REMINDER - CALL TOMORROW | UNH : THE NEXT DECADE WILL BE MUCH HARDER THAN THE LAST

• With growth in commercially insured individuals slowing, UNH has pinned their hopes to Medicare Advantage, but they are likely to be disappointed as penetration approaches peak.
• With U.S. economic growth slowing, health care utilization is accelerating putting the inevitable pressure on MLR
• Pharmaceutical manufacturer rebates have been subsidizing Medicare Advantage. The end to the safe harbor for these rebates in 2020 means plans will have to choose between raising premiums or reducing margins.
• The safe harbor rule change only applies to Medicare Part D but it seems likely to spread even without Congressional action.
• CMS is also considering putting an end to other pharmacy price concession in Part D which will further disrupt UNH's model.
• The HIF moratorium for 2019 has kept premiums in check but there is no vehicle for another 2020 delay.
• With the Trump Administration demanding greater risk sharing by ACOs and generally skeptical of "value-based care" as envisioned by the ACA, the future of OptumHealth doesn't look particularly clear.

Thomas Tobin
Managing Director


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Emily Evans
Managing Director – Health Policy



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