ACA Exchanges

Public Coverage Is Up, Private Coverage Is Down — Yet Likely Not for Long

The uninsured rate dipped slightly between 2020 and 2021, and while private insurance continued to be the most common type of coverage, it decreased in prevalence while government coverage increased, according to new data from the U.S. Census Bureau. One Wall Street analyst suggests that the findings are unsurprising given the current policy and demographic landscape, but he notes that trends are poised to change considerably when millions cease to qualify for Medicaid.

The Census Bureau’s survey, conducted between February and April, asked individuals whether they had any type of health coverage in the past calendar year. In 2021, 8.3% of the U.S. population lacked health insurance, compared to 8.6% in 2020. Put another way, 27.2 million Americans did not have coverage last year, down from 28.3 million the year prior. The 2021 uninsured rate of 8.3% represented a small uptick compared to 2019, however, when it reached a low of 8.0%.

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Three Major Insurers Will Expand ACA Exchange Footprints in 2023

Galvanized by a growing, stable Affordable Care Act exchange market and a looming dropoff in Medicaid membership, some of the country’s largest health insurers in 2023 are once again expanding their ACA marketplace footprints. At the same time, two startup insurers are pulling out of select markets — although one policy expert tells AIS Health that those moves mainly reflect how difficult it is to compete against companies with dominant market shares.

Katherine Hempstead, senior policy adviser at the Robert Wood Johnson Foundation, says significant enrollment growth in Southern states appears to be driving some insurers’ expansion moves this year.

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Major National Health Insurers Expand ACA Presence in 2023

Cigna Corp. will expand its Affordable Care Act exchange offerings in 2023 by 50 new counties in Georgia, Mississippi and North Carolina and add three new states — Texas, Indiana and South Carolina — the insurer said in August. If approved by the state regulators, Cigna’s market expansion has the potential to reach roughly 730,000 additional enrollees. The carrier has been expanding its footprint over the past few years, currently ranking 11th in national ACA enrollment with 340,000 members. Its major state markets are Tennessee (85,000 members), Virginia (62,000) and Missouri (49,000).

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Health Insurers, Feds Gear Up to Steer People to ACA Marketplaces

With a law finally passed that extends enhanced Affordable Care Act subsidies for another three years, health insurers and government agencies can now start their consumer-outreach campaigns for the upcoming open enrollment period in earnest. But they’ll also be prepping for a bigger challenge down the road: Ensuring a smooth transition for people who will no longer be covered by Medicaid after the COVID-19 public health emergency (PHE) ends.

To that end, the Biden administration on Aug. 30 rolled out a plan called the “Assister Strategy to Support Medicaid Unwinding.” As part of that plan, HHS said it’s allocating $100 million to Navigator grantee organizations for the 2022-2023 budget period as well as reviving the Enrollment Assistance Program (EAP), which established temporary storefronts and labor forces that the Obama administration used in the ACA marketplaces’ early years to supplement Navigators’ outreach efforts. For the new version of the EAP, the Biden administration will deploy “mobile assisters” across population centers identified by HHS.

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ICHRAs Begin to Gain Traction With Health Plan Purchasers

Employers are beginning to see the value of individual coverage health reimbursement arrangements (ICHRAs), managed care insiders tell AIS Health, a division of MMIT. Brokers and third-party experts say that while uptake has been slow so far, the ICHRA market could take substantive amounts of business away from both self-funded and fully insured commercial insurance books, particularly among medium-sized employers.

ICHRAs allow employers and employees to purchase Affordable Care Act marketplace plans. Employees select a plan on a health exchange or through a private broker, and their employer reimburses the member each month for a fixed amount of premium. Unlike exchange plans purchased by individuals, exchange plans purchased as part of ICHRA are not subsidized by advance premium tax credits. The market is still in its infancy: ICHRAs were created by the Trump administration in 2019, and the first policies in the segment were sold for the 2020 plan year.

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Amid Inflation, Possible Recession, Insurers Are on Strong Financial Footing

Despite worrying macroeconomic trends, health insurers have done well this year so far, with all the largest publicly traded health insurance firms posting year-over-year earnings growth in the first half of 2022. Experts tell AIS Health, a division of MMIT, that they don’t expect health insurers to struggle despite ominous signs across the economy.

Those headwinds include inflation; a possible recession, which could decimate employer-based insurance enrollment; medical cost growth; and the resumption of Medicaid eligibility redeterminations, which will force unprecedented amounts of disenrollment. But experts say that insurers with a mix of business lines should be in a strong financial position. The largest risk is likely to insurers that carry a coverage mix disproportionately focused on the commercial market.

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FTC Fines Broker for Pushing ‘Sham’ Health Insurance Plans

Benefytt Technologies, Inc., a health insurance brokerage controlled by private equity firm Madison Dearborn Partners, LLC, will refund its customers $100 million after the Federal Trade Commission (FTC) found Benefytt knowingly defrauded consumers shopping for Affordable Care Act marketplace plans. Health care experts tell AIS Health, a division of MMIT, that similar schemes involving deceptive and exploitative sales tactics are now a common problem.

The FTC said in a press release that Benefytt misrepresented bundles of short-term, limited duration (STLD) plans and supplemental health insurance products as comprehensive plans that meet the ACA’s standard benefits requirements. Benefytt’s marketing practices were misleading, the FTC said, and involved “lying to consumers about their sham health insurance plans and using deceptive lead generation websites to lure them in.” According to the FTC complaint, Benefytt also “illegally charged people exorbitant junk fees for unwanted add-on products without their permission.”

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Startup Health Insurers Oscar, Clover Signal Course Changes After 2Q

The four publicly traded startup health insurers — Oscar Health, Inc., Bright Health Group, Inc., Clover Health Investments Corp. and Alignment Healthcare, Inc. — continued to post losses in the second quarter of 2022, but two out of the four lost less money than they did in the prior-year period. Beyond their finances, however, some of the companies are making changes to their business strategies in a bid to set a stronger course for the future.

Medicare Advantage-focused Clover Health, for instance, revealed that CEO Vivek Garipalli will be replaced by Andrew Toy, the company’s current president, starting on Jan. 1, 2023. In an Aug. 8 news release, Clover said the move “is the culmination of a succession plan we’ve had in place since Andrew joined Clover as CTO and led the development of Clover Assistant,” referring to the company’s proprietary clinical decision-making tool.

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Analysts: Inflation Reduction Act Will Have Mixed Impact on Health Insurers

With the Inflation Reduction Act (IRA) now signed into law by President Joe Biden, analysts are predicting that some — but not all — of its health care provisions will be a boon for the managed care industry.

In a new report, insurance industry-focused credit rating firm A.M. Best noted that insurers estimated 2 million to 3 million people would drop their Affordable Care Act exchange policies if enhanced subsidies — which were ushered in as part of coronavirus relief legislation — expired in 2023. The IRA prevented that outcome, however, by extending subsidies for three years. The increased financial aid for enrollees both eliminated the subsidy cliff for higher earning individuals and provided access to zero-premium plans for people on the lower end of the income scale, helping drive enrollment to a record high in 2022.

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Extension of Boosted ACA Subsidies May Have Small Impact on 2023 Gross Premiums

Now that the Inflation Reduction Act (IRA) has surmounted the key hurdle of passing the Senate — and is expected to soon pass the House of Representatives as well — the Affordable Care Act exchange market is set for another late-season policy shift that could alter next year’s premium rates. However, experts tell AIS Health that the effect on carriers’ overall premium calculations won’t be as significant as the impact on consumers’ out-of-pocket insurance expenses.

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