Aetna recommended for new D-SNP contract by the State of Michigan

Rhea-AI Summary

Aetna, a CVS Health company, has been recommended by the State of Michigan for a new contract to serve MI Coordinated Health beneficiaries eligible for both Medicare and Medicaid. The contract will provide a Highly Integrated Dual Eligible Special Needs Plan (HIDE SNP), offering Medicare benefits, most Medicaid covered benefits, and integrated long-term services and supports.

Aetna will continue serving 10 counties and expand to 29 additional counties in 2027. The company has been serving dually eligible beneficiaries in Michigan for over 10 years, currently managing health benefits for about 8,500 members. The new contract is expected to begin on January 1, 2026, and end on December 31, 2033, with renewal options.

Positive

• Recommended for new contract to serve MI Coordinated Health beneficiaries
• Expansion from 10 to 39 counties by 2027
• Currently manages health benefits for approximately 8,500 dually eligible members
• Potential 7-year contract with renewal options

Negative

• None.

Insights

Healthcare Policy Analyst

The State of Michigan's recommendation for Aetna to serve MI Coordinated Health beneficiaries is a positive development for CVS Health. This contract expansion allows Aetna to increase its footprint from 10 to 39 counties by 2027, potentially growing its member base significantly beyond the current 8,500 dually eligible members.

The 7-year contract duration, with renewal options, provides long-term stability and revenue predictability for this segment of CVS's business. The transition from a Medicare-Medicaid Plan to a Highly Integrated Dual Eligible Special Needs Plan (HIDE SNP) aligns with industry trends towards more integrated care models for complex patient populations.

While the financial impact isn't explicitly stated, the expansion into additional counties and the potential for membership growth could positively affect CVS's revenue stream in the coming years. Investors should monitor the implementation and any subsequent membership growth reports to gauge the full impact on CVS Health's bottom line.

Financial Analyst

This contract win strengthens CVS Health's position in the lucrative dual-eligible market, which is growing due to an aging population. While specific financial figures aren't provided, the expansion from 10 to 39 counties represents a 290% increase in geographical coverage, suggesting significant growth potential.

The long-term nature of the contract (2026-2033) provides revenue stability and allows for strategic planning. However, investors should note that the contract is still subject to a protest period and readiness review, introducing some uncertainty.

The transition to a HIDE SNP model could potentially improve profit margins through better care coordination and cost management. This aligns with industry trends towards value-based care models, which can be more profitable if managed effectively.

Overall, this development is positive for CVS Health's long-term growth strategy in the government-sponsored healthcare segment, which could become an increasingly important revenue driver for the company.

Aetna to support more Michigan residents eligible for both Medicare and Medicaid

DETROIT, Oct. 11, 2024 /PRNewswire/ -- Aetna®, a CVS Health® company (NYSE: CVS), announced the State of Michigan has recommended the company for a new contract to serve MI Coordinated Health beneficiaries who are eligible for both Medicare and Medicaid. Aetna was selected as part of a competitive bidding process.

Under the new contract, eligible Michigan residents will have access to an Aetna Highly Integrated Dual Eligible Special Needs Plan (HIDE SNP), which provides all Medicare benefits, most Medicaid covered benefits and integrates long-term services and supports (LTSS) for beneficiaries. Aetna will continue supporting dually eligible Michigan members in the 10 counties it currently serves and expand services to an additional 29 counties in 2027.

"Individuals dually eligible for both Medicare and Medicaid often have complex health care needs, making coordination of benefits essential for positive health outcomes," said Jason Smith, Vice President, Duals Markets at Aetna. "We're pleased with this win and the opportunity to continue our partnership with the State of Michigan to provide dually eligible members with an integrated health plan that provides access to quality, coordinated health care."

Aetna has been serving dually eligible beneficiaries in Michigan through a Medicare-Medicaid Plan (MMP) for over 10 years and currently manages the health benefits of approximately 8,500 dually eligible members. The contract award is part of the State's transition from an MMP plan design, which was in place as a demonstration program.

Pending the completion of the state's protest period and readiness review, the new contract is expected to begin on January 1, 2026, and end on December 31, 2033, with the option of renewals.

This contract has no impact on the existing contract with Aetna Better Health of Michigan to serve the Medicaid-eligible population through the state's Comprehensive Health Care Program (CHCP).

About Aetna

Aetna, a CVS Health business, serves an estimated 36 million people with information and resources to help them make better informed decisions about their health care. Aetna offers a broad range of traditional, voluntary and consumer-directed health insurance products and related services, including medical, pharmacy, dental and behavioral health plans, and medical management capabilities, Medicaid health care management services, workers' compensation administrative services and health information technology products and services. Aetna's customers include employer groups, individuals, college students, part-time and hourly workers, health plans, health care providers, governmental units, government-sponsored plans, labor groups and expatriates. For more information, visit Aetna.com. 

Aetna Medicare is a HMO, PPO plan with a Medicare contract. Our D-SNPs also have contracts with State Medicaid programs. Enrollment in our plans depends on contract renewal. Plan features and availability may vary by service area.

About CVS Health

CVS Health® is the leading health solutions company, delivering care like no one else can. We reach more people and improve the health of communities across America through our local presence, digital channels and over 300,000 dedicated colleagues – including more than 40,000 physicians, pharmacists, nurses, and nurse practitioners. Wherever and whenever people need us, we help them with their health – whether that's managing chronic diseases, staying compliant with their medications, or accessing affordable health and wellness services in the most convenient ways. We help people navigate the health care system – and their personal health care – by improving access, lowering costs and being a trusted partner for every meaningful moment of health. And we do it all with heart, each and every day. Follow @CVSHealth on social media.

Media contact

Robert Joyce
Robert.Joyce@CVSHealth.com

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SOURCE CVS Health

FAQ

What type of plan will Aetna offer under the new Michigan contract for CVS?

Aetna will offer a Highly Integrated Dual Eligible Special Needs Plan (HIDE SNP) under the new contract, providing Medicare benefits, most Medicaid covered benefits, and integrated long-term services and supports for beneficiaries eligible for both Medicare and Medicaid.

When is the expected start date for Aetna's new dual-eligible contract in Michigan (CVS)?

The new contract for Aetna, a CVS Health company, is expected to begin on January 1, 2026, pending the completion of the state's protest period and readiness review.

How many counties will Aetna (CVS) serve in Michigan under the new dual-eligible contract by 2027?

By 2027, Aetna will serve a total of 39 counties in Michigan under the new dual-eligible contract. This includes the 10 counties it currently serves and an expansion to an additional 29 counties.

How many dually eligible members does Aetna (CVS) currently manage in Michigan?

Aetna currently manages the health benefits of approximately 8,500 dually eligible members in Michigan.