Health Insurers Outline Medicare Expansion Plans

Major health plans continue to develop and implement growth strategies that focus on health and wellness solutions to address improvements in quality and costs. Insurers are redefining themselves to take full advantage of a market that is shifting from single products to more integrated and comprehensive solutions.

During first quarter of 2012, C-suite executives at the major public health plans outlined during  earnings calls the steps they are taking and the progress they are making on strategies to expand their Medicare and dual-eligible footprint, as well as programs to expand physician engagement and accountable care organizations.

Here are some of the highlights:

Aetna
Aetna is pricing new and renewal business for a higher level of utilization in 2012. It expects to add about 300,000 new members and end the year with 18.2 million members. The projected growth will be across its Medicaid, Medicare, and commercial business lines.

The insurer continues to look for opportunities to expand its Medicaid footprint. Aetna was one of three plans selected to administer Medicaid services statewide in Missouri beginning July 1. Although Aetna has offered Medicaid plans in parts of the state for 14 years, this will be its first statewide offering.  The contract is projected to add 50,000 members in 2012.

Aetna also has a new Medicaid risk contract in Ohio, which is expected to boost Aetna’s chances to participate in Ohio's dual eligible demonstration pilot program.

Its accountable care solutions business has nine contracts in place and 16 letters of intent.

In March, Aetna realigned its Medicare, Medicaid, public and labor, and federal benefit planned businesses into a single operating unit, Government Services. Aetna officials say the change will help the insurer better serve its government customers, advance its retiree solutions and position it for the dual-eligible market.

Although Aetna continues to look at acquisition targets, officials say they haven't seen anything in a price point that makes sense for Aetna.

CIGNA
CIGNA now provides real-time pricing for more than 200 common medical procedures, which represent 80% of its medical claims.

Its collaborative accountable care program (CAC) is a physician engagement program that provides physicians with actionable patient information to close gaps in care, financial incentives, and assistance from care coordinators to help patients follow prescribed treatments and improve their overall health by participating in coaching and lifestyle programs. Humana has 22 of these initiatives in place in 13 states. It plans to have 100 in place by 2014.

CIGNA acquired HealthSpring, a Medicare plan, in 2011 and is leveraging its larger business footprint to expand HealthSpring's senior offerings into new markets.

CIGNA is also preparing for an increase in utilization in 2012, although the first quarter increase was "muted" according to company officials. The insurer continues to see targeted increases in what it calls "good utilization," including some prevention, wellness, and diagnostic procedures as well as higher medication compliance around evidenced-based care for members in chronic programs.

Humana
Humana projects that it will add 330,000 to 340,000 new Medicare Advantage members this year. It has targeted these growth opportunities:

• Medicare age-ins as baby boomers retire
• Group Medicare business
• Longer-term Medicare/Medicaid dual-eligibles

It has formed an alliance with CareSource, a Dayton, Ohio-based Medicaid health plan, to serve dual-eligibles in several states. CareSource operates primarily in Ohio and Michigan, but through this alliance is expected to expand its geographic footprint.

UnitedHealth Group
The utilization trend that began in 2011 continues with the first quarter showing a "modest" increase across Medicare, Medicaid, and its commercial lines of business. Outpatient and inpatient each posted increased utilization with inpatient "very restrained." Hospital bed days were flat to down in each business line.

The pending acquisition of two South Florida health plans will help boost Medicaid and Medicare Advantage membership. Miami-based Preferred Care Partners and Coral Gables-based Medica HealthCare Plans will add about 12,000 Medicaid members and 85,000 Medicare Advantage members. The acquisition also includes eight primary care centers.

WellPoint
WellPoint says its CareMore strategy is taking shape. While the June 2011 acquisition added about 54,000 new Medicare Advantage members to WellPoint’s rolls, the real focus was CareMore’s healthcare clinics in Arizona, California, and Nevada. The clinics, which are staffed with physicians and other healthcare professionals, specialize in delivering care coordination and intensive treatment to the chronically ill.

The clinics are critical to WellPoint’s participation in Los Angeles County's dual-eligible demonstration project. The insurer will subcontract with L.A. Care beginning in 2013 and the CareMore delivery model will mean that WellPoint will be more able to manage the cost of specialized care for this fragile population.

WellPoint operates 29 CareMore facilities, which it now calls neighborhood care centers, and plans to open at least 12 more in 2012. Seven of the centers will be located in expansion states, which will be new to the CareMore model, but familiar WellPoint markets. WellPoint officials declined to identify the expansion states.

WellPoint has introduced several hospital contracting initiatives, such as value-based contracting, which it credits (at least in part) with lower increases in unit cost trends in 2012. The insurer will begin introducing to select markets in third-quarter 2012 value-based contracting to its primary care physician network. The goal is to expand value-based contracting across its entire primary care network by the end of 2014.