Latest / Becker’s Healthcare Podcast / Payer Pressures and Federal Scrutiny Shaping Health Insurance with Jakob Emerson

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Payer Pressures and Federal Scrutiny Shaping Health Insurance with Jakob Emerson · Becker’s Healthcare Podcast

• 0:02
  This is where health insurance leadership comes together.
• 0:05
  Becker's fourth annual spring payer issues roundtable brings
• 0:09
  together over 400 payer and health plan executives
• 0:12
  and more than 100 speakers to Chicago April.
• 0:16
  This year's event includes keynote conversations with the
• 0:19
  industry's top leaders and former president George w
• 0:23
  Bush. For the full agenda and event details,
• 0:25
  visit beckershospitalreview.com
• 0:28
  and
• 0:29
  click on the events tab in the upper
• 0:29
  right. We're looking forward to hosting you here
• 0:31
  in Chicago.
• 0:34
  This is Scott Becker with the Becker's Healthcare
• 0:37
  Podcast. We're thrilled today to be joined by
• 0:39
  leading
• 0:40
  journalist and brilliant person, Jacob Emerson.
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  Jacob joins us regularly to talk to us
• 0:46
  about the issues in the payer world, the
• 0:49
  payer universe, what's happening with payers,
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  whether United,
• 0:54
  Cigna,
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  Aetna,
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  Elavance, and a ton more and and across
• 0:59
  the ecosystem.
• 1:00
  Jacob, let me teed up. Ask you to
• 1:02
  take it away. What are a couple of
• 1:03
  stories that you're watching currently?
• 1:05
  Yeah. Hey, Scott. Good to talk with you.
• 1:07
  Two stories I thought we could talk about
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  today. One,
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  just announced today, this morning,
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  January 14 that UnitedHealthcare is launching an accelerated
• 1:16
  Medicare Advantage payment program for rural hospitals.
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  So basically speeding up, how quickly
• 1:22
  rural hospitals get paid, in four states by
• 1:25
  their Medicare Advantage business.
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  And then,
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  another story that's kind of a wider trend
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  is just the,
• 1:32
  federal scrutiny that insurers have been facing these
• 1:36
  last few months,
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  especially among the Republican Party, which I think
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  is, overall pretty new, in terms of if
• 1:42
  you think the grand context and historical context
• 1:45
  of health care that president Trump and the
• 1:47
  wider Republican,
• 1:48
  party seems to be really focused on scrutinizing
• 1:52
  health insurers right now and the pricing of
• 1:54
  health care overall.
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  So some really interesting developments there over the
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  last few weeks.
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  Thank you very, very much. And and talk
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  about this united issue with the rural hospitals
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  and accelerating payment and so forth. Yeah. So
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  UnitedHealthcare,
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  they they've launched a six month pilot program
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  that they say is aimed at cutting Medicare
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  Advantage payment processing times,
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  from about a month to less than two
• 2:16
  weeks
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  for
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  for participating hospitals in Oklahoma, Idaho, miss Minnesota,
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  and Missouri,
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  all to basically provide more immediate cash flow
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  relief
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  to rural hospitals facing financial pressures.
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  And, you know, I think this is interesting
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  on the face just because,
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  you know, it's UnitedHealthcare. It's the largest Medicare
• 2:36
  Advantage company. And we know from the hospital
• 2:39
  association in the past that rural hospitals especially
• 2:41
  do face
• 2:42
  a lot of,
• 2:43
  financial pressures from the Medicare Advantage program.
• 2:47
  But what I also think is interesting is
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  this all really falls into
• 2:50
  that that recent trend or the trend we've
• 2:52
  been following for a few years here at
• 2:54
  Becker's of,
• 2:55
  health systems all over the country dropping certain
• 2:57
  Medicare Advantage contracts.
• 2:59
  Often, either UnitedHealthcare
• 3:01
  or Humana, given that those are the largest
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  ones,
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  and citing slow payments,
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  reimbursement issues, prior authorization issues,
• 3:09
  claims processing issues.
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  So this seems to kind of fall right
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  in the middle of that, that rural hospitals
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  are often,
• 3:16
  saying that they're having a lot of issues
• 3:17
  with Medicare Advantage and then, of course, that
• 3:19
  trend overall of of slow payments from insurers
• 3:21
  of this program and UnitedHealthcare
• 3:23
  coming right down the middle and saying, okay.
• 3:25
  We're gonna try to speed up,
• 3:27
  payments to those rural facilities. So I guess
• 3:29
  we'll see how it goes. You know, this
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  is just a press release from UnitedHealthcare, and
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  it is a program that just launched today.
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  We have not heard of you know, we
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  don't know what facilities are participating in this,
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  and and we don't know how it's going
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  to go. But I do think it's, it
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  seems to be an acknowledgment that there is
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  a, there's a there's a slow payment issue,
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  among MA,
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  at least, in these states and in these
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  rural facilities.
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  Fantastic and fascinating. We'll see how this goes.
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  It it always seems like a little bit
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  of a,
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  stop to try and help, but not necessarily
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  that it will help enough. But we'll see
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  if it actually has any real impact.
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  And talk about the Republicans and the health
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  insurers and and what you're seeing there. Yeah.
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  Definitely. This is the one I wanted to
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  dive into a little bit deeper with you,
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  Scott, because I think there's just there's so
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  much
• 4:15
  going on, so much being said, and there's
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  so much historical context, I think.
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  But in terms of the actual, you know,
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  hard recent news, president Trump said back in
• 4:25
  early January that he plans to meet with
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  14 insurance companies,
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  to pressure them to lower prices for Americans.
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  And he was he was speaking to the
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  Republican,
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  the House GOP Caucus
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  about this,
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  and and he he called the insurance companies
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  big fat cats. It's a direct quote.
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  And, of course, you know, the wider context
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  of this is, the the the shutdown last
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  year over the enhanced ACA subsidies that expired
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  at the end of last year,
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  which has been a real quagmire in Congress
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  given that no Democratic or Republican
• 4:58
  proposal,
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  on how to either,
• 5:00
  extend those or come up with a solution
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  around those has really materialized,
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  over these last few months. And so there's
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  that issue. And then more concretely because, you
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  know,
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  the there's no insurance companies have said there's
• 5:14
  any meeting on the books there with the
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  president. He he's said that there was a
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  call that he's going to make to these
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  companies, and he said 14 insurers. I don't
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  know which insurers those are. There are only
• 5:24
  about six or seven actual large ones,
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  in the country. So unclear if that meeting's
• 5:30
  even going to happen.
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  But what is more concrete is that,
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  house republic and certain committee leaders have asked
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  the CEOs of some of the the largest
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  health insurers to testify before congress
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  at the January
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  as as the scrutiny intensifies over rising health
• 5:45
  care costs and and industry profits
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  overall. And so at the end of the
• 5:49
  month on the twenty second, the CEOs of
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  UnitedHealth, CVS, Ellevance, Cigna, and then Ascendiant, which
• 5:55
  is a new,
• 5:57
  parent holding company
• 5:58
  of Blue Shield of California, and they've also
• 6:00
  launched a few other health services businesses. So
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  it's kinda like the UnitedHealth Optum setup.
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  They're gonna be appearing before a few house
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  committees,
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  giving their their testimonies
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  to lawmakers.
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  And I I I do I do have
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  a few thoughts on this, Scott, but I'll
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  I'll turn it back to you really quickly
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  in case you wanted to just react overall
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  on seeing the president,
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  say he wants to talk with insurers directly,
• 6:22
  lawmakers,
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  summoning them to Washington. I think it's really
• 6:26
  interesting that Republicans are have really turned their
• 6:28
  eye directly to the insurance companies that I
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  think in the past,
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  they were pretty friendly too.
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  But but it really is fascinating because you've
• 6:37
  got this incredible challenge in that
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  we've got government subsidies
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  that flow through the health care insurers.
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  Ultimately,
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  this has led to in some ways, it's
• 6:50
  a it's a two sided problem.
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  We need those subsidies
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  for
• 6:56
  people to get insurance, particularly
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  poor people, Medicaid people, people that don't make
• 7:01
  a good income. We we need those subsidies.
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  At the same time, I think it's increasingly
• 7:05
  recognized
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  that this massive flow of subsidies through insurance
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  companies,
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  whether through Medicare managed care or Medicaid managed
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  care ends up
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  driving up inflation
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  versus not in health care cost, then it
• 7:18
  flows through the the whole health care ecosystem.
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  And so
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  in some ways, it seems like the insurance
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  companies
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  are getting
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  taken to task for something that's really a
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  holy trinity
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  between the
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  government,
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  state governments, and the insurance companies
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  versus something that's really just the doing of
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  the insurance companies. So it seems like there's
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  multiple parties that have led to the problem
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  that we have. And at the same time,
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  it's hard to get rid of subsidies because
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  there are a lot of people that don't
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  don't make a great income that absolutely need
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  those subsidies. So I I don't know how
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  you how you deal with this.
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  Yeah. I I mean, just reacting to a
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  few things you said, Scott. One, I I
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  don't think that,
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  lawmakers
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  are going to be directing
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  their ire at the right at the right
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  pieces of what's really going on here. Because
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  if you look at what,
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  why are these subsidies why do they exist
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  in the first place? It's because these plans
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  are so expensive, and it's because, you know,
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  these plans ultimately have to cover claims that
• 8:17
  are very expensive.
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  And so, you know, you look at who
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  are some of the largest payers collectively in
• 8:23
  this country besides CMS? It's employers. It's self
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  insured employers. That's ultimately the client for these
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  insurance companies
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  commercially.
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  And
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  and insurers have to negotiate lower pricing or
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  at least try to keep pricing down as
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  much as possible for these employers. In theory,
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  that's how it's supposed to work. I know
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  there's a big asterisk to all that. But
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  when you look at what self insured employers
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  you know, there's been surveys of them, thousands
• 8:46
  of them all over the country,
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  by employee benefits groups like Mercer, Aon,
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  WTW.
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  They're facing some of the steepest rises in
• 8:55
  in in cost for health benefits this year
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  for their employees.
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  Some putting average increases nationally at 10% for
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  for 2026 alone. But what they're attributing to
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  these rising costs, it's not just
• 9:07
  insurers raising premiums willy nilly. It's because they
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  have to cover,
• 9:11
  really expensive chronic and high cost conditions like
• 9:14
  cancer therapies, gene therapies. There's a lot more
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  of stop loss claims right now where you
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  have a very small percentage of employees actually
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  driving most of the cost with, like, million
• 9:25
  dollar claims.
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  There's greater care utilization
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  overall right now across the country. And then
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  there's pharmacy spending is so expensive, especially when
• 9:34
  you talk about GLP ones,
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  which we know are are absolutely driving up
• 9:38
  the costs for everybody across,
• 9:40
  across insurance markets. So so when you talk
• 9:43
  to employers, that's what's actually driving up the
• 9:45
  cost. It's not just,
• 9:46
  insurers, you know, sitting around
• 9:49
  deciding to do it, of their own volition.
• 9:51
  And and I think that's kind of a
• 9:53
  bigger point I would wanna make, Scott, is
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  that insurers on their own don't really control
• 9:57
  pricing. And, again, I know there's a lot
• 9:59
  of different stakeholders listening to this podcast, so
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  I say that sentence with with a huge
• 10:03
  asterisk.
• 10:04
  But I think this conversation, it depends on
• 10:06
  the insurance company you're talking about because there
• 10:08
  are a lot of nonprofit insurers out there,
• 10:10
  especially in the Blues ecosystem.
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  And, of course, you know, the largest insurers
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  these days are part of massive conglomerates,
• 10:17
  which is a trend that we know from
• 10:18
  research does drive up costs overall.
• 10:21
  But but the the profits themselves,
• 10:23
  they don't make the majority of their money
• 10:25
  from from commercial health insurance. They're it's coming
• 10:28
  from the subsidiaries like Optum and the provider
• 10:31
  arm or Evernorth and Express Scripts at Cigna
• 10:33
  with with drug pricing,
• 10:36
  deals or,
• 10:37
  the pharmacy side of CVS Aetna through the
• 10:40
  PBM and through the actual, you know, retail
• 10:42
  stores. And then I think the other things,
• 10:44
  Scott, that that probably won't get brought up
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  at these meetings
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  is that, you know, the federal government and
• 10:49
  the states, they fund these companies directly through,
• 10:52
  like, what you mentioned, through Medicaid managed care
• 10:54
  contracts, through Medicare Advantage contracts that now make
• 10:56
  up more than half of the Medicare system.
• 10:58
  And then these these,
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  insurance companies, they they're the ones who have
• 11:03
  the products to offer on the ACA marketplaces.
• 11:06
  And so,
• 11:07
  and on top of that, these companies also
• 11:09
  administer health and pharmacy coverage for for millions
• 11:11
  of federal, state, and local employee employees
• 11:14
  all over the country. So I think, you
• 11:16
  know, this is an easy scapegoat. It's easy
• 11:18
  political points, but I can almost say with
• 11:20
  certainty that no lawmakers are gonna go after
• 11:22
  the fact and expose the fact that our
• 11:24
  entire health care system is really a public
• 11:26
  private hybrid system where almost all the health
• 11:29
  care benefits, with the exception of perhaps traditional
• 11:32
  Medicare, they're managed by these private insurance companies.
• 11:35
  American health care and big big insurance is
• 11:38
  one in the same, and I don't think
• 11:39
  you're really gonna see accountability
• 11:41
  about that discussed in these kind of hearings.
• 11:44
  No. It's fascinating. You make so many, so
• 11:46
  many good points, and it is fascinating. I
• 11:48
  mean, what's fascinating too about the help GLP
• 11:50
  one thing and so forth is, you know,
• 11:52
  it's if,
• 11:53
  you know, you get them through the insurance
• 11:55
  companies, it's 501,000 a month. And you get
• 11:57
  them through your insurance plan. You you get
• 11:59
  them from the hims and hers of the
• 12:00
  world, the Rose Sparks of the world, the
• 12:02
  other places of the world, it's $200 a
• 12:03
  month. I mean, it's insane how much arbitrage
• 12:05
  is going on. And the whole pharmaceutical pricing
• 12:08
  system
• 12:09
  increasingly
• 12:10
  makes no sense to a lot of us.
• 12:12
  And I know that we've got Mark Cuban
• 12:14
  coming to speak at our chief pharmacy office
• 12:16
  summit in April,
• 12:18
  but there's so much to that just makes
• 12:20
  no sense. I mean, in in how cost
• 12:21
  get flowed through the insurance companies, but if
• 12:23
  you're buying them
• 12:25
  directly, they're so much cheaper, and the whole
• 12:26
  thing seems insane to me. Yeah. I I
• 12:28
  would agree. And I that's what I would
• 12:30
  wanna see at these hearings. I I I
• 12:31
  don't think lawmakers should really necessarily focus on
• 12:34
  the actual, you know, UnitedHealthcare
• 12:35
  parts of UnitedHealth Group. I wanna know, you
• 12:38
  know, are the lawmakers gonna ask them about,
• 12:41
  how Change Healthcare data is being used in
• 12:43
  terms of how United can
• 12:46
  now owns the largest,
• 12:47
  data processing company in in the country and
• 12:50
  can and has the data of a lot
• 12:51
  of other health plans and providers from around
• 12:54
  the country, or how the company operates in
• 12:56
  terms of Optum or UnitedHealthcare
• 12:58
  paying Optum and vice versa and how these
• 13:00
  intercompany
• 13:01
  eliminations work,
• 13:03
  and some tricky finance stuff that goes on
• 13:05
  from from an antitrust perspective. I'm not alleging
• 13:07
  anything, but I just I think that, you
• 13:09
  know, how these companies have been vertically integrated,
• 13:12
  from what you just talked about, the PBM
• 13:13
  and the pharmacy part of all of this,
• 13:15
  Scott, I don't know if that's all gonna
• 13:17
  be brought up in these hearings. I don't
• 13:18
  know if lawmakers and and, of the wider
• 13:20
  public, I don't think they really understand,
• 13:22
  how sprawling these companies are anymore and and
• 13:25
  where they have their arms in different parts
• 13:27
  of the system.
• 13:29
  I don't think there's a a broad understanding
• 13:31
  of that. It's certainly not even a
• 13:34
  real problem. Question as to what what it
• 13:35
  what it really
• 13:37
  what it really means and why.
• 13:39
  I mean, when when
• 13:40
  you try and simplify health care and try
• 13:43
  and understand what's really going on,
• 13:45
  whether that's the real
• 13:47
  issue or not is is really you united
• 13:50
  owning so many different companies. That's a real
• 13:51
  issue. Or so much money flowing through the
• 13:53
  insurance companies, the issues, and and how do
• 13:55
  we sort of deal with some of the
• 13:57
  pricing issues on the other side of this?
• 13:58
  It seems like we've got so many people
• 14:00
  together on this.
• 14:02
  You know, it it and this is what
• 14:04
  what makes me crazy is if you buy
• 14:05
  something directly,
• 14:07
  there's a concept in business of using other
• 14:09
  people's money. And whenever using other people's money,
• 14:13
  cost tend to escalate because you're not watching
• 14:15
  the cost yourself.
• 14:17
  If you go and buy drugs through the
• 14:18
  insurance company, you don't really worry worry what
• 14:20
  the cost is unless you have a big
• 14:21
  co payment on it. Yep. If you could
• 14:23
  buy them directly from Hims and Hers or
• 14:25
  Roast Sparks on these other places, you care
• 14:27
  very much about what they cost, and you're
• 14:29
  very price conscious.
• 14:30
  And we've developed this entire system around using
• 14:33
  other people's money in flow throughs, and it's
• 14:35
  just a a disaster.
• 14:36
  It's just a disaster and it's escalated cost
• 14:39
  in in crazily. And you're absolutely right. I
• 14:41
  don't think,
• 14:42
  I don't think what your
• 14:44
  your point is well taken. It's not united
• 14:46
  in a vacuum.
• 14:48
  It's it's to go back to some of
• 14:49
  the old movies, the whole system is messed
• 14:51
  up. It's not it's not it's not it's
• 14:53
  here united. It's not united healthcare. It's not
• 14:54
  the problem. They're one of many pieces of
• 14:57
  puzzle that's led the whole system built on
• 14:59
  other people's money.
• 15:00
  It's just like the educational complex, and I
• 15:03
  don't mean to rant, has become so expensive
• 15:06
  because people are borrowing so much money to
• 15:08
  go to school. They don't think it's real
• 15:10
  money until they have to pay it back.
• 15:11
  You you've got you're paying for education with
• 15:13
  other bills money. Plus, I talked to a
• 15:16
  press surgeon who came out of school with
• 15:17
  500,000
• 15:19
  in debt after his after school and med
• 15:21
  school, which is just insane,
• 15:23
  but wouldn't be the case if there wasn't
• 15:25
  all that debt there to flow through it
• 15:27
  and pay for it without the bills money
• 15:29
  to start with, but just the debacle. But
• 15:30
  I I know I'm going off, but it
• 15:32
  really is. But when you say that they're
• 15:34
  because you you're exactly right. They're gonna interview
• 15:37
  or ask them to testify,
• 15:38
  and they're gonna be talking about
• 15:41
  a symptom of a much larger issue, which
• 15:44
  you've got entire systems running other people's money
• 15:46
  versus the real versus what they'll be talking
• 15:48
  about there
• 15:49
  at the testimonies. So so what did you
• 15:51
  unite how do you not raise rates? Well,
• 15:52
  we raised we rose rates because
• 15:55
  we've got so many claims coming that are
• 15:56
  costing so much money, and we we can't
• 15:57
  make it work without that. Yeah. I think
• 16:00
  last thing I would say, Scott, just if
• 16:02
  we're focused on United specifically and if lawmakers
• 16:05
  believe,
• 16:06
  that they're the ones raising costs and that's
• 16:07
  such an oversimplification
• 16:09
  of of this issue,
• 16:10
  then the federal government needs to look in
• 16:12
  the mirror, and lawmakers need to look in
• 16:14
  the mirror and look at who has been
• 16:16
  giving UnitedHealth
• 16:17
  medic all the medic you know, a majority
• 16:19
  of the Medicare Advantage contracts and the holding
• 16:21
  the Medicaid contracts around the country and employers
• 16:24
  that choose United to be their health insurer,
• 16:26
  and Optum who is is allowed to purchase
• 16:29
  so many providers of all different kinds of
• 16:31
  and companies in general around the country. I'm
• 16:34
  not saying that I'm not again, I'm not
• 16:35
  alleging anything, negative toward United right now, but
• 16:38
  I just think that that is probably not
• 16:40
  gonna happen is a federal government, you know,
• 16:43
  looking in the mirror and realizing it created
• 16:45
  and oversees the system that has allowed these
• 16:47
  companies to become what they are. And and
• 16:50
  it and, unfortunately,
• 16:51
  it's almost impossible to change because you've got
• 16:53
  health care as reliant on massive government
• 16:56
  funding,
• 16:57
  and and it's it it's just not changing
• 16:59
  anytime soon. When they talk about changing it
• 17:02
  at the edges, they do so. But to
• 17:04
  make real change would cause
• 17:07
  real harm
• 17:08
  temporarily or long term.
• 17:10
  And so,
• 17:11
  essentially, we gotta keep on working with the
• 17:14
  system we have, at least for the foreseeable
• 17:16
  future is my sense. Yeah. Because you're absolutely
• 17:18
  right. The government can't really start taking away
• 17:21
  subsidies and money from it without huge political
• 17:24
  outcry. Exactly. Exactly. So, I mean, to our
• 17:27
  to our to everybody listening, and then January
• 17:29
  22 and and twenty third in the morning
• 17:31
  newsletters,
• 17:32
  we will have coverage up of of the
• 17:34
  fireworks we're expecting,
• 17:36
  in in that hearings.
• 17:38
  Jacob, as always, a pleasure to visit with
• 17:40
  you. Thank you so much for joining us
• 17:42
  on the Becker's Healthcare podcast. Jacob is about
• 17:44
  the brightest person in the country covering this
• 17:46
  stuff. We really appreciate it. Thank you very
• 17:47
  much. Thank you very much, Scott.