Tracking Insurance Policy Shifts and Payer Strategy with Jakob Emerson

Summary

Becker’s Healthcare Podcast: Tracking Insurance Policy Shifts and Payer Strategy with Jakob Emerson

Release Date: August 8, 2025

Introduction

In the latest episode of Becker’s Healthcare Podcast, hosted by Scott Becker, the discussion centers around the dynamic landscape of insurance policy shifts and payer strategies within the U.S. healthcare system. Scott is joined by Jakob Emerson, a seasoned expert in payer issues, to delve into the current trends, challenges, and strategic responses shaping the insurance industry.

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1. Insurance Rate Increases: The Arkansas Case Study

Jakob Emerson opens the conversation by highlighting significant rate increase proposals from major insurers in Arkansas. He states:

“We’re seeing massive rate proposals across all the states, a 54% rate increase from Centene in Arkansas alone. [00:58]”

Emerson emphasizes that Arkansas Governor Sarah Huckabee Sanders has publicly condemned these proposed hikes, labeling them as “insane” and urging the state’s insurance commissioner to reject them. This situation exemplifies the broader national trend where insurers are proposing substantial rate increases amidst political and economic pressures.

Key Points:

• Centene and Blue Cross Blue Shield have proposed significant rate hikes for ACA plans in Arkansas.
• Governor Sanders is actively opposing these increases, reflecting a state-level pushback against insurers.
• The rate increases are partly driven by anticipated discontinuation of enhanced ACA premium tax credits.

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2. Broader Implications of Insurance Rate Hikes

Scott Becker reflects on the broader issue of rising insurance costs, noting:

“People are talking about rate hikes of 15, 20% or more, at a time when health insurance seems like it’s gotten impossibly expensive for so many people. [04:09]”

He underscores the complexity of the problem, pointing out that while ACA-related factors contribute, there are additional elements at play, including rising medical costs and increased utilization rates. Emerson adds that the anticipated reduction in premium tax credits under a Republican-controlled Congress is a significant driver behind these rate hikes, though it represents only a portion of the overall increase.

Key Points:

• Rate hikes are occurring both within and outside the ACA framework.
• Factors beyond tax credits, such as overall medical cost inflation and increased utilization, are major contributors.
• The political landscape, especially Republican control at the federal level, influences these trends.

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3. State vs. Federal Policy Dynamics

Emerson discusses the contrasting actions at state and federal levels:

“At the local level or the state level, Republican governors are coming out against the insurance companies for proposing higher rates... but at the federal level, it's Republican leaders that are holding up a possible extension to help alleviate some of those rates.” [00:58]

He highlights Arkansas as a focal point for progressive insurance policies, including attempts to regulate pharmaceutical benefit managers (PBMs). However, recent legal setbacks have impeded these efforts, illustrating the challenges of implementing state-level reforms in a complex federal system.

Key Points:

• State governments, particularly Republican-led ones like Arkansas, are actively challenging insurer rate hikes.
• Federal actions, or lack thereof, by Republican leaders can counterbalance state efforts.
• Legal battles, such as those involving PBMs, showcase the contentious nature of insurance regulation.

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4. Federal Coverage Policies: IVF and GLP-1s

The conversation shifts to federal coverage policies, with Emerson noting two significant developments:

1. In Vitro Fertilization (IVF) Coverage:

   “Back when President Trump was running for his second term, he had pledged that he was going to be requiring commercial insurance companies to provide coverage for in vitro fertilization services... there is no plans within the White House at this point to move forward with that type of plan. [05:29]”

   Emerson explains that the anticipated federal mandate for IVF coverage is no longer in motion, leaving insurers without this potential coverage requirement.

2. GLP-1s for Weight Management:

   “CMS wants to allow state Medicaid programs and Medicare Part D plans to cover GLP-1s for weight management on a voluntary basis. [07:30]”

   He contrasts this with previous proposals to include anti-obesity medications under Medicare and Medicaid, which were ultimately not implemented. The renewed interest from CMS indicates an evolving stance on covering these expensive yet clinically promising medications.

Key Points:

• Federal mandates for IVF coverage have been shelved, removing a potential policy driver for insurer coverage.
• CMS is reconsidering the voluntary coverage of GLP-1s for weight management, reflecting ongoing debates about addressing obesity through medication coverage.
• The economic feasibility of covering such treatments remains a critical factor.

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5. Economic Implications and Market Responses

Scott Becker provides an analysis of the economic challenges associated with these coverage decisions:

“An IVF cycle for a patient might cost $20, $25,000 a year or a cycle. There’s no way the federal government can end up covering that. [07:30]”

He contrasts this with GLP-1s, which primarily involve medication costs without the extensive labor and management required for IVF. This distinction underscores the differing economic impacts of covering various treatments.

Emerson highlights strategic responses from insurers, particularly Cigna’s approach to the GLP-1 market:

“Cigna really seems to be the leader of the pack here in terms of how they’re building their position as a key player in this high demand weight loss market. [08:56]”

Cigna is leveraging both its health plan and pharmacy benefits divisions to innovate in drug access and payment models, including requiring lifestyle modifications as a condition for coverage. This strategy aims to balance cost savings with clinical effectiveness, making GLP-1s more financially viable for both insurers and patients.

Key Points:

• The high cost and complexity of procedures like IVF make federal coverage impractical.
• GLP-1 medications present a different economic scenario with potentially manageable costs.
• Insurers like Cigna are pioneering models to integrate GLP-1 coverage with supportive programs to ensure cost-effectiveness and patient adherence.

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6. Strategic Insights: Cigna’s Role in the Weight Loss Market

Emerson delves deeper into Cigna’s initiatives:

“They’re using both their health plan and their pharmacy benefits arm under Evernorth and Express Scripts to launch a lot of new models on how these drugs are accessed, how they’re paid for and ultimately how they’re controlled through... [08:56]”

He notes that approximately 50% of Cigna’s PBM clients now opt to cover GLP-1s for weight loss, indicating a significant uptake and acceptance of this approach within the market. This move positions Cigna as a leader in addressing the high-demand area of weight management through innovative insurance solutions.

Key Points:

• Cigna’s integrated approach leverages multiple facets of its business to enhance GLP-1 accessibility.
• The partnership between health plans and pharmacy benefits managers (PBMs) facilitates new payment and access models.
• A substantial portion of Cigna’s PBM clients are adopting GLP-1 coverage, reflecting market confidence in this strategy.

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Conclusion

The episode concludes with Scott Becker expressing his appreciation for Jakob Emerson’s insights:

“Jacob, always a pleasure to visit with you. I always learned so much. I hope our audience does too.” [10:23]

Emerson’s comprehensive analysis sheds light on the intricate interplay between state and federal policies, economic constraints, and strategic insurer responses shaping the current and future landscape of healthcare insurance. As insurers navigate these challenges, innovations like Cigna’s models for GLP-1 coverage offer potential pathways to balancing cost, access, and quality in patient care.

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Notable Quotes:

• Jakob Emerson [00:58]: “We’re seeing massive rate proposals across all the states, a 54% rate increase from Centene in Arkansas alone.”
• Scott Becker [04:09]: “People are talking about rate hikes of 15, 20% or more, at a time when health insurance seems like it’s gotten impossibly expensive for so many people.”
• Jakob Emerson [07:30]: “There is no plans within the White House at this point to move forward with that type of plan.”
• Scott Becker [07:30]: “An IVF cycle for a patient might cost 20, 25,000 a year or a cycle. There’s no way the federal government can end up covering that.”

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This episode of Becker’s Healthcare Podcast provides a nuanced exploration of the challenges and strategic maneuvers within the insurance sector, offering valuable insights for healthcare professionals, policymakers, and stakeholders navigating the evolving landscape of U.S. healthcare.

Transcript

[Beckers Healthcare]

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[Scott Becker]

This is Scott Becker with the Beckers Healthcare Podcast. 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. Why don't you give us a sense? What are a couple of the key stories that you're following currently?

[Jacob Emerson]

Absolutely, yeah. It's great to talk with you, Scott. So I thought we could talk today a little bit, actually less about what some of the private insurers 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 moves they've been making recently. And then 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 the governor there, Sarah Huckabee Sanders, the Republican governor, calling on the state's insurance commissioner to reject some major rate increases proposed by Centene and the Blue Cross Blue Shield plan there for the aca, which is 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 so we're seeing the governor now come out 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 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 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 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 proposing 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.

[Scott Becker]

Yes. No, I think that's a fascinating perspective. But, 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 15, 20% or more. @ a time when health insurance seems like it's gotten impossibly expensive for so many people. I can't even believe the rates that we're paying for health insurance. And so regardless of even the ACA piece of this, and I take the point on Republicans in Washington are trying to sort of scale back the ACA that's leading these big insurance companies trying to push up rates for ACA subsidized patients or members. But even outside of that, medical loss ratios have been going way up where we are seeing just incredible rate hikes. And at the end of the day around this, without fixing supply and demands in our country and taking other steps and just really a challenging situation.

[Jacob Emerson]

Yeah, certainly. And, you know, I should make very clear, I think the tax credits are only a small percentage or 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 policy moves coming out from Huckabee Sanders specifically, and are taking on the pharmaceutical benefit manager industry, you know, in 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 PBMs have won in the latest round there. But just thought it was interesting that, you know, Arkansas has really been making a lot of big news in the national insurance realm.

[Scott Becker]

Yeah, no, it's, it is really interesting. And there's no easy answers. It doesn't seem like, I mean in some ways they credit to Huckabee Sanders for fighting some of these things. At the same time, just really challenging situation because you've got this real bastardization of healthcare, non free market health care. And I don't know that I've got any real answer, but I do know that issue and the access is horrible, way out of whack. So we'll see how it goes. It is discouraging though.

[Jacob Emerson]

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 this week over federal coverage policies and that's that back when President Trump was was running for his 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 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 under a federal executive order or we're not really sure how that would have been enforced or taken place. But at this point, you know, just for 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 proposal from CMS that they want to allow state Medicaid programs and Medicare Part D plans to cover GLP1s for weight management on a voluntary basis. And if you remember, that was something that the Biden administration somewhat proposed for CMS to cover anti obesity medications under Medicare and Medicaid last year. But that, but then earlier this year CMS dropped the implementation of that policy in their final rulemaking. And so 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 healthcare system. But on the flip side, from the clinical perspective seem to just be miracle drugs from a variety of, in a variety of ways. So fascinating to see how the federal government 100%.

[Scott Becker]

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 20, $25,000 a year or a cycle, excuse me. And there's no way the federal government can end up covering that. Just not going to work economically. It just, it's, it's just debacle unless you get those costs way down. And those costs, unlike the GLP1 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 the GLP1S is literally just a shot and doesn't require a lot of management and 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 you're seeing on the GLP1s and I think this is a trend you're going to see. I mean Novo Nordisk is getting hammered on their earnings and they're the original developer of the Wegovy drug. And what they basically said is that we're going to move towards a cash pay world in this and that's going to lead to ultimately a much lower price on these things because people are going to pay for them out of pocket versus through the payers and so forth. 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 going to be able to pay for that if they're able to get 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.

[Jacob Emerson]

Right, right. No, it's, it's interesting to see what's going to 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 were obviously 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 using both their health plan but also their pharmacy benefits arm under, under Evernorth and Express scripts to really launch a lot of new models on how these drugs are accessed, how they're paid for and ultimately how they're controlled through, through lifestyle support and prescribing methods requiring certain lifestyle modification programs before either the health plan pays for us or maybe how the, how the PBM negotiates with the manufacturers to then bring back some of those savings to their employer clients. So we got a lot of details about 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 now they're up at about 50% of their PBM clients are choosing to cover the cost of GLP1s for weight loss. So some really interesting stuff coming up from Cigna, specifically on how they're navigating this issue.

[Scott Becker]

Jacob, always a pleasure to visit with you. I always learned so much. I hope our audience does too. Thank you so much for joining us today on the Beckers Healthcare Podcast. Thank you very, very much.

[Jacob Emerson]

Thank you, Scott.