What’s Trending In the News: From Uncertainty Comes Innovation

Navigating uncertainty has become a top challenge this year for both government and commercial payers. Take for example, mixed messages about Medicaid: Federal funding may or may not be reduced, which could lead to increased utilization, lower profitability, or compliance issues. For commercial dental and vision plans, slowing economic growth and ongoing inflation may result in changes in plan membership. All payers need to prepare for what’s next, but bottom line, it’s difficult to respond in an unpredictable environment. 

Like our government and commercial benefits partners, SKYGEN closely monitors the prevailing headwinds affecting dental and vision benefits. Here are a few of the potential shifts we’re watching:

Impact of tariffs/potential tariffs on vision industry. Though it’s likely that tariffs will affect the vision industry, their impact is hard to quantify. According to The Vision Council’s analysis of U.S. International Trade Commission data, China supplies 73% of the plastic frames and mountings and 84% of the metal frames and mountings used in the U.S. Alternative suppliers are located in the European Union and southeast Asia. However, in 2018, when the China 301 tariffs took effect, U.S. vision businesses had other options for tariff-free import. In 2025, tariffs would affect those countries too, causing the vision industry to start planning for ways to handle the potential increase in costs.

Enactment of Medicaid work requirements. This perennial policy consideration may gain new ground in 2025. A February 2025 House of Representatives draft bill establishes work requirements for certain adult Medicaid enrollees as a condition of coverage. However, 64% of adults on Medicaid are already working full- or part-time. Those that don’t work are retired, in school, on disability, or are caregivers.   

Medicaid work requirements would be costly for states to implement: A 2019 study by the U.S. General Accountability Office (GAO) reported that costs could range from under $10 million to over $250 million depending on the state. These requirements would be administratively difficult as well, which may lead to errors or delays that result in some members losing coverage.   

A small number of states are considering or have already passed legislation related to Medicaid work requirements. Georgia is the only state with current Medicaid work requirements, and according to KFF Health News, its program incurred $40M in state and federal costs in its first year alone. Of that, nearly 80% was administrative cost. 

Reductions in Medicaid/Medicare funding. Washington, D.C. may be sending mixed signals about potential cuts to Medicaid/Medicare programs, but the message from the nation is pretty clear: 75% of Americans oppose cuts to Medicaid, and 70% say no to Medicare funding cuts.  If, when and how funding reductions come into force will affect states’ administration of these programs – possibly as urgently and with as much complexity as the redeterminations following the pandemic.

How SKYGEN Can Help Payers Respond
Changes on the horizon like increased costs, increased administrative requirements and reduced budgets can all lead to major changes in program administration. As we did with our customers during and after COVID, we partner with payers to help them continue to provide access to quality care and manage costs while adjusting to major challenges.

We put the industry’s leading benefits automation platform and our extensive specialty benefits expertise to work for payers, state agencies and other partners to:

• Accelerate dental and vision plan and process changes
• Reduce administrative burden and costs
• Expand access to care through innovation, including telehealth
• Engage members and increase health literacy to encourage a holistic and preventive approach to care
• Proactively manage regulatory compliance

Preparedness and agility start with the right partner. Start a conversation with our dental and vision experts soon to discover how SKYGEN can be your long-term partner in evolving your specialty benefits programs.