Insurers bet on set payment plans to offset uncertainty

Health insurers will rely heavily on Medicare Advantage and Medicaid managed-care to deal with the financial uncertainty caused by the COVID-19 pandemic.

A 15% decline in Medicare members doctor's visits in November and December will likely impact Humana's 2021 profits, since physicians didn't include risk codes that Humana usually sees for doctor appointments. That's making it hard for the insurer to price these visits appropriately, CEO Bruce Broussard said. Still, the insurer is counting on Medicare Advantage to prop up the balance sheet.

The Louisville, Ky.-based insurer expects to end its fiscal 2020 with up to 475,000 new Medicare Advantage members, with the boost thanks to high sales and member retention. In 2021, Humana aims to invest in these enrollees' services and grow its network of dedicated primarycare centers for the 200,000 members who frequent these sites.

At Centene Corp., Medicare Advantage represents the fastestgrowing part of the company's business. CEO Michael Neidorff is also bullish on Medicaid managedcare. Neidorff said several states are interested in accelerating the introduction of long-term care services for their Medicaid population, with the idea that cost savings will help offset the financial shortfalls caused by the pandemic. Neidorff expects to grow its Medicaid rolls by 1.9 million this year.

Molina Healthcare is also counting on its managed-care business to offset the high costs of caring for COVID-19 patients, as well as the requests from 10 states aiming to recoup Medicaid funds the Long Beach, Calif.-based insurer saved as consumers avoided the doctor's office during the pandemic. Over the past few years, Molina has acquired small Medicaid plans and entered new markets.

“Diversification is the best riskmanagement strategy one can execute,” CEO Joe Zubretsky said.