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Insurers and ACA Marketplaces Over Time

Posted by Laura McMullen on Thu, Jun 15, 2017

We’re approaching CMS’ June 21 deadline for Qualified Health Plan applications and rate table templates for plans to be sold on or the state marketplaces. So, it seems like a good time to look back over the last four years and see how the mix of insurers participating in the exchanges changed between 2014 and 2017.

ACA.pngThe Kaiser Family Foundation’s Health Reform blog has a nice summary here that includes interactive maps. Data for this analysis was gathered from, state exchange enrollment websites, and insurer rate filings to state regulators.

Year by year overview

  • 2014: on average 5 insurers participated in each state, ranging from 1 insurer in New Hampshire and West Virginia to 16 in New York.
  • 2015: on average 6 insurers participated in each state, ranging from 1 in West Virginia to 16 in New York.
  • 2016: on average 5.6 insurers participated in each state, ranging from 1 in Wyoming to 16 in Texas and Wisconsin. The mix of carriers in each state changed a lot in 2016 as CO-OPs failed and new plans entered the market.
  • 2017: on average 4.3 insurers participated in each state, ranging from 1 in Alabama, Alaska, Oklahoma, South Carolina and Wyoming to 15 in Wisconsin.

Other findings from the analysis

  • There are fewer choices in most counties. In 2017, 58% of enrollees (living in about 30% of counties) had a choice of three or more insurers, compared to 85% of enrollees (living in about 63% of counties) in 2016.
  • Rural areas have fewer insurers than metro areas. In 2017, metro areas have 2.5 insurers vs. 2 insurers in rural areas. 87% of 2017 enrollees live in metro areas.
  • Many counties are served by one carrier, most likely a Blue Cross Blue Shield or Anthem plan. In 2017, about 21% of enrollees (living in 33% of counties) have access to just one insurer on the marketplace (up from 2% of enrollees living in 7% of counties in 2016).

How has the mix of insurers impacted your network? Has your network participation in the ACA changed over the last four years?

Tags: health insurance, Affordable Care Act, ACA. healthcare exchanges, Healthcare, ACA, health insurance co-ops

CO-OPs and Integrated Health Care Delivery Systems Exiting Insurance Market

Posted by Laura McMullen on Wed, Dec 21, 2016

ACA.pngOne of the intended effects of the Affordable Care Act was to open up the insurance marketplace to new competitors. In 2015, we examined CO-OPs and integrated health care delivery systems to learn more about their business models and positioning. Both types of companies are leaving the market now without having reached the critical mass of members and premium needed to compete against the larger, more established insurance companies operating in their service areas.

Here are the stats on CO-OPs, according to

  • 5 of the 23 CO-OPs that were originally chartered under the Affordable Care Act will be operational in 2017.
  • 2 of the remaining CO-OPs are working with outside investors to stay in business: New Mexico Health Connections is currently profitable and working with Raymond James, a NY investment firm, to raise a substantial amount of funding to continue operations and Evergreen Health in MD is working with private equity investors to transition from a non-profit CO-OP to a for-profit entity.
  • CO-OPs owe more than $130 million to the 2015 Affordable Care Act risk adjustment program that distributes payments from health insurers with lower-risk enrollees to health insurers with higher-risk enrollees. This program was created “to prevent insurers from designing plans that appeal only to healthy enrollees, and to ensure that premiums reflect benefit levels, rather than the overall health of a plan’s enrollees.”

Integrated health care delivery systems are winding down their operations too, as reported in the Denver Post.

  • Catholic Health Initiatives, Tenet Healthcare Corp., WellStar Health System (GA), and Piedmont Healthcare (GA) have all sold or shut down their insurance operations after steep losses.
  • High start-up costs to compete against well-established carriers and low membership contributed to their decisions.
  • Ascension Health (St. Louis) and Northwell Health (Great Neck, NY) remain in the insurance business.
  • “McKinsey & Co. said in a 2015 report that while hospital-owned insurers covered just 8% of the nation’s insured, 20 of those 107 insurers accounted for two-thirds of that total.”

How do these plan shut-downs affect your business? Are the providers in these networks already in your networks? Do you want to add them?

Tags: health insurance, Affordable Care Act, ACA, provider networks, health insurance co-ops

Open Enrollment 2017 Opens This Week Amid Rate Hikes and Fewer Plan Options

Posted by Susan Donegan on Mon, Oct 31, 2016

Federal regulators opened the federal exchange for consumers to browse for plans on Monday, as they announced that rates will be up 25% for the plans for which the tax subsidies are calculated. HHS also warned that more than one in five consumers using the site will only have one insurer from which to choose coverage. The second lowest cost silver plan on the exchanges is the benchmark plan that regulators base tax credits on. That's the rate that is up 25%, which is also the expected overall increase in 2017. (USA Today, 10/24/16)

Health insurance companies are still struggling with improving price transparency in order to gain greater trust from their consumer base. One survey has shown low customer service satisfaction and a need for payers to inform consumers about their financial responsibility. Commercial health payers may lose contracts with employers by lacking price transparency. Adam Russo, CEO of Phia Group, explained that the lack of price transparency led him to self-insure his employees. (HealthPayer Intelligence, 10/24/16)

The White House predicts 13.8 million people will enroll in a health plan on the Affordable Care Act’s exchanges by Jan. 31, the end of the open enrollment for 2017 coverage. That marks a 9 percent increase beyond the 12.7 million plan selections by the end of open enrollment in 2016. (The Business Journals, 10/20/16)

Hundreds of millions of dollars have been invested in dozens of fledgling health insurance companies. More than $1.3 billion was invested in these companies in the United States in 2015 alone, according to CB Insights. With all the funds and fanfare surrounding health insurance startups, how do they plan to change the insurance industry? (Healthcare Dive, 10/19/16)

When the health insurance marketplace opens, many consumers will have a new option for fourth open-enrollment period: standardized health plans that cover basic services without a deductible. With many health plans on the marketplace including deductibles in the thousands of dollars, consumers have complained that they were getting little benefit beyond coverage for catastrophic problems. (The New York Times, 10/17/16)

"Clearly, there are many individuals who are not getting federal premium subsidies who could face significant increases in their costs next year. These increases are likely to be bigger than those that occurred in 2015 and 2016. However, prior to the ACA, annual premium increases were around 10% per year. So, the 2017 rate hikes will be more in line with historical trends," says Caroline Pearson, senior VP at Avalere Health LLC. (AIS's Inside Health Insurance Exchanges.. From INSIDE HEALTH INSURANCE EXCHANGES"Subsidies Insulate Many From Rate Hikes; Millions Aren't Eligible", 9/29/16)

Tags: Healthcare, ACA, healthcare exchanges, HIX

CMS Efforts to Ensure Network Adequacy and Alter Risk-Adjustment Payments

Posted by Susan Donegan on Fri, Sep 30, 2016

CMS is aware that some states may struggle more than others in developing strategies that ensure network adequacy, especially those with large rural populations. So, CMS is teaming up with Medicaid directors to create a guidance that will read more like a best-practices document, James Golden, director of the agency's division of managed-care plans, said at the Medicaid Health Plans of America conference. (Modern Healthcare, 9/22/16)

HHS’s proposed Notice of Benefit and Payment Parameters for 2018 could alter the way risk adjustment and other tenets of ACA exchanges work, but the provisions, to keep carriers on the exchanges or bring back those that have left, failed to impress Wall Street or ease concerns of insurers. One major analyst said the sheer complexity of the formulas used by HHS is one of the reasons few health plans make money on public marketplaces. (Health Business Daily, 9/20/16)

Urban Institute researchers found that, in more than three-quarters of states and 80 percent of the large metropolitan areas they studied, total premiums were lower in an average marketplace plan than in employer-provided plans. "It's not that these markets are necessarily outrageously expensive -- in the vast majority of cases they're not," said Linda Blumberg, a senior fellow in the health policy center of the Urban Institute. However, most people who receive health insurance through their employers directly pay only a portion of the premium each month. The rest is paid by the employer, as part of workers' compensation. (Washington Post, 9/19/16)

President Barack Obama urged U.S. insurers offering coverage next year on the exchanges to step up their efforts to enroll those who remain uninsured, especially younger and healthier Americans. His administration will help find and enroll those who still lack coverage, with a particular focus on enrolling young adults. (Fortune, 9/13/16)

Blues Plans Updates:

Blue Cross Blue Shield of Tennessee, the state’s largest health insurer, announced plans to exit the federal health exchanges in Nashville, Memphis and Knoxville next year. The insurer cited considerable losses and the ongoing uncertainties on the individual health marketplaces created under the Affordable Care Act (ACA) as reasons for the withdrawal. (Insurance Business America, 9/27/16)

Blue Cross Blue Shield of Nebraska (BCBSNE) plans to discontinue its ACA products due to poor financial performance threatening the payer’s responsibility “to remain stable and secure.” (Fierce Healthcare, 9/26/16)

Blue Cross Blue Shield of North Carolina (BCBSNC), has announced that it will continue offering ACA exchange plans. (Fierce Healthcare, 9/26/16)

Tags: Healthcare, health reform, ACA, healthcare exchanges, HIX

Operational Adjustments in the Health Care Marketplaces as Plans Leave the Exchanges

Posted by Susan Donegan on Mon, Sep 12, 2016

CMS said it plans to roll out a pilot program to assess the effect of more stringent requirements for people signing up for insurance through the ACA's public exchanges outside of the open enrollment period. "Our intent in conducting such a pilot would be to evaluate the impact of pre-enrollment verification of special enrollment period eligibility on compliance, enrollment, continuity of coverage, the risk pool, and other outcomes. The scope of the pilot is still being determined." (Business Insider, 9/6/16)

To help make it easier for consumers to choose health insurance plans, the federal government, is encouraging insurers to offer “simple choice plans” as an option this fall. The goal is to make comparing plans easier for consumers, according to a report from KHN. Acing the consumer shopping experience is crucial for the success of offering standardized plans. “Otherwise you might as well not bother,” Sabrina Corlette of the Georgetown Center for Health Insurance Reform told KHN. (Fierce Healthcare, 9/2/16)

Aetna, UnitedHealthcare and Humana–the company Aetna recently tried to merge with–are all leaving exchanges. On top of these departures are smaller providers, including several government-funded carriers. The biggest problem cited is demographics. Namely, the people signing up for the program are older and sicker than expected. Some may also be taking advantage of insurers by waiting until they are sick or need medical help to sign up. (Law Street, 9/1/16)

Federal officials continue to make operational adjustments in the health care marketplaces and meet with some insurers to encourage them to offer more plans in areas of the country that are forecast to be low on competition following the withdrawal of some major insurers for 2017, said Department of Health and Human Services Secretary, Sylvia Burwell. (Kaiser Health News, 9/1/16)

A new McKinsey & Co. analysis of regulatory filings for 18 states and the District of Columbia found that 75% of the offerings on their exchanges in 2017 will likely be health-maintenance organizations or a similar plan design known as an exclusive provider organization, or EPO. Only a quarter of the exchange plans next year would still be preferred-provider organizations, or PPOs, with a larger selection of doctors and hospitals and include out-of-network coverage. (Wall Street Journal, 8/31/16)

The Obama administration will roll out a big push later this year encouraging the 28.6 million folks who remain uninsured to sign up when open enrollment begins in November. An enrollment boost would likely signal that healthier people are entering the market. Providing coverage on the individual exchanges remains a struggle. Insurer downsizings mean that 19% of all enrollees will only have a single company to choose from, up from 2% this year, according to a new Kaiser analysis. And 38% of enrollees may only have two insurers in their exchanges. (CNN Money, 8/29/16)

Tags: healthcare reform, ACA, healthcare exchanges, HIX

Rising Health Plan Rates, Health Plan Consolidation and Competition on the Exchanges

Posted by Susan Donegan on Thu, Aug 25, 2016

We’re reading about health plan changes for 2017 Open Enrollment and the impact of competition on the exchanges. Here’s a summary of interesting news, perspectives and datapoints.

As rates for health plans sold on public exchanges continue to rise higher than expected, causing large insurers to cut and run from this marketplace, brokers and advisers are gathering useful information. Plans in the employer market are borrowing lessons learned from the exchanges in terms of ways to evolve their product designs to be more efficient,” explains Caroline Pearson, senior VP of Avalere. (Employer Benefit Adviser, 8/22/16)

The health insurance market seems to be heading toward more and more consolidation as the major payers Humana and Aetna along with Cigna and Anthem seem to be bent on merging, even though the Department of Justice filed suit to block the deals. More payers are moving outside of the exchanges, the tensions are pointing at some of the faults within the ACA, which may have brought difficulties that stand in the way of keeping revenue stable among top insurers. (Health Payer Intelligence, 8/19/16)

Competition on some exchanges will be diminished next year when three of the nation's largest health insurers — Aetna, UnitedHealthcare and Humana — will sell individual plans in many fewer markets. The departure of several Blue Cross and Blue Shield plans in various states will also hurt. These pullbacks also come on top of the closure of 16 nonprofit co-ops. What's ahead for consumers depends very much on where they live. (NPR, 8/18/16)

Roughly 20 million more Americans have health insurance now than when President Obama’s health care law was passed in 2010. There are still about 24 million adults with no coverage, according to a survey by the Commonwealth Fund, a health research group. That translates to an uninsured rate of about 13 percent, down from 20 percent in 2013. (New York Times, 8/18/16)

Projected Losses on the Exchanges

Tags: ACA, healthcare exchanges, Health plan, HIX

New Plans Being Added While Existing Plans Are Coming Off the Exchanges

Posted by Laura McMullen on Fri, Jul 29, 2016

We’re reading about exchange plan comings and goings and the impact of the ACA on the federal budget. Here’s a roundup of interesting datapoints, perspectives, and news.

Aetna and Gateway Health are forming an accountable care organization and releasing a new individual insurance plan to sell on in time for the 2017 open enrollment period. The new plan Aetna Leap offers lower overall out-of-pocket costs for members who see providers within the new Aetna Whole Health–Gateway Health network. (Healthcare Finance, 7/15/16)

7 ... of the 23 original Consumer Operated and Oriented Plans (CO-OPs) under the ACA will sell coverage on the exchanges this fall, with the remainder on the financial ropes. (AIS Health Business Daily, 7/26/16, Click here to read the INSIDE HEALTH INSURANCE EXCHANGES article in which this datapoint appeared — "With 16 CO-OPs Out, MCOs May See Smaller Risk-Adjustment Payouts" Free for HEX subscribers; $17 for non-subscribers.) For a refresher on CO-OPs, take a look at our blog postfrom 10/15.

Humana Inc. plans to greatly reduce the plans it offers through public health insurance exchanges and stop offering coverage in “substantially” all other individual markets next year. The health insurer said “individual business remains very challenging.” With the change, Humana said its 2017 “presence for its individual offerings is expected to cover no more than 156 counties across 11 states, down from 1,351 counties across 19 states in 2016.” (Business Insurance, 7/21/16)

The federal government's deficit for this year is expected to be $600 billion, or about $16 billion lower than what was predicted this past February, according to amid-year analysis released Friday by the White House. Lower-than-expected enrollment in the Affordable Care Act's public health insurance exchanges shaved $6 billion off federal spending. (Modern Healthcare, 7/15/16)

Questions about access and consumer preferences continue to be in the news as the debate about the future of the Affordable Care Act continues. House Ways and Means hearings on July 12 resulted in lawmakers agreeing that the ACA isn’t working as intended and that enrollment is lower than anticipated. (AIS Health Business Daily, 7/25/16)

Access to healthcare remains a challenge through the Affordable Care Act and commercial health plans, according to a study in the July issue of Health Affairs. The study investigated two questions: first, no matter the nominal size of a network, can patients gain access to primary care services from providers of their choice in a timely manner? Second, how does access compare to plans sold outside insurance Marketplaces? (Managed Healthcare Executive, 7/22/16)

43% ... of young adults (age 18 to 34) are willing to consider a network without their current provider for a lower premium, according to a recent survey by the Deloitte Center for Health Solutions. (AIS Health Business Daily 7/27/16, Click here to read the HEALTH PLAN WEEK article in which this datapoint appeared — "Insurers Are Learning the Do's And Don'ts for Selling to Millennials" Free for HPW subscribers; $17 for non-subscribers.)

Tags: Affordable Care Act, ACA, healthcare exchanges, HIX

Carrier Offerings on the Exchanges and Employer Preferences in the Commercial Group Market

Posted by Laura McMullen on Fri, Jul 08, 2016

We’re reading about carrier offerings and costs on public exchanges and employer preferences in the commercial group market. Here’s a roundup of interesting datapoints, perspectives, and news.

Health insurers are announcing their intentions for the 2016-17 open enrollment period:

And requesting rate increases:

  • Credit Suisse reports that 20.7% is the average increase in the price of plans that will be sold in 2017 through public exchanges. (AIS Health Business Daily, 6/22/16, From INSIDE HEALTH INSURANCE EXCHANGES)
  • Arizona Blue has requested a rate increase of 65.9% and will be the only exchange option in every county in the state. Phoenix Health Plans requested a rate increase of 60.4%. (Arizona Republic, 6/13/16)
  • Louisiana Blue Cross Blue Shield requested rate increases ranging from 20.5% to 28.3% on average for the various plans offered on the exchanges. Their plans cover about 70% of the people in the individual market in that state. It’s (New Orleans Times-Picayune, 6/6/16)

Employers are still offering health insurance to their employees: "Everyone thought [the Affordable Care Act] was the curtain call for small businesses...that they would just drop off coverage and send their folks to the exchanges. We haven't seen that happen. In fact, we've seen a bit of resurgence in small group in the last several months and are growing slightly in terms of overall membership." — Brian Cheney, divisional vice president of small business at Health Care Service Corp., which operates Blues plans in five states, told The AIS Report on Blue Cross and Blue Shield Plans*.*. (AIS Health Business Daily, 7/6/16, Click here to read the THE AIS REPORT ON BLUE CROSS AND BLUE SHIELD PLANS* article in which this quote appeared — "Death of the Small-Group Market Has Been Greatly Exaggerated, Blues Plans Say" Free for THE AIS REPORT subscribers; $17 for non-subscribers.) * Not affiliated with the Blue Cross and Blue Shield Association or its member companies. (AIS Health Business Daily, 7/6/16)

And they see opportunities to make improvements for their employees:

  • “Employers are doubling down on opportunities to impact health care quality and costs at the source — by working more closely with high-performing providers through select networks and providing better information to help employees make higher-value health care choices,” stated a report by the Pacific Business Group on Health (PBGH) for the American Health Policy Institute (AHPI). (AIS Health Business Daily, 6/16/16)
  • 85% ... of employers that evaluated private health insurance exchanges opted to not move forward, with the main reason being unproven cost savings. About half were also concerned about employee disruption, according to employer surveys by Chicago-based Pacific Resources Benefits Advisers, LLC. (AIS Health Business Daily, 6/23/16, From INSIDE HEALTH INSURANCE EXCHANGES "Private Exchanges Are Evolving, But Firms May Lack Motive to Adapt”)

How are these trends playing out in your market? Are these rate increases an opportunity for you? What about the employer interest in high-performing networks?

Tags: ACA. healthcare exchanges, ACA, HIX

Voluntary Ancillary Growth is a By-Product of ACA

Posted by Laura McMullen on Fri, Jun 24, 2016

Business is booming for insurance companies specializing in ancillary benefits for employer groups – and the mandated benefit requirements of the Affordable Care Act are driving the growth. A 2016 study of Form 5500 Schedule A data by analytics firm, miEdge, valued the market at more than $1 billion in 2015, a gain of 3.32% over the previous year.

Employee Benefit Advisor interviewed four ancillary companies with double-digit growth to learn more about their strategies to capitalize on this trend. Click here to read the article. Here are some highlights:

  1. Medical premiums are still growing in part due to mandated benefit provisions in the Affordable Care Act. Brokers and employers are looking for ways to offer comprehensive benefits without raising overall cost and voluntary ancillary options fit right in.
  2. Private exchanges make it easier to offer a mix of voluntary and employer-paid benefits from multiple carriers. Employees are comfortable with e-commerce so online enrollment is business-as-usual.
  3. Pediatric dental care is required by the ACA creating a new market for dental benefits. More interest and education about dental has opened the door to other ancillaries, such as vision (often sold with dental) and even legal plans.

Employee Benefit Advisor reported “the top five grossers in voluntary benefits, according to miEdge, were Delta Dental of Rhode Island (up 105.59% and over $40 million), Delta Dental of Illinois (up 99.34% and over $46 million), Combined Insurance Company of America (up 82.03% and over $81 million), Hyatt Legal Plans (up 21.12% and over $15 million), and Principal Financial Group (up 20.83% and over $14 million).”

How is your company capitalizing on this trend?

Tags: Affordable Care Act, Ancillary benefits, ACA, insurance companies, employee benefits, HIX

What Does Healthcare Really Cost?

Posted by Laura McMullen on Fri, Jun 10, 2016

The Affordable Care Act primarily addressed the cost and availability of health insurance. What about the cost of healthcare? An Unprecedented Look at Medical Costs Nationwide talks about The Health Care Pricing Project, which is looking at exactly that.

Researchers from Yale University, Carnegie Mellon University, and the London School of Economics examined $682 billion of healthcare bills for 88 million people from Aetna, Humana, and UnitedHealth. The study was funded by The Commonwealth Fund, National Institute for Health Care Management Foundation, and Economic and Social Research Council.

Here are some highlights from their first paper, The Price Ain’t Right? Hospital Prices and Health Spending on the Privately Insured:

  • “If you happen to live in an area with only one hospital you are going to pay more.”
  • “After decades of mergers, nearly a third of US markets have monopolies, or are close to having monopolies.”
  • Variation in provider price drives spending differences across Hospital Referral Regions for employer-sponsored insurance. Variation in quantity of care provided drives spending differences in Medicare.
  • Prices vary widely across the nation and significantly even within Hospital Referral Regions.

How does the variation in prices of health care services and it's influence on spending levels across the nation impact your organization?


Tags: health insurance, Healthcare, ACA, insurance companies, medicare, medical insurance





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