Latest / Becker’s Healthcare Podcast / Medicare Advantage Shifts and AI's Growing Role in Health Insurance with Jakob Emerson

Transcript

Medicare Advantage Shifts and AI's Growing Role in Health Insurance with Jakob Emerson · Becker’s Healthcare Podcast

• 0:01
  - The payer provider relationship has never been simple,
• 0:04
  - but what's happening now is something different.
• 0:07
  - Value based models are maturing unevenly,
• 0:10
  - prior authorization reform is reshaping workflows on both
• 0:13
  - sides, and affordability
• 0:15
  - pressure is intensifying.
• 0:16
  - The organizations that figure out how to collaborate
• 0:19
  - genuinely, not just contractually,
• 0:21
  - are the ones that will set the terms
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  - for what comes next.
• 0:24
  - Becker's fifth annual fall payer issues roundtable brings
• 0:27
  - together more than 500 executive level attendees
• 0:30
  - and 70 plus speakers for two days of
• 0:32
  - focused senior level conversation on benefit design, network
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  - strategy, transparency,
• 0:38
  - and the financial
• 0:46
  - Hotel Chicago. For the agenda and event details,
• 0:49
  - visit beckerspayer.com
• 0:50
  - and click on the events tab in the
• 0:52
  - upper right.
• 0:54
  - This is Scott Becker with the Becker's health
• 0:57
  - care podcast.
• 0:58
  - Thrilled today to visit with Jacob Emerson. Jacob
• 1:01
  - talks to us regularly about what's going on
• 1:03
  - in the payer world, the payer environment.
• 1:06
  - It is, as always, a fascinating time in
• 1:08
  - the payer world. Jacob, I'll turn it to
• 1:10
  - you. Tell us a couple things that you're
• 1:12
  - watching and what you're seeing today.
• 1:15
  - Yeah. Good to talk with you, Scott. And
• 1:17
  - and to your point there, in terms of
• 1:19
  - always being a fascinating world, it's October 1,
• 1:22
  - and that is the day that all the
• 1:24
  - insurers around the country that offer Medicare Advantage
• 1:27
  - Plans can legally,
• 1:28
  - publicly talk about their portfolios
• 1:31
  - for next year. And even though we did
• 1:33
  - get all of the data earlier this week,
• 1:36
  - basically, now the the full landscape is out.
• 1:38
  - We know what is and isn't changing going
• 1:41
  - into next year,
• 1:42
  - the millions of people that are gonna have
• 1:44
  - to be switching plans,
• 1:46
  - and just generally a a a good overview
• 1:48
  - of what's happening to this to this massive
• 1:51
  - market and, and a lot of companies that
• 1:54
  - are gonna be leaving it, actually.
• 1:55
  - So that's one story that we've been... Well,
• 1:57
  - we've been keeping up with all week.
• 1:59
  - And then the other that we could touch
• 2:01
  - on is,
• 2:02
  - how the latest use case for insurers and
• 2:04
  - and how they're using AI.
• 2:07
  - Obviously, nothing new for the insurers, but now
• 2:09
  - they're using agentic AI to specifically help their
• 2:12
  - members book appointments, call the doctors,
• 2:15
  - all that stuff that's pretty annoying, I think,
• 2:17
  - to to most people. So now the AI
• 2:19
  - will do it for you if you're a
• 2:21
  - member of some of the largest insurers. So
• 2:22
  - we can dig into that as well.
• 2:24
  - Thank you. And talk about the... Some of
• 2:27
  - the insurers exiting MA plans. I saw an
• 2:29
  - article. I think you posted today or yesterday
• 2:32
  - about seven more plans exiting the market.
• 2:36
  - We also see some health systems cutting back
• 2:38
  - in contracts with with
• 2:41
  - MA plans.
• 2:42
  - What is what is going on here? Because
• 2:44
  - I know at the very same time,
• 2:46
  - the government and doctor Oz are very much
• 2:48
  - in favor of MA and these types of
• 2:51
  - approaches. So what's happening in the world that's
• 2:54
  - causing this sort of
• 2:56
  - dichotomy.
• 2:57
  - Yeah. And it's multifaceted and and, you know,
• 2:59
  - as always, it goes back to... It depends
• 3:01
  - on every company you're talking about, every insurer,
• 3:03
  - their size, structure. You know, are they big
• 3:05
  - guys that can,
• 3:07
  - wade through this this difficult period, or are
• 3:09
  - they little
• 3:10
  - and independent and basically, you
• 3:12
  - know, unable to and and then exiting markets?
• 3:15
  - And I will also preface by saying, Scott,
• 3:17
  - that there's two different stories here in terms
• 3:19
  - of what I've been tracking over the last
• 3:20
  - few years, which is, of course, the large
• 3:22
  - health systems, the providers themselves,
• 3:25
  - pouring down and and dropping certain M and
• 3:28
  - A contracts.
• 3:29
  - So not accepting,
• 3:31
  - certain members usually from from large insurers.
• 3:34
  - And that's one side of things.
• 3:36
  - But the other story to hear that for
• 3:38
  - for today is that a lot of health
• 3:40
  - systems,
• 3:41
  - you know, they own their own insurance company.
• 3:43
  - And so,
• 3:44
  - you
• 3:45
  - know, it's a... It's the Kaiser model, essentially,
• 3:47
  - but
• 3:48
  - definitely on a on a smaller scale for
• 3:50
  - for most. And so that list you cited
• 3:53
  - of the seven, actually, it's eight. I updated
• 3:55
  - it this morning. There's eight plans that are
• 3:57
  - in part or or,
• 4:00
  - or or owned entirely by hospital systems. They're
• 4:02
  - gonna be exiting the market, the Medicare Advantage
• 4:05
  - market,
• 4:06
  - next year, and there's 12 insurers overall,
• 4:09
  - that are gonna be exiting.
• 4:10
  - And and
• 4:12
  - I think it points to two things. One,
• 4:14
  - the health system, you know, the insurance model
• 4:16
  - of of that combined model, it's just for
• 4:19
  - for those that have not been doing it
• 4:20
  - from the beginning, like a Kaiser,
• 4:22
  - you know, and I think a lot of
• 4:23
  - them bolted on or built these plans in
• 4:25
  - the late nineties, early two thousands as a
• 4:28
  - way to diversify revenue. And, you know, I've
• 4:30
  - heard a lot of analysts say, like, that's
• 4:32
  - that's not their their core strength, and now
• 4:35
  - it is showing,
• 4:37
  - especially when times get tough. And so, you
• 4:39
  - know, they're pouring... They're they're trying to figure
• 4:41
  - out where to,
• 4:43
  - cut costs. And I think for a lot
• 4:45
  - of them, clearly, the health plan is where
• 4:47
  - to start.
• 4:48
  - And it also... For a lot of them,
• 4:49
  - these are really, really small enrollee
• 4:51
  - populations. I mean, some of these only have
• 4:53
  - ten, fifteen thousand people as part of their
• 4:56
  - membership.
• 4:56
  - Some are a lot larger than that in
• 4:58
  - in the hundreds of thousands. But but, like,
• 5:00
  - Providence, for example. But overall,
• 5:03
  - you know, it just it just points to
• 5:05
  - health systems are really, really struggling in this
• 5:07
  - business, and it seems like only the the
• 5:09
  - big guys, the high quality ones, Kaiser, UPMC,
• 5:13
  - Intermountain with SelectHealth, and then there's a few
• 5:15
  - others.
• 5:16
  - Those seem to be the only ones that
• 5:17
  - are really able to, get through this really
• 5:20
  - difficult period for for the entire insurance industry.
• 5:23
  - A 100%. It's... Your point is so well
• 5:25
  - taken. It's so many of these... The news
• 5:26
  - of so many of the exits is relatively
• 5:28
  - small plans, small populations.
• 5:30
  - What's going on with some of the bigger
• 5:31
  - insurers in Medicare Advantage?
• 5:34
  - What are you seeing there, and are we
• 5:35
  - still sort of on hold to hear what
• 5:37
  - they say tomorrow?
• 5:39
  - No. I mean, today, it's October 1. It...
• 5:40
  - The the... Everything's out. Embargos have lifted. Everything
• 5:43
  - was public really early this morning.
• 5:46
  - And I I think it's essentially a parallel
• 5:48
  - to what happened last year. It's it's gonna
• 5:50
  - be... We we still need some data from
• 5:52
  - CMS. We'll get it within the next few
• 5:54
  - weeks in terms of how many people on
• 5:56
  - the ground are affected. Right now, it's just
• 5:58
  - projections. But from from what I've seen from
• 6:00
  - from early projections from trustworthy sources, it's it's
• 6:02
  - looking like another year where,
• 6:05
  - a lot of disruption
• 6:06
  - across the country.
• 6:08
  - Last year, it was about one in 10
• 6:10
  - people had to... Basically, we're in plans that,
• 6:13
  - going into this year no longer existed. So
• 6:15
  - they had to switch plans,
• 6:17
  - and that was,
• 6:18
  - I think it was close to 3,000,000 people
• 6:20
  - across the country. And and projections I'm seeing
• 6:22
  - is around there, maybe even a little bit
• 6:24
  - higher in terms of people that are in
• 6:26
  - Medicare Advantage Plans right now that will not
• 6:28
  - exist,
• 6:30
  - come 2027.
• 6:31
  - And that is because in... The big the
• 6:33
  - big guys... But really everybody. But the big
• 6:35
  - guys, they're they're cutting plans. They're they're moving
• 6:37
  - away from PPOs. They're going more towards HMOs
• 6:40
  - because they can control the cost. They're better.
• 6:42
  - They're reducing
• 6:43
  - benefits, especially some of those those side benefits
• 6:46
  - in the past, like gym memberships,
• 6:49
  - you know, meal cards, things like that. Nothing
• 6:51
  - like dental, vision, hearing. That's all staying, you
• 6:53
  - know, the core extra of Medicare Advantage compared
• 6:56
  - to traditional Medicare, but they're scaling back. They've
• 6:59
  - cut broker commissions,
• 7:00
  - and all... There's been,
• 7:02
  - I think about five dozen or so plans
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  - that have also capped enrollments,
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  - which is a new thing this year.
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  - Basically, they don't they don't want, over a
• 7:11
  - certain amount of members because they don't think
• 7:13
  - they can handle it. They don't think they
• 7:14
  - can control the costs. And so that's another
• 7:17
  - new layer that we're watching heading into next
• 7:20
  - year's plans literally
• 7:21
  - turning members away, capping capping how many they'll
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  - take in. And so last thing I'll say
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  - in terms of everything is changing or or
• 7:28
  - the the trend that's continuing is the insurers
• 7:30
  - are really continuing to build in the special
• 7:33
  - needs plan business.
• 7:35
  - It's a lot more profitable for them,
• 7:37
  - and that's the side of Medicare Advantage where
• 7:40
  - somebody might be dually eligible for both Medicare
• 7:42
  - and Medicaid, so really, really low income senior
• 7:46
  - or,
• 7:46
  - special plans called, like, c snips, which is
• 7:49
  - chronic special needs plans, and that's taken care
• 7:51
  - of really, really sick or institutionalized
• 7:54
  - individuals.
• 7:56
  - So you contract with, like, nursing homes, for
• 7:58
  - example, or with states to take care of,
• 8:01
  - special needs overall, really sick or really, low
• 8:03
  - income individuals. And so those plans continue to
• 8:07
  - to grow all over the country.
• 8:10
  - But but the but the PPO of of
• 8:12
  - the past is definitely
• 8:14
  - disappearing,
• 8:15
  - and it seems like just the upheaval that
• 8:17
  - we saw last year,
• 8:18
  - we're gonna see it all over again going
• 8:20
  - into this year.
• 8:22
  - Thank you so much. And and and talk
• 8:24
  - a little bit about what what else are
• 8:25
  - you watching currently in the insurance and payer
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  - area, Jacob? What else is top of mind?
• 8:29
  - Yeah. Yeah. For sure. So
• 8:31
  - interesting,
• 8:33
  - little trends that I actually... I haven't published
• 8:36
  - coverage on just yet, but I'm I'm aiming
• 8:38
  - to this week. And it's,
• 8:41
  - based off of... You know, I I I
• 8:42
  - I talked with you this summer about how
• 8:44
  - I went up to UnitedHealth's headquarters, and they
• 8:46
  - had showed the media everything they're doing right
• 8:49
  - now with tech and Optum and, basically, growing
• 8:52
  - Optum into a a technology company.
• 8:55
  - Not that it already isn't, but definitely building
• 8:57
  - that out even more. And an interesting part
• 8:59
  - about UnitedHealthcare,
• 9:01
  - the the insurance arm, is they've they've launched
• 9:03
  - a a thing called Avery, which they described
• 9:06
  - directly as their answer to Siri. And it's
• 9:08
  - a generative AI assistant that's in their app,
• 9:11
  - and it's on their website. And, basically, they're
• 9:13
  - they're... They've been rolling it out this year.
• 9:15
  - I... They I think they continue to. And
• 9:17
  - I believe at the time, they they said
• 9:18
  - they wanted to reach 20,000,000 people with it
• 9:20
  - across,
• 9:21
  - employer Medicare and Medicaid
• 9:23
  - membership by the end of this year. And,
• 9:25
  - basically, that that AI bot, it will call
• 9:27
  - the doctor for you. It will book the
• 9:29
  - appointment for you.
• 9:30
  - It'll give the reason for the visit. It'll
• 9:32
  - give the referral status.
• 9:34
  - All the stuff that, you know, you and
• 9:36
  - I hate to do is sit on that
• 9:37
  - phone, call, go through the automated
• 9:39
  - numbers, talk to another AI bot. The AI
• 9:41
  - bot is gonna do all that for you
• 9:43
  - now from from UnitedHealthcare.
• 9:45
  - And it's not for every member,
• 9:47
  - just yet. So, you know, they've got over
• 9:49
  - 50,000,000. And like I said, it's it's only
• 9:51
  - out to 20,000,000 by the end of this
• 9:52
  - year. But I think it's also interesting that
• 9:54
  - that's what Aetna is, has been hinting at
• 9:56
  - these last couple of months as well. And,
• 10:00
  - Aetna's president was at a was at a
• 10:02
  - health care conference earlier this month and basically
• 10:05
  - said that they are doing the same thing.
• 10:07
  - But I think they're a little bit behind.
• 10:09
  - It sounds like it's it's, it's just been
• 10:12
  - newly launched within the last few months. It
• 10:14
  - hasn't really scaled yet, and,
• 10:16
  - CBS didn't... Wouldn't tell us how many members,
• 10:20
  - have access to it or how many they
• 10:21
  - want to have access to it. But we
• 10:23
  - do know that Aetna is working on or
• 10:25
  - or has the same thing of using AI
• 10:27
  - to basically navigate
• 10:29
  - the administrative system, the health care system for
• 10:32
  - the members. And
• 10:34
  - I have not heard of any other insurers
• 10:36
  - doing this yet, and I think that I
• 10:38
  - think that says two things in terms of
• 10:40
  - one, you know, these are the big guys.
• 10:42
  - They're they're the most technologically sophisticated. They're the
• 10:44
  - only ones that can invest in this kind
• 10:47
  - of technology.
• 10:48
  - And and that's more bad news for the
• 10:50
  - small guys kind of playing into the trend
• 10:52
  - we were just talking about with MA, but
• 10:53
  - but more broadly for the health insurance industry,
• 10:56
  - these smaller, these regional plans,
• 10:58
  - independent plans that aren't these big conglomerates,
• 11:01
  - they can't compete with that.
• 11:03
  - And, you know, I think if this works,
• 11:06
  - if it is so much more convenient to
• 11:08
  - have AI do all of your health care
• 11:10
  - navigating for you, you know, that's just another
• 11:13
  - another competitive
• 11:14
  - advantage that the the big guys are gonna
• 11:16
  - have. And I would argue is, you know,
• 11:18
  - a classic example of
• 11:20
  - how how they're gonna pull more customers, more
• 11:22
  - members toward them, and and the the small
• 11:25
  - guys are gonna keep losing.
• 11:27
  - A 100%. A 100%. No. Fascinating to see
• 11:30
  - and fascinating to see how this takes off
• 11:32
  - this navigation effort. These have their efforts become
• 11:34
  - stickier and closer
• 11:36
  - with their consumers, with their with their beneficiaries.
• 11:39
  - We'll see how it goes. Right? I mean,
• 11:40
  - to to see if that works.
• 11:42
  - Yeah. And it seems like, I mean, that's
• 11:43
  - what the wider tech industry has been doing
• 11:46
  - outside of health care. I mean, I I
• 11:47
  - believe Meta has a new a new app
• 11:49
  - that does essentially the same thing, where you
• 11:52
  - log on and you ask it to call
• 11:53
  - for you, make appointments for you, stand in
• 11:55
  - line for you virtually, do administrative things for
• 11:57
  - you. And and, you know, it seems like
• 11:59
  - UHC and CVS Aetna, they're they're the insurance
• 12:02
  - industry's first first ones to break into that
• 12:05
  - in in... On our side of things. So
• 12:08
  - really interesting to watch. And then I also
• 12:09
  - just wanted to quickly mention Scott and going
• 12:11
  - back to the Medicare Advantage landscape in fairness
• 12:14
  - and what CMS has said, because I know
• 12:16
  - I mentioned that it's it's a clearly big
• 12:18
  - upheaval, big pullback.
• 12:20
  - Overall,
• 12:21
  - nationally,
• 12:22
  - the number of plans available nationally is actually
• 12:25
  - about the same as it was last year,
• 12:26
  - and the vast majority of seniors in every
• 12:29
  - county around the country will have access to
• 12:31
  - a Medicare Advantage Plan next year. So the
• 12:34
  - national landscape, it almost looks like nothing or
• 12:37
  - very little has changed. It's when you dig
• 12:39
  - into the county level and the state level
• 12:41
  - and the plan type, data that you realize
• 12:44
  - everything has changed all over again. And I
• 12:46
  - think that's a really interesting paradox that, the
• 12:49
  - national level doesn't really tell you what's going
• 12:52
  - on at, you know, at the county level
• 12:54
  - where in, Medicare Advantage is is sold and
• 12:56
  - and regulated.
• 12:58
  - Thank you very, very much. No. Fastened to
• 13:00
  - see what's going on and how this evolves,
• 13:01
  - and we'll see over the next year what
• 13:04
  - happens with Medicare Advantage, what happens with the
• 13:05
  - big payers, and and and what happens with
• 13:07
  - the Triple Aim in total. It just seems
• 13:09
  - so many different challenges that are solvable but
• 13:11
  - not being solved, but we'll see how it
• 13:13
  - goes. Yeah.
• 13:14
  - Jacob, it's always fantastic to visit with you.
• 13:17
  - The brightest person I visit within the payer
• 13:18
  - industry,
• 13:19
  - in the payer area. Thank you so much
• 13:21
  - for joining us today on the Becker's Healthcare
• 13:23
  - podcast. Just fantastic as always. Thank you, Scott.
• 13:25
  - Appreciate it.