Big Insurers Pushed to Join ACA Marketplace

Study authors say the nation’s largest insurance companies should be required to offer coverage in ACA marketplaces in the same geographic areas where they participate in Medicaid and Medicare.

Medicare and Medicaid accounted for 59% of healthcare revenues reported by the nation's five largest commercial health insurance companies in 2016, according to a study released Monday in Health Affairs.

The $213.1 billion collected by UnitedHealthCare, Anthem, Aetna, Cigna, Humana last year is more than double the $92.5 billion the five insurance giants collected when the Affordable Care Act was passed in 2010, according to the study, which was funded by the Commonwealth Fund.  

Cathy Schoen, lead author of the study and a senior scholar at the New York Academy of Medicine, said the insurers have pulled out of state ACA marketplaces, even as they continue to enroll people in non-ACA government-sponsored coverage in those same states.

Schoen said policymakers should require insurers offer coverage in the marketplaces if they participate in Medicaid and Medicare in the same geographic area. Nevada and New York have such requirements for Medicaid plans.

"Many states' ACA marketplaces are facing uncertainty about insurer participation and have fewer choices for consumers, as some insurers have left the markets," Schoen said in a media release accompanying the study.

"At the same time, some of these companies have thrived from growth in public coverage in those same states. Requiring insurers that participate in Medicaid and Medicare to offer marketplace coverage could help shore up those state markets," she said.

The study finds that, following the ACA’s passage, the number of enrollees with public coverage grew faster than the number with private coverage in all five companies.

Between 2010 and 2016, Medicaid and Medicare enrollment in the five companies doubled, from 12.8 million to 25.5 million; Medicaid enrollment increased from 7 million to 15 million. Collectively, the five insurers participate in 31 state Medicaid programs and in at least some regions of most states.

Kristine Grow, spokeswoman for America's Health Insurance Plans, said the insurance industry "continues to recommend policy solutions to ensure affordability and choice in the individual market."

"Regardless of the uncertainty of the past year, insurance providers worked hard with state leaders to ensure that every American who buys their own coverage has a plan available for them on the exchange for 2018," Grow said.

"The best way to encourage health plans to participate in future years is to ensure the individual market is stable, so that plans can offer Americans coverage options they value and find affordable," she said.

The study also found that:

• The top five commercial carriers enroll 43% of the country’s insured population, or 125 million people.
   
• Membership in the five companies grew by a total of 23 million people from 2010 to 2016. That increase was more than double the increase for the five years leading up to passage of the ACA (2005–2010).

"These findings are an important reminder that despite reporting losses in the Affordable Care Act marketplaces, the nation’s biggest insurance companies generated substantial revenues thanks to Medicare and Medicaid," said Commonwealth Fund President David Blumenthal, MD.

"This growing dependence on taxpayer-funded insurance programs suggests there are opportunities to improve access to health care and stabilize insurance markets if insurers that participate in these programs also offer plans in the ACA marketplaces," he said.