Three quick healthcare things this morning as I am drinking my coffee and hoping that my little guy’s asthma attack recedes after the nebulizer treatment is done so we both can get some sleep:
SUNDAY IS DEADLINE DAY TO SIGN UP FOR AN EXCHANGE POLICY DURING OPEN ENROLLMENT
CMS is indicating that there will be no extra time added to open enrollment. From what I am seeing, the numbers aren’t swamping the system, so I think they’ll follow through with closing the gate on Monday morning. So if you need insurance, get you act together and get it done today!
Some carriers are profitable
Charles Gaba does a fine job of assembling a collection of links that show some insurers on the Exchange were profitable in 2015. The insurers that did well were ones that had relatively low provider payment rates (either as narrow networks or as Medicaid managed care groups paying rates that bump on Medicaid rates instead of Medicare rates) and were priced well enough to get a good number of healthy people into their pool. They also tended to be fairly sophisticated to manage the administratively complex risk adjustment process.
“Unlike other insurers, Anthem said [the ACA exchange] business has been profitable”.
Anthem was holding around 9% of all ACA exchange enrollees at the end of the year, very similar to UHC’s 8%. Both companies are massive, multi-state behemoths with a similar presence on the exchanges.
Yet for all of UHC’s constant griping, rival Anthem somehow managed to make a profit….There’s 16 different carriers on the NY exchange (there were 17 until the NY Health Republic Co-Op went kaput), which means that 4 of them made money, although it doesn’t specify which of the four did so, or whether they just barely broke even or what.
So there is significant learning by doing that the old way of doing business in the individual market (relabeling a commercial product and screening out all the sick people) does not work, and that customizing a business model for a new market segment is needed. Competition is a bitch.
Finally, I saw this tweet from North Carolina:
BX of NC cutting comp to $0: Can I charge a fee? Surprising answer: https://t.co/fui2RDL7zP
— insureblog (@insureblog) January 28, 2016
Insurers have been either decreasing their agent commissions or dropping them entirely. One of the main motivating factors has been that this is a good risk management strategy in the short term. If insurers were seeing the initial risk pool look very sick and each new member signed up was sicker than initially projected, stopping a stream of enrollments via brokers is a loss minimization function.
However, I am seeing news that brokers are getting commission cuts even from insurers that aren’t losing money. At some point, I have to wonder if the creation of fairly standardized and mostly comparable products with increasingly transparent pricing on a functional website is cutting the brokers value proposition. Brokers were supposed to be able to negotiate a good deal and handle a maze of paperwork and unseen hazards for individual insurance shoppers. The exchanges have reduced the complexity of buying insurance significantly, so are the brokers getting disintermediated?