Advantage program because they profit more from Medicare Advantage plans than from other insurance they offer. Providing Medicare coverage to people who have both Medicare and Medicaid in D-SNPs is even more lucrative than providing Medicare coverage to people who have only Medicare.

    Medicare Advantage Special Needs Plans are intended to cover people with Medicare and Medicaid, people with chronic or disabling conditions, including people with diabetes, HIV/AIDS, and dementia, as well as people living in a nursing home or requiring nursing care at home. But, it is not clear that most of the SNPs actually provide people with good Medicare benefits from high quality providers. People eligible for SNPs should seriously consider traditional Medicare, which makes it easy to get care from the providers you want to see anywhere in the US. People with Medicare and Medicaid generally have no out-of-pocket costs in traditional Medicare.

    Insurers are getting an increasing number of SNP enrollees. The number of SNP enrollees has doubled in the last five years. Insurers are also offering more SNP plans. Insurers make twice the profits from SNPs covering people with Medicare and Medicaid than they do from people without Medicaid in Medicare Advantage plans.

    It’s not clear whether people in SNPs understand what they are giving up when they opt for a SNP instead of traditional Medicare. People with Medicare and Medicaid in SNPs tend to be especially vulnerable, in poor health and living on small incomes, struggling to make ends meet. They also often struggle to keep their Medicaid eligibility.

    The Biden administration made it a little harder for the Medicare Advantage insurers to run away with as many taxpayer dollars as they’d like. As a result of some reforms that rein in Medicare Advantage payments a little, the Medicare Advantage market is changing somewhat. Insurers want big profits. So, some insurers have ended some Medicare Advantage plans that are less profitable.

    More than half of people in D-SNPs (people with Medicare and Medicaid) are in either a UnitedHealth Medicare Advantage plan or a Humana Medicare Advantage plan.

    Here’s more from Just Care:

  • Doctors and hospitals face increasing claims denials

    Doctors and hospitals face increasing claims denials

    The big health insurers are destroying our health care system, while profiting wildly. They cannot rein in costs, so Americans with insurance often cannot afford their care. Moreover, the insurers don’t appropriately reimburse physicians and hospitals for the services they deliver. Jeff Lagasse reports for Healthcare Finance on a new report revealing the increasing rate of claims denials health care providers are facing.

    In his review of The State of Claims 2024 report by Experian, Lagasse points out that providers do not have the technology to contest insurers’ claim denials efficiently. The report also focuses heavily on provider concerns about insurer preauthorization rules and policy changes that prevent them from getting paid appropriately.

    Our government allows corporate health insurers to hold all the cards. They decide what health care services to pay for and when, second-guessing treating physicians on what services are medically necessary. And, they are rarely accountable for failing to cover services they are supposed to cover or for delaying payment. Rather, they are accountable to Wall Street to increase profits, which creates a powerful incentive for them to deny and delay care and provider reimbursements.

    Policy changes, claims denials and payment delays are three ways insurers are increasingly profiting at the expense of providers:

    • 77 of providers say that insurer policy changes are occurring more frequently.
    • 73 percent say that insurers are denying claims more frequently.
    • 67 percent say that insurers are delaying payment more often.

    Nearly four in ten providers (38 percent) say that insurers are denying claims ten percent of the time or more. More than a third of the time, insurers refuse to authorize care. The rest of the time, insurers claim that data is missing from provider claims.

    The rate of Medicare Advantage denials is increasing with each passing year. The Kaiser Family Foundation recently reported that in 2022, Medicare Advantage insurers denied 7.4 percent of prior authorization requests, up from 5.8 percent in 2021 and 5.6 percent in 2020. It’s no wonder that this year alone more than 24 health systems have cancelled their Medicare Advantage contracts.

    Lagasse cites a 2017 report revealing that health care organizations several years ago lost $262 billion on claim denials out of $3 trillion in claims submitted, in a single year. After appealing, at a cost of $8.3 billion, the providers recouped 63 percent of that money. Insanity.

    Maybe AI can deliver greater efficiencies for health care providers and increase their revenues, as some suggest. But, you have to imagine that the insurers will always be at least one step ahead.

    Here’s more from Just Care:

  • If Congress doesn’t rein in insurers, they will have Medicare over a barrel

    If Congress doesn’t rein in insurers, they will have Medicare over a barrel

    Jakob Emerson reports for Becker’s about big changes coming to Medicare Advantage in 2025. Emerson suggests that for-profit corporate health insurers offering Medicare Advantage plans are struggling, even though the big insurers can circumvent regulations with near impunity and are making huge profits hand over fist. In fact, the big insurers are making huge profits and leveraging their enormous power and influence in Congress to deliver even bigger profits; if Congress doesn’t stop these insurers from corrupting Medicare, older adults and people with disabilities are likely to see their health care costs rise significantly.

    The big health insurers are spending millions of dollars lobbying Congress and misleading people about Medicare Advantage, which costs taxpayers 22 percent more per enrollee than Traditional Medicare and too often prevents people from getting the critical health care they need and that they get in Traditional Medicare.

    The health insurers will do anything they can to maximize profits, even if it means abandoning whole communities. Emerson reports some insurers are giving up enrollees in low-profit margin communities, leaving these people in the lurch. Moreover, some big hospital systems are dropping their Medicare Advantage contracts because the insurers are not paying them appropriately and denying their patients the care they need.

    If you can enroll in Traditional Medicare, you will avoid facing huge hurdles to get the care you need. But, you will need supplemental coverage. To reduce your costs for Medicare supplemental insurance–if you can even get it–buy coverage with fewer bells and whistles.

    If you can’t afford supplemental coverage or can’t find an insurer to sell it to you, call your Senator and Congressperson to complain. Everyone should have a choice of Traditional Medicare, not just rich healthy people. Demand that Congress add an out-of-pocket limit to Traditional Medicare since the government cannot protect you in Medicare Advantage.

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  • Public Citizen urges the Biden administration to keep profiteers out of health care, protect patients from corporate greed

    Public Citizen urges the Biden administration to keep profiteers out of health care, protect patients from corporate greed

    In a response to a request for information from the Department of Health and Human Services, the Department of Justice (DOJ) and the Federal Trade Commission (FTC), Public Citizen and several dozen other groups urge the Biden administration to keep profiteering out of health care, stop health care consolidation, and protect patients from corporate greed. Private equity, health insurers and pharmaceutical companies need to be reined in. They call for a universal health care system in the US.

    Eagan Kemp, health care policy advocate at Public Citizen, explains that private equity is taking over the US health care system, driving up patient costs and undermining quality of care. Profits come first, second and third. The Biden administration should eliminate the profiteering and ensure our health care system meets patient needs.

    Today, our profiteering health care marketplace has driven up costs and left millions of patients without care or paying exorbitant prices for their care, even with insurance. As a result, we spend an average of $13,500 a year  per person, often twice as much as every other wealthy country, on health care. No other developed country has so many companies extracting profits from its health care system.

    Insurers operating Medicare Advantage plans can compromise patient care in order to maximize profits. They are paid a fixed amount per enrollee upfront. So, they market to the healthy and create obstacles to care—e.g., delay and deny needed care—which lead people with costly conditions to disenroll.

    Public Citizen argues that the government needs to standardize coverage in Medicare Advantage so that insurers cannot inappropriately deny needed care. The administration should improve network adequacy requirements. The administration needs to better oversee the Medicare Advantage plans and recoup overpayments. It should not give plans a star rating if they are violating their contractual obligations. And, it should penalize bad actors in meaningful ways.

    Here’s more from Just Care:

  • Five concerning policy outcomes of Medicare Advantage program

    Five concerning policy outcomes of Medicare Advantage program

    We frequently think about aspects of Medicare and MA in isolation from their effects on our healthcare system. But when we step back, we see the following Medicare Advantage policy outcomes that we would never choose to accomplish on a stand-alone basis.

    1. Medicare Advantage program incentivizes insurer competition around attracting healthy people and avoiding people with costly conditions—with networks that avoid top specialists and specialty hospitals, with coverage protocols that delay and deny care inappropriately—increasing costs for providers and patients in the system and maximizing profits for insurers.
    2. Medicare Advantage program is effectively unaccountable, operating largely on trust, with no real-time oversight or meaningful enforcement, which prevents people from knowing which MA plans will provide high value care if they have cancer or heart disease and which to avoid, forcing them to gamble when they choose an MA plan and leading more than 10,000 people to die needlessly each year when they choose the wrong MA plan.
    3. Medicare Advantage program misleads people, particularly those with low incomes, into believing that they will get the same benefits as people in traditional Medicare with an out-of-pocket cap, when insurers can game Medicare coverage requirements so as not to deliver the same benefits. In fact, mounting evidence indicates insurers too often inappropriately deny critical care and provider payments, threatening the health and financial security of the most vulnerable enrollees with complex conditions.
    4. Medicare Advantage program uses a payment system that insurers can game to achieve 23 percent more per enrollee than the government spends on enrollees in traditional Medicare, driving up Medicare spending and Medicare premiums by $260 billion in the 10 years ending in 2033, and threatening the Medicare program. And, while MA offers a valuable out-of-pocket cap to people with low incomes and “extra” benefits, unlike TM, when they get sick, they are often faced with financial and administrative barriers to care wealthier people in TM do not face, which aggravate health inequities.
    5. Medicare Advantage program is financially unsustainable over the middle to long term and, left to its own devices, likely will lead to the withering away of traditional Medicare, the end of Medicare negotiated rates as providers acquire more leverage over insurers, greater financial and administrative barriers to care and much higher costs for enrollees with costly conditions.

    Here’s what MA policy should be designed to do:

    • MA policy should incentivize MA plans to compete to deliver high value care to the people with complex and costly conditions.
    • MA policy should bar bad actors from participating in the program; at the very least, it should identify the bad actors so that people can avoid enrolling in them.
    • MA policy should ensure that MA enrollees get the same benefits as people in Traditional Medicare and that providers are paid appropriately for the care they deliver.
    • MA policy should ensure that insurer administrative costs and profits total no more than 15 percent more than insurers spend on care.
    • MA policy should not allow the MA program to cost any more per enrollee than Traditional Medicare.

    Here’s more from Just Care:

  • Corporate health insurers generate sizeable profits covering people with Medicare and Medicaid. Why?

    Corporate health insurers generate sizeable profits covering people with Medicare and Medicaid. Why?

    Corporate health insurers are generating sizeable profits covering care for people with Medicare and Medicaid, sometimes called “dual-eligibles,” reports Caitlin Owens for Axios. The question is why these for-profit insurers are able to earn billions in profits from the dual-eligible population who generally need a lot of health care? Are the insurers withholding needed care inappropriately in order to pocket the money they don’t spend and maximize profits?

    What’s noteworthy is that the largest corporate health insurers have moved big time into the Medicare and Medicaid health care markets. They clearly see big dollar signs in the Medicare and Medicaid markets. In fact, their profits for people with Medicare are projected to be two-thirds more than their profits for working people.

    Of the 65 million Americans with Medicare about 13 million have both Medicare and Medicaid. Nearly four million of them are enrolled in corporate health plans that are supposed to cater to their special needs, called Medicare Advantage Special Needs Plans. All told, around seven million of them are enrolled in either a special needs Medicare Advantage plan or simply a Medicare Advantage plan that covers a broader array of people.

    More than 11 million dual-eligible individuals have incomes under $20,000 a year. More than five million of them have long-term disabilities and are under 65. More than three milion of them have at least five chronic conditions.

    McKinsey recently issued a report estimating that corporate insurers will see their profits grow treating dual-eligibles, increasing more than 70 percent to $12 million over the five year period ending in 2027. Why? The government pays more to treat dual-eligibles because they have costlier health care needs. But, insurers are clearly not spending proportionally more on this population.

    Profit margins are particularly high for insurers covering dual-eligibles, according to MedPAC, and that’s especially true if the insurers attract dual-eligible enrollees who don’t receive a lot of care.

    Here’s more from Just Care:

  • With Medicare Advantage, less for you is always more for insurers

    With Medicare Advantage, less for you is always more for insurers

    David Wainer reports for the Wall Street Journal that people in Medicare Advantage plans–coverage through corporate health insurers–are likely to see fewer extra benefits next year. That’s no surprise, nor will it be a surprise for Wall Street when everyone enrolled in Medicare Advantage faces much higher out-of-pocket costs than they do today and no longer have government-administered traditional Medicare as an option. If the administration and Congress do not swiftly rein in tens of billions in annual overpayments to insurers offering Medicare Advantage, the only question is when people will appreciate that Medicare Advantage is a helluva disadvantage.

    About 32 million people are  now enrolled in a Medicare Advantage plan, just under half the Medicare population. People are swayed by the ads offering “dental” benefits and free gym memberships and the seemingly trustworthy insurance agents steering them towards Medicare Advantage. Older adults and people with disabilities also can’t afford or don’t want to spend money on supplemental coverage in traditional Medicare that picks up most out-of-pocket costs, when they would like to believe they won’t be needing much health care. Since at any given time the vast majority of people don’t need a lot of health care, it has yet to sink in for them that insurers could take advantage of them if they are in a Medicare Advantage plan.

    Wainer says that insurers now need to address greater health care spending and lower government payments to appease Wall Street and deliver handsome shareholder returns. What’s concerning is that the bad actor Medicare Advantage plans–and we don’t know how many or which ones those are, but they appear to be numerous–are still raking in billions of dollars in profits from Medicare Advantage that they seem not prepared to spend on their enrollees’ medically necessary care. What kind of a health care coverage model is that?

    Wainer says that “if the current trends continue, plans will have to be more cautious in their offerings going forward.” Really? Truth is that people need to be more cautious about enrolling in a Medicare Advantage plan going forward. Medicare Advantage plan offerings in some, if not most, cases are concerning for people who need care–including restricted access to high quality doctors and hospitals, administrative hurdles and delays getting urgent care, inappropriate denials of care and high out-of-pocket costs.

    Even with tens of billions in annual overpayments, Medicare Advantage plans delay and deny care inappropriately. And, many restrict access to high quality providers. Some have such high mortality rates that one group of academics found that the government could save tens of thousands of lives a year if it ended contracts with those Medicare Advantage plans.

    If all goes well, people will start to see that Medicare Advantage is no free lunch when they most need care. In fact, it can easily cost people twice as much as what they’d spend on care in Traditional Medicare with supplemental coverage, with huge delays and obstacles to getting care.

    Wainer is correct that threats from insurers about cutting extra benefits in Medicare Advantage are designed to pressure the Biden administration to continue to overpay them. The administration is currently deciding Medicare Advantage rates for 2025. Beware: If CMS steers away from its current course of reining in Medicare Advantage overpayments, you will pay ever higher Medicare premiums and, before long, face signficantly higher Medicare costs.

    Here’s more from Just Care:

  • How big insurers please Wall Street’s investors

    How big insurers please Wall Street’s investors

    The big for-profit insurers made more than $40 billion in profits during the first six months of this year but Wall Street doesn’t consider that nearly enough. Investors have been shifting money away from those companies, which, I can assure you, has set off alarm bells in the C-Suite.

    Because top executives’ compensation is tied to meeting specific financial metrics, including shareholders’ return on investment, the CEOs are especially motivated to right the ship and reduce the percentage of revenues their companies pay out in claims to provider groups and facilities the companies don’t own. You can be certain they’ll be pulling all the levers they can think of.

    I would be surprised if some of them haven’t already called in McKinsey & Co. or another big consulting firm to look under the hood. (When I worked in the industry, the chief financial officer of one of my employers had McKinsey on a $50,000-a-month retainer.) But with the stock price falling at all of the companies while the Dow and other Wall Street indices are humming along, the consultants will be called in for a special assignment beyond any retainer. They’ll do a deep dive into the companies’ operating and staff divisions and develop recommendations to “streamline” operations, cut expenses and reallocate resources.

    Here are some things to expect in the coming weeks and months at these companies:

    Increased hardball with hospital systems: As I’ve reported, Elevance/Anthem, which owns several for-profit Blue Cross plans around the country, is in a protracted dispute with Bon Secours Mercy Health, a hospital system in Ohio and Virginia, over Medicaid and Medicare Advantage reimbursements. Earlier this month, BSMH sued Elevance/Anthem for $93 million in unpaid and disputed claims. The suit claims that Elevance/Anthem’s audits are a “bad faith attempt to bludgeon BSMH Virginia into submission in the contract negotiations, as opposed to a good faith exercise of Anthem’s discretion.”

    The dispute between the two parties has attracted considerable media attention, but there are many others across the country. Modern Healthcare reports that so far this year, 49 provider-payer contracting disputes have become public, compared to only 20 through August 2022. 

    Modern Healthcare is also reporting that many rural hospitals, which typically operate on thin margins, are considering withdrawing from Medicare Advantage networks operated by big insurers because their payments are increasingly inadequate.

    Take it or leave it pay cuts to doctors: Just as the pandemic was reaching the United States in early 2020, UnitedHealth Group sent letters to numerous physician groups demanding pay cuts of up to 60%. If the doctors — many of whom were on the front lines trying to keep Covid patients alive — refused, they’d be kicked out of UnitedHealth’s provider network. UnitedHealth rescinded or postponed some of those planned cuts temporarily, but physicians should expect to see those demands again from big insurers.

    Layoffs: I know from personal experience that when McKinsey shows up, layoffs are almost always inevitable. Job security for many employees goes out the window. I had to lay off members of my own staff over the years because of the “restructurings” and downsizing McKinsey recommended.

    Sure enough, late last month, CVS/Aetna told regulators in eight states that it would eliminate about 5,000 position — even as the company made additional acquisitions, including paying $8 billion for Signify Health, a nationwide network of 10,000 clinicians, and $10 billion for Oak Street Health, a primary care company.

    Divestitures: Speaking of CVS/Aetna, I’ve seen reports that investors are questioning the company’s “transformation” efforts, especially in light of the fact that the company’s shares have been down more than 25% since the first of the year. When Wall Street financial analysts signal dissatisfaction with the performance of a company’s operating divisions, the CEO and other executives will assess which operations have become a drain on earnings or are not working synergistically with other and more profitable divisions.

    Big insurers are like chameleons, constantly recasting themselves based on Wall Street’s whims. When I joined Cigna in 1993, the company was a large multi-line insurer with a property and casualty division, an individual insurance business, a reinsurance division and a financial services company. Aetna had similar lines of business back then. Both companies shed those operations at the behest of investors and analysts to focus exclusively on health care.

    Exiting some Obamacare markets: When the Affordable Care Act marketplaces became active in 2014, most insurers rushed in, and many, the big ones in particular, quickly rushed out. They couldn’t make enough money fast enough to satisfy Wall Street. Since then, the government has increased subsidies (at least temporarily) to help people afford their premiums and out-of-pocket obligations, and many insurers, smelling higher profits, have returned. However, this marketplace can be volatile. Cigna announced last month it is exiting some of the Obamacare markets it had recently entered.

    Redoubled efforts to enroll more seniors into Medicare Advantage: Insurers have learned that the federal government is a much more generous customer than the nation’s employers, who once were the primary source of insurers’ revenues and profits. When looking at 2021 data, Kaiser Family Foundation researchers found that “Medicare Advantage insurers reported gross margins averaging $1,730 per enrollee, at least double the margins reported by insurers in the individual/non-group market ($745), the fully insured group/employer market ($689), and the Medicaid managed care market ($768).

    Purging customers: The Affordable Care Act makes it illegal for insurers to refuse to sell coverage to people with pre-existing conditions or to charge them more based on their health, but it doesn’t stop them from making premiums unaffordable. Insurers learned long ago that a way to drive away unprofitable individual and small-business customers is to jack up the rates so high those customers will leave. This is known as purging in the health-insurance business. Cigna and other insurers are planning double-digit premium increases for many of those customers in 2024 to boost profits. Cigna’s chief financial officer told investors last month that, “We are likely to have fewer customers in the individual exchange business in 2024 relative to where we are in 2023.” Getting rid of some of those people, he said, should increase the company’s profit margin.

    Aggressive use of prior authorization: Federal investigators found in July that some of the big insurers make much more aggressive use of prior authorization in Medicare Advantage and Medicaid than in their commercial health plans, meaning they are refusing to cover the cost of care for many seniors and low-income Americans to boost profits. Doctors have complained for years that insurers are increasingly refusing to pay for care their patients need, regardless of plan type. In the face of congressional scrutiny, Cigna, UnitedHealth and some other companies recently announced they will reduce the number of treatments requiring advanced approval, but don’t be surprised if that applies to a small percentage of patients — and primarily patients receiving care from doctors they employ or who work in clinics and other facilities the insurers own.

    Benefit buydowns: An age-old trick insurers have used for decades to improve profit margins is to reduce the value of their health benefit plans while they also increase premiums. Behind closed doors, this is called “benefit buydown.” It manifests in many ways, including making health-plan enrollees pay more out of their own pockets before the coverage kicks in, removing doctors and hospitals from their provider networks, increasing prior-authorization requirements, and refusing to pay claims after medical care has been provided. Cigna reportedly used a software program to reject more than 300,000 requests for payment over two months in 2022. Lawyers in California have filed a class-action lawsuit against the company, claiming it uses an algorithm to deny claims en masse and without human review.

    Increase in inter-company eliminations: The ACA requires insurers to pay 80-85% of revenues on patient care. If they spend less than that, they have to send rebate checks to their customers. But the big companies that have moved swiftly into health care delivery have found they can circumvent that requirement — and congressional intent — by paying themselves. The ACA requirement doesn’t apply to health care providers, so UnitedHealth, Cigna and CVS/Aetna in particular are steering their health-plan enrollees to care delivery entities they own. UnitedHealth, which employs more than 70,000 doctors, is clearly the pack leader. During the first half of this year, UnitedHealth categorized $66 billion as “eliminations.” That amounted to 25% of total revenues.

    Bottom line: Expect to pay more for your health insurance AND your health care next year — if you can get it at all — to make Wall Street financial analysts and investors (including those in the C-Suite) a little happier and richer.

    This article was originally published on Substack, HEALTH CARE un-covered.

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