There has been consternation over whether the possible withdrawal of health insurance giant UnitedHealthcare from the Affordable Care Act exchanges spells doom for the online marketplaces. Added to that has been worry that the failure of 12 of the 23 non-profit CO-OPs set up under the ACA with government funding will limit competition.
But an Urban Institute/Robert Wood Johnson Foundation (RWJF) study concludes those events are not so ominous for the success of the ACA. In fact, United, the nation’s largest health insurer, and the Consumer Operated and Oriented Plans “have not been major players in many markets and their exits will not be overly disruptive," it says.
United Health Group Inc., the parent company of UnitedHealthcare, said it lost about $475 million on ACA policies in 2015 and expects to lose at least $500 million in 2016. The company has said it may quit the program in 2017.
Nevertheless, Blue Cross-affiliated insurers, managed care plans that previously served the Medicaid population and provider-sponsored plans are increasingly dominating the competition in the exchanges, the report said.
The more serious concerns for the exchange markets are “affordability, network adequacy, outreach and enrollment funding, sufficiency of risk adjustment, and possible adverse selection against the nongroup market as a whole during special enrollment periods,” the report said.
However, Kathy Hempstead, who directs coverage issues at the RWJF, said that insurers are making their plans more economically viable by moving to narrower, lower-cost provider networks. And the Department of Health and Human Services also has limited insurer losses by reducing the number of special enrollment periods in which people can sign up outside of the normal enrollment periods. Health plans have complained that people enrolling during the special enrollment periods have proved to have higher medical claims than people enrolling during the normal enrollment period.
“My expectation is that there will not be the same kind of losses in 2016” as there were in 2015, Hempstead said. “Will it be a garden party? I’m not saying that, but I think it’s going to be better.”
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