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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 healthcare.gov 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 healthcare.gov, 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 healthinsurance.org:

  • 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

CO-OPs: a new twist on traditional insurance?

Posted by Laura McMullen on Fri, May 15, 2015

Health insurance CO-OPs (Consumer Owned and Operated Plans) are part of the Affordable Care Act. More than 400,000 people enrolled in CO-OP plans during the first open enrollment period for Obamacare, and CO-OP managers are taking steps to increase enrollment. Their plans are the lowest-cost silver plans on the exchanges in nine states after cutting rates based on their experience in the first enrollment period, according to the National Alliance of State Health CO-OPs.co-ops

There are 23 non-profit CO-OPs in 26 states and all were started with 5-year loans from the federal government. Once the loan is repaid, the CO-OP is owned jointly by the private investors and members. All of the CO-OPs are members of NASHCO, the National Alliance of State Health CO-OPs. Their purpose is to provide health insurance to individuals and small businesses that have a hard time getting coverage, particularly in markets where a single insurer is dominant. This puts CO-OPs directly in competition with many Blues plans.

Most CO-OPs contract with providers directly and supplement with leased networks that wrap around their proprietary networks while a few lease or direct contract exclusively. This mix of leased and direct-contract networks is very similar to traditional commercial health insurers.

So far, CO-OPs have chosen to differentiate themselves through care management and outreach to members instead of following the narrow network trend. “Our whole strategy has been to invest heavily in medical management because at the end of the day, we can’t make money the way we used to, which is to conservatively underwrite this population,” says Martin Hickey, MD, CEO of New Mexico-based Health Connections and board chairman of the National Alliance of Health Care CO-OPs, in AIS Health Business Daily on Jan. 6, 2015. Typical hospital readmission rates for a commercial population are between 12% and 14%. Hickey says his firm’s readmission rate has held at 6.5%, and dipped to 2.5% over the last three months.

Like all businesses, CO-OPs live and die by their balance sheets. In January 2015, the Iowa Insurance Commissioner found that CoOportunity Health, an Iowa-based health insurance company, was insolvent and requested liquidation in court. Current members were notified and encouraged to enroll with different carriers prior to February 15 to ensure continuous coverage and compliance with federal law.

Are CO-OPs part of the network landscape in your state? Do you compete with them for customers and/or providers?

 

Tags: compare networks, health insurance, narrow networks, Affordable Care Act, insurance companies, health care providers, health insurance co-ops

 

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