Tracking Insurance Policy Shifts and Payer Strategy with Jakob Emerson

In this episode, Jakob Emerson of Becker’s Healthcare discusses state and federal moves impacting insurance rates, IVF coverage, GLP-1 drugs, and how payers like Cigna are adapting to evolving healthcare demands.

Episode Transcript

(00:00):
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This is Scott Becker with the Becker's Healthcare
Podcast.

(00:42):
Thrilled today to be joined by Jacob Emerson.
Jacob is brilliant and talks to us regularly
about payer issues and what's going on in
the world of payers. Jacob always seems like
a busy time in the payer universe. What
why don't you give us a sense? What
are a couple of the key stories that
you're following currently?
Absolutely. Yeah. It's great to talk with you,
Scott.
So I I thought we could talk today

(01:02):
a little bit. Actually, less about what some
of the private insurers and the and the
big nationals are doing
and what we're seeing, both at the federal
and the state levels in terms of,
new policies
or what some of the politicians are saying
at the local level,
about the big insurers and some of the
the moves they've been making recently.

(01:23):
And then some some coverage decisions and policies
that have been made at the federal level
over the last few weeks,
or lack thereof that's, really,
causing some interesting
waves across the industry. So the first,
I thought we could start with is,
some things coming out of Arkansas with with
the governor there, Sarah Huckabee Sanders,
the republican governor, calling on the state's insurance

(01:45):
commissioner to reject some major rate increases
proposed by Centene and and the Blue Cross
Blue Shield plan there, for the ACA, which
is, you know, something we've been talking about
a bit in terms of what we've been
seeing all over the country.
We're seeing massive rate proposals across all the
states, a 54%
rate increase from Centene in Arkansas alone. And

(02:05):
so we're seeing the governor now come out
and and explicitly call these, rate increases or
proposals insane
and, basically calling on her state agencies to
reject them. Again, from Centene and Blue Cross.
And and what I think is interesting, Scott,
is, you know,
obviously, right now, congress is republican controlled, and
a big piece of why we're seeing these
rate increases proposals all over the country is

(02:28):
because of the expected
discontinuation
of the enhanced ACA premium tax credits.
So that's one reason why payers are, raising
rates for next year and Republicans at the
federal level
could help reduce that. There's other reasons. You
know, there's the possibility of pharmaceutical tariffs. There's
the fact that medical costs are up overall
all over the country. So there's the the

(02:49):
market morbidity
of the ACA has gotten a lot worse.
But I just think it's interesting that, you
know, at the local level or the state
level, you know, Republican governors coming out against
the insurance companies for for proposing the higher
rates next year. But at the federal level,
it's Republican leaders that are, you know, holding
up a possible extension to help alleviate some
of those rates.

(03:10):
Yes. No. I think that's a fascinating perspective,
but it but it is fascinating to see
some of the potential rate hikes being bandied
about. Even outside of the ACA, people are
talking about rate hikes of 20%
or more at a time when health insurance
seems like it's gotten impossibly expensive for so
many people. I I can't even believe the
rates that we're paying for health ex health
insurance.
And so regardless of even the ACA piece

(03:32):
of this, and I and I I I
take the point on
Republicans in Washington are trying to sort of
scale back to ACA,
and that's leading these big insurance companies to
try and push up rates for ACA subsidized,
patients or or members.
But even outside of that, medical loss ratios
have been going way up

(03:52):
Yep. In equation where
we
we are seeing just incredible rate hikes. And
at the end of the day, I'll note
that around this without fixed supply and demands
in our country
and taking other steps
and and just really a challenging situation.
Yeah. Certainly. And, you know, I should make
very clear that I think the the tax

(04:13):
credits are only a small percentage or a
a singular percentage of why,
some insurers are asking for these really high
rates for next year. It is because across
the board, across every market, medical costs are
just up so much or utilization is up
so much. But it's just it's interesting because
Arkansas really has been a state to watch
these last few years with some of the
interesting,

(04:33):
policy moves coming out from Huckabee Sanders specifically
and her taking on the pharmaceutical benefit manager
industry,
you know, and and passing that law to
ban,
companies like CVS and Cigna if they own
a PBM from owning pharmacies in that state.
Now that's that's been blocked by a federal
judge as of late. So so the PBM's
have won in the latest round there. But

(04:55):
just thought it was interesting that, you know,
Arkansas has really been making a lot of
big news in in the national insurance realm.
Yeah. No. It's it is really interesting, and
there's no easy answers, it doesn't seem like.
I mean, I you'd in some ways, they
give it
to Huckabee Sanders for fighting some of these
things at the same time. Just really challenging
situation. I mean, because you've got this real

(05:15):
bastardization
of
health care, non free market health care, and
and I don't know that I've got any
real answer, but I you know, this is
a supply and demand issue and the access
is more without a whack. So we'll see
how it goes. Certainly. It is discouraging, though.
It is. The other
piece I wanted to briefly mention, Scott, is,
you know, there's there's two
new news reports that came out of, Washington

(05:37):
this week over,
federal coverage policies,
and that's that back when,
president Trump was was running for a second
term, he had, pledged that he was going
to be requiring he was going to require
commercial insurance companies to provide coverage for in
vitro fertilization services,
to,
incentivize

(05:57):
people having children.
And according to the Washington Post,
this week, there is no plans within the
White House at this point to
move forward with that type of plan. So,
you know, that's something that we reported last
year that payers
might have had to,
move toward covering IVF services,

(06:18):
under a federal executive order or, we're not
we're not really sure how that would have
been, enforced or or taking place. But at
this point, you know, just for our audience,
that's that's not something that the White House
is is any longer pursuing.
And then the other,
thing I wanted to mention is that The
Post also reported
last week,
a really interesting,

(06:39):
proposal from CMS
that they want to allow,
state Medicaid programs and and Medicare Part d
plans to cover GLP ones for weight management
on a voluntary basis. And if you remember,
that was something that the Biden administration,
somewhat proposed, for for CMS to cover, anti
obesity medications under Medicare and Medicaid
last year, but but then, earlier this year,

(07:01):
CMS,
dropped the the implementation of that policy in
their final rulemaking.
And so so it's so we're we're seeing
CMS,
begin to roll the ball once again on
uncovering these medications that are, of course, so
expensive and really causing a lot of issues,
in the financial perspective across the health care
system. But on the flip side, from the
clinical perspective,

(07:21):
seem to just be miracle drugs from a
variety of in a variety of ways. So,
fascinating to see how the how the federal
government A 100%. And and yeah. No. I
think there's two different thoughts that I think
are worth discussing. First, on the IVF side,
right now, an IVF cycle for a patient
might cost $2,025,000
dollars a year or a cycle. Excuse me.
And there's no way the federal government can

(07:43):
end up covering that. Just not gonna work
economically. It's just it's it's just the back
unless you get those cost way down.
And those costs, other unlike the GLP one
cost,
include a lot of labor and people involved
in it. It's not just you're giving a
shot. There's lots of different pieces and parts
of that puzzle of IPF,
whereas GLP ones is literally just a shot
and doesn't require a lot of management and

(08:05):
a lot of medical management and no offense
to medical management people. But so it is
easier to end up having coverage of it
without it being so explosive in terms of
cost. Now what what what you're seeing on
the GLP ones, and I think this is
a trend you're gonna see. I mean, Novo
Nordisk is getting hammered on their earnings, and
they're the original developer of the Wegovy drag.
And and what they basically said is that

(08:26):
we're gonna move towards a cash pay world
in this, and and that's gonna lead to
the ultimately a much lower price on these
things because people are gonna pay for them
out of pocket versus through the payers and
so forth. And and similarly, if the if
the government ends up paying for it, which
would be some benefits to that, they'll be
really expensive. They're only gonna be able to
pay for that if they're able to get

(08:46):
pricing that's much more rational.
That makes sense. It doesn't kill the federal
budget even more than it's already being killed
under
both Republican and Democratic administrations.
Right. Right. No. It's it's interesting to see
what's gonna happen here, but until, you know,
we move into maybe more of a cash
pay,
area, for these medications.
On the flip side, you know, we're obviously

(09:08):
going through all the second quarter earnings calls
from all the major payers. And what I
think is fascinating is that Cigna really seems
to be the leader of the pack here
in terms of how they're how they're building
their position as a key player in this
high demand,
weight loss market. They're they're using both their
health plan arm, but also their pharmacy benefits
arm under under Evernorth and Express Scripts,

(09:31):
to really launch a lot of new models
on on how these drugs are accessed, how
they're paid for, and ultimately how they're controlled
through through lifestyle support and and prescribing methods,
requiring
certain,
lifestyle modification programs before,
either health plan pays for us or, maybe
how the how the PBM

(09:51):
negotiates with the manufacturers to then bring back
some of those savings
due to their, employer clients. So we got
a lot of details about, you know, all
these different benefit models that Cigna has been
launching over the last year or so,
and some of the success they're seeing with
employer clients,
which and now they're up up at about
50% of their their PBM clients are choosing

(10:13):
to cover the cost of GLP ones for
weight loss. So so really, I don't know,
see, stuff coming up from Cigna specifically on
on how they're navigating this this this issue.
Jacob, always a pleasure to visit with you.
I always learn so much. I hope our
audience does too. Thank you so much for
joining us today on the Becker's Healthcare Podcast.
Thank you very, very much. Thank you, Scott.