2018 Looks Promising for Health Insurers Offering Marketplace Plans [Update]
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The Affordable Care Act’s (ACA) Health Insurance Marketplace has evolved over the years as a necessary evil for some healthcare providers. Some have withdrawn from it, citing profit losses and a growing number of unhealthy participants. However, new reports suggest that 2018 may be a better year for health insurance companies.
CNBC reported that in the second quarter of 2017 the nation’s top six health insurers combined reported $6 billion in adjusted profits for the second quarter, up about 29 percent from the same quarter a year ago. Some of that profit came as the result of some companies scaling back their participation in the Healthcare Marketplace. However, some companies providing insurance plans in the Marketplace are finding success.
In October of last year, health insurance company Anthem reported that 2018 was looking to be slightly profitable, and that it could potentially return to offering plans in the Marketplace in 2019 for certain regions. While companies like UnitedHealth and Aetna exited the Marketplace, other companies like Centene and CareSource that expanded into the Marketplace are expecting good years. So are insurers like Cigna and Molina Healthcare. Cigna is offering coverage in 2018 under the ACA on public exchanges in six states. In November, Forbes quoted Cigna CEO David Cordani saying the insurer expected 2017 individual results “to be slightly profitable.”
On a regional level, the Raleigh News & Observer reported that Blue Cross and Blue Shield of North Carolina reported its first ever profit from its ACA insurance policies, netting about $600 million last year. The company reported this month that 2017 revenue from ACA customers doubled from $1.8 billion to $3.7 billion as a result of higher ACA insurance plan premiums and the addition of 200,000 ACA customers obtained after competing insurers exited the marketplace. Blue Cross and Blue Shield is the only insurer in North Carolina that provides ACA-related insurance coverage in all of the state’s 100 counties.
The outlook for the ACA in 2018 has not been rosy. Participation in open enrollment for 2018, as well as which insurers would be providing Marketplace health insurance plans, was an unknown, considering that the White House pulled millions of dollars in open enrollment advertisements and stopped cost sharing reduction (CSR) payments to insurers. However, by the close of 2017, open enrollment numbers were more robust than expected with 11.8 million Americans purchasing health insurance plans from the Marketplace and the 11 state-based exchanges that do not use the HealthCare.gov platform, a decrease of 3.7% from last year, an unexpectedly positive response considering that the open enrollment period had been cut in half.
It demonstrated that even in the face of increasing premiums, individuals are still purchasing plans off the ACA exchanges, particularly low-income individuals who benefited from the use of Premium Tax Credits to offset premium increases. With insurers able to raise premiums without hurting participation in the Marketplace, the health insurance market is expected to stabilize and those health insurance companies who opted to stay with the marketplace are turning a profit and expecting growth for 2018.
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