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Payers have had a wild year, to say the least—so wild, it’s hard to choose just one issue that defined the year. But we made them do it anyway!
So much, in fact, that it ranged from dealing with the fallout of Medicaid redeterminations to addressing rising healthcare costs to receiving lower-than-expected Medicare Advantage (MA) star ratings from the Centers for Medicaid and Medicare Services (CMS).
Some of the nation’s leading insurance executives, industry experts, and consultants shared their 2024 highlights below.
These answers have been lightly edited for length and clarity.
Luke Hansen, chief medical officer, Arcadia
[This year] may be remembered as the high-water mark for Medicare Advantage exuberance. While the program continues to expand, the financial and regulatory pressures that emerged this year set the stage for a recalibration of plan strategies in the years ahead, including member acquisition and retention. For example, we witnessed many high-profile contract disputes over reimbursement rates this year that resulted in some healthcare provider organizations choosing not to accept certain plans.
Medicaid redeterminations also profoundly impacted this line of business in 2024, creating ripple effects that will likely carry over to the Affordable Care Act exchange markets. For example, millions of people in the US lost Medicaid coverage when the pandemic-era public health emergency ended. Some of those individuals will transition to marketplace plans, which will drive up demand. At the same time, federal funding linked to historic larger Medicaid enrollment is drying up, as has pandemic-era supplemental spending, all of which will strain state budgets.
Sanjay Subramanian, SVP and head of the healthcare payer business unit, Cognizant
Medicare Advantage, up until this year, was viewed as a gold rush within the government plan side of things, and every plan wanted to go ahead and get into the government line of business, especially MA, which was viewed as being the most profitable. So it’s kind of ironic that in the space of a year, it’s gone from being the most profitable line of business to becoming one of the most challenging lines of business.
[When] CMS started to go ahead and change some of the ratings systems, I think that hit quite a few plans pretty hard on profitability. I think the other piece that’s also caused some of this is the increased utilization.
Glenn Pomerantz, EVP and chief medical officer, Point32Health
There have been several trends worth noting this past year that have the potential to impact health payers for years to come and are contributing to both the overall medical costs for our membership, as well as the affordability of our products. These include pharmacy costs associated with the rapid rise in usage of GLP-1 medicines to fight cardiometabolic conditions, as well as new-to-market cell and gene therapies; increased costs related to cancer care; clinical labor shortages; and health system consolidation.