Health insurers fled the Affordable Care Act in the early years of the law, fearing that losses from covering too many sick people would eat away at their profits.
What We Know:
- Insurers increasingly view Obamacare as beneficial while job-based health coverage faces its biggest threat yet in a crashing economy.
- According to Politico, since there are tens of millions of people losing their jobs — and their health benefits — along with major cuts to Medicaid, the insurers see stability and the promise of enough healthy enrollees in a marketplace that offers government subsidized private insurance to millions of Americans during a pandemic.
- United Healthcare, the nation’s biggest insurer, said it’s re-entering Maryland’s Obamacare market and planning other expansions after abandoning 34 states’ ACA exchanges since 2016. Anthem and Cigna have also made moves over the past two years.
- A recent study from the Kaiser Family Foundation found insurers serving Obamacare patients saw continued profits last year, and that there were no signs that the elimination of the law’s individual mandate, which took effect in 2019, led to a widespread exodus of healthy customers.
- “This business is as vital and viable as it’s ever been,” Centene CEO Michael Neidorff told investors, referring to the overall health insurance market, when he raised the company’s revenue forecast for this year, even with unemployment reaching levels not seen since the Great Depression. The company started out as a niche player administering Medicaid benefits and has gradually expanded into Obamacare.
- The insurers’ strategies mark a major turning point after years of volatility for the law — and a further sign of how ACA marketplaces continue to grow and serve more people while Republicans and the Trump administration press a federal lawsuit that could end the program.
- The clash between politics and the health care realities becomes more stark during the pandemic, some industry watchers see an added incentive for insurers to go all in backing the law in anticipation of a Democrat winning the White House this fall.
- Nearly 27 million Americans could lose their job-based overage due to the pandemic, according to Kaiser. Few will be able to sign up temporary workplace insurance, known as COBRA plans, which is costly without employer subsidies that typically cover the lion’s share of monthly premiums. This means that the Obamacare markets or Medicaid, which may not be available to many of the poor in the 14 states that have not expanded the programs under the health law, and will likely face cuts as states tighten budgets in response to the crisis.
- The insurers are portraying Obamacare as a safe harbor as economic fallout from the pandemic threatens job-based health plans that drive their biggest profits.
“In the coming months, millions of individuals are expected to turn to the ACA exchanges in order to secure coverage,” the lobby group America’s Health Insurance Plans told the Supreme Court.
