It has been a busy day for me, so this is just a quick note on Exchange profitability:
— Sabrina Corlette (@SabrinaCorlette) April 26, 2016
Also, Centene, the holding company for Ambetter is reporting profitability on the Exchange markets as well:
Centene (a Medicaid insurer) is achieving profit margins on its #ACA exchange plans “at the higher end of our targeted range.”
— Bob Herman (@MHbherman) April 26, 2016
What does this mean besides more hookers and blow for the C-level?
Profitability outside of California is increasingly plausible. And this makes sense. 2014 was a year where there were only guesses about both the Exchange population, the market structure, and federal policy structure (specifically the risk corridor revenue neutrality restrictions. 2015 had a bit more clarity on who was coming into the market, what was working and what was not working, and what federal policy on risk corridors would actually be. 2016 is the first year where the policies are priced on functionally decent real information and some of the amazingly dumb strategic decisions have been unwound through either course changes or through exiting the market.
As a simple reminder, competetive markets should see some companies make money and some companies that offer more expensive and less attractive products lose money. I would be extremely worried if everyone was making money after three years, just like I would be extremely worried that everyone was losing money after three years of increasingly better data.