Insurers' ACA profits hold strong in Q1
Small insurers, such as Centene and Oscar Health, have benefited from larger insurers significantly reducing the number of ACA plans they’re offering.
A number of insurers are reporting strong profits from their Obamacare health plans.
Last week, Molina CEO Joe Zubretsky reported to investors that the insurer’s profits in the first quarter “exceeded expectations.”
Nevertheless, Zubretsky acknowledged that the future of the Affordable Care Act market is uncertain and that the insurer is taking a cautious approach to future ACA business.
Bruce Jepsen, a health policy analyst, argues that Molina and other small insurers, such as Centene and Oscar Health, have benefited from larger insurers, such as Anthem and Aetna, significantly reducing the number of ACA plans they’re offering.
Related: ACA insurers turn to ‘silver-loading’
Granted, Molina has reduced its presence in the ACA marketplace as well. It now has 450,000 customers, down from roughly a million in 2017.
Other insurers have done the opposite, betting that the void created in some markets by the departure of major insurers will create an opportunity for smaller players to attract a lot of business.
In fact, at least one insurer that has experienced success in the ACA business owes its entire existence to the major companies abandoning the marketplace. Bright Health, founded by former UnitedHealth CEO Bob Sheehy, began selling plans in Colorado after UnitedHealth and Humana announced that they would abandon the state-run ACA exchange in 2017.
Similarly, Centene reported strong profits after expanding its ACA business into a number of new markets, including three new states. It grew its ACA membership by 35 percent, to 1.6 million members.
Insurers that have reduced their ACA business or abandoned it entirely are still doing well. After all, the ACA 11-million member marketplace only represents a small fraction of the overall health insurance market.
UnitedHealth and Anthem posted strong numbers for the first quarter of 2018. Some other big insurers, such as Aetna and Humana, have not yet reported their first quarter results but reported very strong numbers for the last quarter of 2017.