Insurers Predict Stable 2018 Obamacare Marketplace
Health insurers that continue to sell individual coverage under the Affordable Care Act are forecasting a stable market on public exchanges this year after a rocky 2017 that had the law under attack.
Molina Healthcare was the latest major health insurer to report its fourth quarter 2017 earnings and its outlook for Obamacare for 2018 touting improving margins, better cost management and more calm political waters.
“With respect to the marketplace, we have taken significant actions to improve performance in 2018,” Molina CEO Joseph Zubretsky told analysts earlier this week.
Molina exited Utah and Wisconsin this year and its ACA marketplace enrollment is expected to drop to 303,000 by the end of this year, but the insurer remains in several other states. Molina increased premiums 59% effective Jan. 1 and those increases included a “20% increase for the absence of federal funding of (cost-sharing reduction) subsidies,” Zubretsky said.
President Donald Trump ended the cost-sharing subsidies last year and Congress has yet to fund them. Cost-sharing reductions (CSRs) help purchasers of subsidized silver plans with their co-payments and deductibles. Trump’s decision last fall ended funding that had been disbursed on a month-to-month basis.
But even without the CSR funding, insurers are reporting improved margins. Cigna, Centene and Anthem have said they expect margins to improve in 2018 .
Cigna, for example, is turning a profit on its individual business even after gaining customers from insurers like Aetna, Humana and UnitedHealth Group – three plans that left the ACA’s exchanges after they couldn’t effectively manage the costs of sick patients buying individual policies.
Cigna was able to effectively manage Obamacare patients in 2017 even after its individual business that includes business on the ACA’s public exchanges grew by 77% to 297,000 health plan enrollees. Cigna chief financial officer Eric Palmer earlier this month said the health plan’s overall medical cost-ration, or MCR “reflects better-than-expected medical costs in our U.S. individual business, which generated a small profit in 2017.”