This is Emerson with the Becker's Payer Issues podcast. Here's your biweekly industry news briefing for September 30th. Average Medicare Advantage premiums and Medicare part d premiums will decrease in 2024 according to CMS on September 27th. The average Medicare Advantage monthly premium in 2025 will be $17. That's down from $18.23 this year. The average total part d premium will decrease by $7.45 next year to a total of $46.50.
The average stand alone part d plan premium will decrease slightly to $40. The average part d premium for MA plans with prescription drug coverage will decrease, to $13.50. A provision of the Inflation Reduction Act can capping out of pocket prescription drug costs of $2,000 a year for Medicare beneficiaries takes effect in 2020 5. CMS has offered plans a voluntary demonstration program to stabilize premiums as planned to implement
the out of pocket cap. The vast majority of plans opted into the demonstration. The agencies $5,000,000,000 to keep part a premiums stable, and it projects 35,700,000 people will enroll in Medicare Advantage Plans in 2025. Well, Centerra Health in Norfolk, Virginia is cutting about 200 jobs, with the majority of those cuts coming from its health plan division. Other cuts are corporate shared service positions that function in support of health plan operations.
Cuts span at multiple levels with 40% being in leadership positions. A final number of job cuts has not been determined as the system works to find affected employees other roles within the system. Sentara said that Medicaid redeterminations have resulted in its health plan losing 115,000 members, which is approximately 16% of its membership. Said the cuts align staffing levels with its health plan membership.
The cuts themselves, though, represent less than 1% of Sentara's 34,000 total employees across the health system side as well. The impacted positions span 10 states with a majority residing in Virginia. Well, CVS has struggled financially this year, and
investors are now taking action. According to a new report from the Wall Street Journal, shares in the company have fallen around 24% this year, and CVS plans to lay off 29 100 employees, which is less than 1% of the company, and those are roles primarily corporate roles. The health care company cut its earnings guidance multiple times in the last 12 months, primarily due to rising costs within Aetna's Medicare business. The company's pharmacy benefit unit also has issues.
The FTC is scrutinizing CVS Caremark over alleged insulin price inflation. Senior executives from CVS are meeting with the leaders of Glenview Capital Management, a hedge fund investor this week. They are discussing ways to improve operations at the company. The meeting could launch, an activist stance from the hedge funds. One of the leaders of the hedge funds told the Wall Street Journal that he intends to present ways to energize the company, but not break up the company.
Back in August, CEO Karen Lynch unveiled plans for $2,000,000,000 in cost cuts and parted ways with Aetna's president. She, along with CBS CFO, Tom Cowhey, are managing the insurance company now. Well, a new bill will require some forms of insurance in California to pay for IVF. Governor Gavin Newsom signed that legislation September 29th.
The bill requires large group insurers to cover the diagnosis and treatment of infertility, including in vitro fertilization, which can be a very expensive service, often costing up to $20,000 per round of treatment. The legislation applies to large group plans, which cover around 9,000,000 people in California. Legislation does not apply to Medicaid enrollees or
people who receive coverage from religious employers. The law goes into effect in July of next year for private sector employees and in 2027 for California state employees. The University of Vermont Health Network and MVP Health Care will no longer offer their joint Medicare Advantage Plans in Vermont in 2025. MBB Healthcare is based in Schenectady, New York.
It said it will no longer offer UVM Health Advantage, which is a co branded plan offered with the University of Vermont Health with and it will no longer be offered in the state of Vermont. UVM Health Advantage will still be available in 5 upstate New York counties in 2025. The company said it could know Medicare Advantage was no longer sustainable in Vermont given sharply increasing post pandemic surges in care utilization and difficult regulatory changes on the horizon in 2025.
There have been other health systems this year that have scaled back their Medicare Advantage plans. Well, 2 US democratic senators have introduced the Health Care Affordability Act, which aims to permanently extend the Affordable Care Act's enhanced premium tax credits for marketplace coverage. The credits were originally extended through the Inflation Reduction Act and are set to expire at the end of 2025.
If they're not renewed, over 20,000,000 Americans will see higher health insurance costs with an estimated 3,000,000 losing coverage and about 9,000,000 paying more. Identical legislation was introduced in the house as well. The tax credits increased the subsidies for individuals earning between 104100% of the federal poverty level and expanded eligibility for those earning above 400% of the federal poverty
level. Debates surrounding the ACA have shifted recently from repeal and replace to discussions on the impending expiration of those subsidies. Former president Donald Trump has said he would consider changing the ACA only if a less expensive alternative is proposed. And while the Republican Party has moved away from repeal efforts, lawmakers have expressed concerns about fraud on the state exchanges.
Marketplace enrollment reached a record high of more than 20,000,000 in 2024, partly due to those subsidies. Making those subsidies permanent would also add $335,000,000,000 to the national deficit between next year and 2034, according to the congressional budget office. Public support for making those credits permanent remains high with 78% of Americans in favor.
Well, in a reversal, a quick reversal, Maryland has said it will contract with Kaiser Permanente as a Medicaid managed care organization in 2025. Just a few days before this decision, the Maryland Department of Health told local media that it would drop Kaiser as a Medicaid MCO in 2025 after lengthy contract negotiations.
Maryland had also recently temporarily suspended new enrollment in Kaiser's Medicaid plan, citing a failure to meet contractual obligations related to financial operational reporting requirements. Kaiser has held a Medicaid contract in Maryland for over a decade, and it maintains the highest rated in terms of quality Medicaid plan in the state, by the NCQA's national standards.
The state will also renew its existing managed care contracts with 8 other organizations that includes both insurers and a few health system backed companies. That contract, appears to more than a 113,000 residents in the state of Maryland. And finally, a jury has determined that Blue Cross and Blue Shield of Louisiana shortchanged a New Orleans based surgical center by more than $400,000,000. That was, late September.
The jury determined the payout following a 7 year legal fight between the insurance company and St. Charles Surgical Hospital and Center for restorative breast surgery, which is a privately owned surgical center that provides breast surgery reconstructions to cancer patients. BCBS Louisiana was accused of shortchanging the center on thousands of breast reconstruction surgeries.
The jury jury determined that BCBS committed fraud when it authorized around 78 100 surgeries from 2015 to 2023 and then paid only about 9% of the related claims. The Safe Civil Court verdict was the surgery center's 3rd attempt to seek payment. That's after 2 previous cases were dismissed in federal court. BCBS denied that it had acted fraudulently, and it's important to note here that because the hospital is not a member of BCBS's provider network, BCBS argued it had no contractual
obligation to pay any of it. In Louisiana, about 93% of all physicians and hospitals belong to the Blue Cross network. A spokesperson for Blue Cross told Becker's that while the company appreciates and values the legal process, it strongly disagrees with the jury's verdict, and it will quickly appeal and expects to be successful.
That hospital was founded in 2003 and had been a part of the Blue Cross network until about a decade ago when it dropped out alleging that reimbursement rates were not, high enough. It continued to treat Blue Cross patients though because the surgeries were authorized by the insurer, but the surgeons only received a fraction of the charges they billed. BCBS had argued that authorizing a treatment does not guarantee guarantee payment.
That $421,000,000 award, though, it's one of the largest ever in Louisiana, which is known for large jury awards. If you'd like the latest health insurance industry news delivered straight to your inbox every morning, subscribe to the Becker's payer issues e newsletter on our website at beckerspayer.com.