CVS leadership contends the firm's business model is best suited to the future of the health care. ESI and Medco await news on a possible merger, and ESI reports ease in transition, eliminating Walgreen from its network.

CVS leadership shared a perspective that the firm's hybrid model is best suited for the future of the health care market place, and distinguished the model from the traditional PBM model for which ESI and Medco are seeking merger approval from the Federal Trade Commission. The Wall Street Journal considers the CVS perspective. The Journal also explores the opposition to the proposed merger voiced in this Houston Chronicle  news feature. Finally, the transition for ESI and Walgreens is explored in this WSJ article.

Gallup Poll reports growth in the number of Americans without healthcare insurance in 2011.

Our Take:  Researchers are reporting on the findings of a Gallup poll suggesting that more than 17% of Americans are without health coverage. The same poll found that about 14.8% of Americans were without insurance in a similar poll conducted in 2008. The results of this poll, while clearly a poll, and not based upon scientific methodology, will definitely appear in the headlines for the near term and are likely to spawn the presentation of additional research from other sources in the coming weeks. In the meantime, those interested in reading about the Gallup results might wish to begin here.

Our Take:  This week the recurring theme was, as stated above, the extent to which technology, exchanges, and the possible outcomes of the Supreme Court ruling on the constitutionality of the Affordable Care Act are intertwined. 

Discussions about exchanges focused upon the costs associated with establishing exchanges as well as the potential vulnerability of uninformed consumers purchasing insurance without adequate understanding of the product they are buying. An AIS feature can be reviewed here; http://aishealth.com/archive/nblu0112-01 , and explores strategies employed by some insurers in preparing for public exchanges.

The latest information on Walgreens and Express Scripts as well as Medco and Express Scripts

Our Take: At this time, as of January, 1, Walgreen is no longer participating in ESI's network. The retailer has adjusted projections slightly for the potential loss of revenue, and has contracted privately with some plans.

As for the Medco and ESI merger, there's been no additional information made publicly available at this time. The last public announcements indicated both firms were asked to provide additional information. This triggered some analysts to suggest the chances of the merger going through without change or divesting of some aspects of the business are low. We'll continue to monitor and keep you up to date as new information becomes available.

Policy analysts are weighing in on both sides of this issue.

Our Take: Generally supporters appreciate the fact that the administration's proposal takes into account the flexibility required by each state to give consideration to unique laws and requirements. The latitude to accommodate these differences is being viewed favorably. When the proposal is criticized, it is due to its lack of standardization, which opponents contend should be an objective of health reform. Comments are being accepted through January, 31. More information is available at this site, Stateline.

Health & Human Services (HHS) rejects waiver requests for Kansas and Oklahoma and some analysts suggest private exchanges may grow along with state run exchanges.

Some suggest they'll be a viable alternative for large employer groups without access to state exchanges in the near term.

Our Take:  The medical loss ratio guideline that insurers spend at least 80% of premiums on patient care and or quality initiatives has been a very visible issue. This week's announcement brings to eight the number of states whose waiver requests were rejected according to The Hill. 

The MLR rule is expected to have its greatest impact upon insurance brokers, whom some experts anticipate may be playing a significant role in the enrollment of subscribers in exchanges in the coming years. CMS offers this site which describes the MLR requirements and lists the status of exception requests by states. Those interested in viewing the final MLR rule's rebate provisions can find that information here, in the Federal Register, along with a fact sheet. 

Additionally, this article in AIS Health offers a look at the final MLR regulations relative to the original proposals, (paste this link in your browser; http://aishealth.com/archive/nref121911-03.) Additionally, this AIS article explores the role of brokers in navigating exchanges. (Again, paste this link into your browser to review; http://aishealth.com/archive/nhex1211-02 )

Health Data Management reports that the guidelines undergoing review by the Office of Management and Budget.

Our Take: Review by the OMB is the last step before the final rule is published in the federal register. There's been much speculation as to how the MLR rule might be revised to facilitate the payment of broker's fees. While widely debated, endorsement of a change by the National Association of Insurance Commissioners has failed to gain support. The group met recently and failed to issue a statement recommending change.

To date, some states are permitting employers to be billed for and pay a separate fee to brokers, but this is unlikely to preserve broker's earnings. Experts agree that once the fee is broken out as a separate line item, it will most likely invite scrutiny and result in lower fees being paid to brokers. We'll update as we learn more.

Insurance rate hike featured as New York's Department of Financial Services posts requests on line.  

A study conducted by the Commonwealth Fund and published this week is noting that premiums for employer sponsored health insurance have grown at rates that exceed income levels in every state in the U.S.

Our Take: Articles published in the Washington Post and other news sources explore the rate hikes, as the   Wall Street Journal highlights New York's new source of information for rate hike requests in that state. The focus underscores the financial dynamics of the market as well as the range of experience and resources individual states will have in managing rate hike requests in the coming year.

During recent discussions with investors, it's become evident that the firms are proceeding as though there will not be a new agreement put in place.

Our Take: Although neither Walgreen nor Express Scripts has issued a public comment on the status of their deadlocked negotiations, information offered for investors indicates the firms remain at an impasse. To date, analysts remained optimistic regarding the possibility of an agreement. Each firm sees the proposal offered by the other as inherently unfavorable.

At this point, Walgreen will lose about $5.3 billion in annual sales, but the retailer contends the loss is less than what it would incur over the long term by accepting the unfavorable contract terms it says are being offered by ESI. The firms each contend the terms offered by the other party are unacceptable. Read more on this in the Wall Street Journal.