Insurers shift strategies amid challenges of exchange market
Now that the Affordable Care Act's third open enrollment period has begun, a clearer picture of how health insurers are adjusting to the seismic changes in individual market has emerged.
Aetna, for example, plans to roll out a suite of recalibrated exchange plans that it calls "Leap," which will feature new customer support staff, limited networks and a new claims-processing platform, according to the Wall Street Journal.
In a call last week to discuss the insurer's third-quarter earnings, Aetna CEO Mark Bertolini offered cautious optimism about the company's exchange business. "We think it's way too early to call it quits on the ACA and on the exchanges," he said. "We still view it as a big opportunity for the company."
Along similar lines, Anthem CEO Joseph Swedish told investors recently that he remains optimistic that there will ultimately be "stabilization and rationality in pricing" on the exchanges, though he did express disappointment with the insurer's near-term enrollment figure.
While the ACA has helped expand health insurers' overall revenue, many lost money in the individual market once the ACA took effect, according to a recent analysis of public data from McKinsey & Co. Payers lost $2.5 billion in that market in 2014 after reinsurance and risk adjustment, the report states.
To adjust, many insurers are altering their plan offerings, the WSJ notes. One example is multi-state Blues plan operator Health Care Service Corp., which will stop offering PPO plans entirely Texas. In all, the number of plans available on the federal marketplace will decrease by as much as 12 percent this year, CNBC reports, as well as a 40 percent reduction in the number of PPO plans.
Yet Cigna expects to enroll many more individuals through the exchange in Tennessee and offer more competitive pricing now that the state's consumer owned and operated plan has shut down, The Tennessean reports. And UnitedHealth said in its Q3 earnings report that the country's largest insurer will expand to 11 new public exchange markets in 2016.
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