HJAR Nov/Dec 2023

PRESSURE POINTS largest part of their business model. For example, most have a pharmacy benefit management (PBM) company, the business practices of which would require another whole article to untangle. These insurance companies maximized their profits throughout the pandemic as premiums increased and patients did not seek healthcare at pre-pandemic levels — levels that we are only now beginning to see again. Profits have continued into the first quar- ter of 2023 with UnitedHealthcare’s insur- ance arm showing a net income increase of 14% to $4.3 billion, which was caused by higher Medicare Advantage and exchange membership and lower medical expenses. Increasing revenue and decreasing pay- ments leave a very profitable middle ground. Where is all this headed? As more Medicare enrollees choose Medicare Advantage plans, we will see profits continue to rise for insurers. A KFF report on 2021 gross margins per insurance enrollee showed that insurers had a gross margin of $1,738 for Medicare Advantage enrollees while the individual market had $745, the group market $689, and Medic- aid Managed Care $768. It’s easy to see why health plans are recruiting so heavily in the Medicare Advantage market. We now have 50% of Medicare-eligible people choosing MedicareAdvantage plans, which will con- tinue to grow, thus maximizing these profits for insurers. With the advent of automation of insur- ance reviews, we will see the denials increase USAble Mutual Insurance Company, d/b/a Arkansas Blue Cross and Blue Shield’s Net Income Up 23% from 2021 to 2022 According to filings to the Arkansas Insurance Department, Arkansas Blue Cross and Blue Shield reported a total net premium earned of $2,519,996,462 and $2,813,770,608 for years of 2021 and 2022 respectively, and total underwriting deductions (or expenses) of $2,476,314,153 and $2,762,896,211 for years of 2021 and 2022 respectively. As a result, it reported $47,794,311 as underwriting profit for year 2021 and $45,751,477 for year 2022. When asked by HJAR if those numbers include all of Blue Cross Blue Shield of Arkansas profits, Leo Y. Liu, Chief Financial Analyst at Arkansas Insurance Department said, “No. The total profit and loss can be found on the “Statement of Revenue and Expenses” (See provided) …. The company had net income of $51,963,228 in 2021 and $63,766,315 in 2022 after the effects of other items such as investment income, capital gains/losses and income tax.” Arkansas Blue Cross and Blue Shield’s spokesperson did not return calls for comment. because, instead of reserving claims review for the most expensive cases, insurers can review the most routine procedures while denying hundreds of claims in seconds. Patients will either see delays in care — or go without — because of prior authoriza- tions and claims denials. The entire health- care claims process can be overwhelming to a patient who needs treatment but is denied care, either initially or after the fact. Studies have shown that, unless the price tag of care is large, patients will simply not pursue an appeal through the entire tedious process. As more information is available to healthcare systems and providers on pay- ments, prior authorizations, and claim deni- als, we will see more and more negotiations between insurers and healthcare providers become public as contracts are not renewed, leaving policyholders out-of-network. The outlook is grim as these pressure points are only growing more intense between patients, healthcare providers, and insurers. n Source: Arkansas Insurance Department. “Health Annual Statement for the Year Ended December 31, 2022 of the Condition and Affairs of the USAble Mutual Insurance Com- pany.” Page 4. https://insurance.arkansas.gov/site/assets/files/2656/usable_mutual_ins_ co_key_4th_qtr_2022.pdf