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Insurers trick Medicare to boost revenue; Willis platform issues $52.6M cat bond

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Insurers trick Medicare to boost revenue; Willis platform issues $52.6M cat bond

Humana Inc., UnitedHealth Group Inc., Aetna Inc. and Anthem Inc. are among providers of Medicare Advantage plans that have been adopting a tactic called "crosswalking" to collect additional revenue from the federal government, The Wall Street Journal reported. Medicare ranks privately managed plans on a five-star scale and offers financial incentives to companies providing top-ranked plans. According to the report, if a company merges a lower-ranked contract with a higher-rated contract, the higher rating will apply to the newly added plans automatically without requiring any improvement in performance on customer service, health screenings and other quality measures. This shifting is called crosswalking. Though new budget deal provisions should significantly reduce the practice, payments are expected to remain unaffected until 2020.

Idaho Gov. Butch Otter is pushing back on the idea that a federal regulator rejected the state's plan to allow the sale of alternative Affordable Care Act plans, calling a recently published letter an "invitation" to rework the proposal.

Utah is seeking permission to become the latest state to expand Medicaid, but in a wrinkle, wants the federal government to pay a greater share of the costs for the expansion. Utah's proposal would ask the federal government to pay 90% of the additional costs of expanding the program, up from 70%, but is only willing to expand Medicaid up to the poverty line.

Willis Towers Watson Plc's platform saw the issuance of a $52.6 million Resilience Re Ltd. (Series 1811A) private catastrophe bond for an unknown sponsor, Artemis reported.

Cigna Corp.'s pending acquisition of Express Scripts Holding Co. includes a reverse termination fee of $2.1 billion. The fee is payable to Express Scripts if the deal fails to close due to lack of regulatory approval.

Employers Reassurance Corp. will bear the brunt of the large long-term care reserve deficiencies disclosed in January by General Electric Co. following the completion of a comprehensive review of its insurance exposures, newly obtained filings reveal.

Featured news

Sanofi, Regeneron drug cuts heart attack risk; House to vote on 'right-to-try': Sanofi and Regeneron's cholesterol drug reduced the risk of heart attacks and other major acute heart events by 15%, and lawmakers are set to take up a legislation aimed at giving critically ill patients greater access to experimental drugs.

Financial news in other parts of the world

Asia-Pacific: UBS banned from HK IPO; Nippon Life to buy DWS stake; Sompo closes Canopius sale

Europe: Deutsche Bank sets price range for DWS IPO; Barclays gets ring-fencing nod

Middle East & Africa: Emirates NBD eyes $2B capital hike; Tanzania saying no to bank rescues

The day ahead

Early morning futures indicators pointed to a higher opening for the U.S. market.

In Asia, the Hang Seng was up 1.93% to 31,594.33, while the Nikkei 225 gained 1.65% to 21,824.03.

In Europe as of midday, the FTSE 100 was down 0.02% to 7,225.86, and the Euronext 100 was up 0.41% to 1,034.55.

On the macro front

The U.S. Treasury budget is due out today.