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Some Health Insurers Find Profitability in New ACA Marketplace

Some health insurers are seeing strong first-quarter profits in the Affordable Care Act (ACA) exchange business and are considering expanding.
May 21, 2018

Amid ongoing turmoil in the individual markets, some health insurers are seeing strong first-quarter profits in the Affordable Care Act (ACA) exchange business and are considering expanding into the ACA markets next year. Timothy Jost, emeritus professor, Washington and Lee University School of Law, observes, “The insurers that are making it are insurers who have figured out this market. They have tight networks and do things for people with chronic conditions.”

Cigna, Centene, Molina Healthcare, and Anthem all reported improved first-quarter profits for 2018 in their individual business that includes the ACA. Health insurers also are benefiting from the reduction in the corporate tax rate. However, decreasing enrollment in the ACA exchanges is unsustainable and could get worse next year. Maryland, for example, has seen its marketplace numbers fall from 243,000 last year to just 211,000 in 2018, a drop of 13 percent, according to Maryland Insurance Commissioner Al Redmer, Jr.

Best’s News Service reports that so far, insurers have shown little interest in participating in the ACA alternatives, like association plans or the expanded 12-month short-term coverage. “We believe that association health plans are the wrong way to achieve these goals due to the risks of fraud and insolvency they pose to consumers,” America’s Health Insurance Plans (AHIP) said in a comment letter to the U.S. Department of Labor. “We further believe that creating a different set of rules for different market actors will disturb insurance markets in a way that runs counter to DOL’s stated objectives.”

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