The health insurance industry as a whole may be rallying its forces to fight the proposed Medicare Advantage rate cuts next year, but one CEO doesn’t seem too worried.
President and CEO Bruce Broussard said during a TD Cowen conference in Boston on Tuesday that Humana would indeed benefit from lower prices, and has done so in the past. “For many years we have seen that there is pressure on rate announcements, we have done much better,” he said. “I feel that 2024 will be like that.”
Humana is the second-largest Medicare Advantage provider with 5.1 million members, accounting for 18 percent of the market, while the leading insurer, UnitedHealthcare, has 7.1 million policyholders and accounts for 29 percent of the market. part.
Last month, the Centers for Medicare and Medicaid Services released a proposal to cut Medicare Advantage rates by 2.3% by 2024, but adjusting for risk and other factors would result in different effects between insurance company. The insurance industry has described the draft policy as a cut, but CMS insists it will result in an average 1% increase in Medicare Advantage revenue for insurers. The agency plans to finalize Medicare Advantage pricing by April 3. In addition, CMS announced last month that it will recover $4.7 billion over 10 years from Medicare providers Advantage that the agency concludes is overpaid.
TD Cowen CEO of healthcare and senior equity research analyst Gary Taylor said at the conference, Humana will likely see a 1% drop in overall rates following the proposed rate announcement.
Broussard said the risk-adjusting and indirect medical education components of CMS’s proposal are of limited duration and won’t affect Medicare Advantage’s growth over time. Humana has high registrations, favorable quality ratings and positive relationships with insurance brokers, which will give the company an edge over its competitors no matter what the CMS cuts. interest rates or withdraw from his proposal, he said.
The health insurance trade association AHIP and UnitedHealth Group are less optimistic about the proposed discount and other recent policy announcements.
“We remain focused on consolidating and improving Medicare Advantage, and urge the administration to withdraw its payment model revisions,” AHIP CEO Matt Eyles said in a press release Tuesday. flawed for 2024. UnitedHealthcare also believes CMS should withdraw its rate notice, a spokesperson wrote in an email.
Broussard echoed claims from AHIP and others that vulnerable Medicare beneficiaries, including those who are also eligible for Medicaid, could have their benefits reduced if rates are cut. Likewise, insurers and providers entering into value-based payment arrangements and those operating in struggling markets could be harmed, he said.
Humana proposed making Medicare Advantage its core business last month when it announced it would stop selling commercial insurance policies, what Broussard described as a “distraction” to the business caused by government funded. The company considered selling its commercial operations to another insurer, he said, but chose to simply shut it down. “We decided that we really needed to get out of it due to our inability to compete in the market and also the opportunity cost it had on us as an organization,” he said.
