Tag Archives: Health Insurance Industry
How the ‘big 5’ payers performed financially in 2016
The five largest U.S. health insurers — Aetna, Anthem, Cigna, Humana and UnitedHealth Group — saw a range of financial results throughout the first three quarters of 2016.
The big five health insurers will report their financial results for the fourth quarter of 2016, ending Dec. 31, early next year.
Catholic Health Initiatives pulls out of insurance business
As more hospitals across the country consider launching their own health insurance plans, one big hospital operator is pulling out of the business.
Catholic Health Initiatives (CHI), a large nonprofit health system based in Colorado, no longer plans to develop a “wholly owned and nationally driven” insurance business, according to The Wall Street Journal. Instead, it’s going to sell portions of the health insurance business.
The provider, which operates 103 hospitals in 18 states, lost nearly $110 million during the last fiscal year, according to the article.
Dean Swindle, chief financial officer and president of its enterprise business lines for CHI, didn’t agree to an interview for the latest news, but told the publication in April that “it’s tough in the health plan business. You lose money. You make mistakes. You plow forward. It takes cash.”
Partners HealthCare suffers $108M in operating losses in FY 2016
Dive Brief:
- Operating revenues at Boston-based Partners HealthCare increased 7% from the previous year to $12.5 billion, but $12.6 billion in operating expenses canceled out those gains, according to the health system’s financial statements.
- The operating loss is the largest posted in the system’s 22-years of history, which has struggled financially since it acquired Neighborhood Health Plan in 2012, a Medicaid managed care subsidiary that had a $89-million operating loss two years ago.
- A nursing strike and implementation of a new EHR system also contributed to poor financial performance at Partners in fiscal year 2016, according to the Boston Herald.
Why Catholic Health is bowing out of the insurance field
http://www.healthcaredive.com/news/why-catholic-health-is-bowing-out-of-the-insurance-field/421923/
Dive Brief:
- Tired of steep losses, Catholic Health Initiatives is looking to sell its health plan subsidiary, Modern Healthcare reported.
- QualChoice Health, previously known as Prominence Health, sells Medicare Advantage and commercial plans to employers in six states.
- CHI began buying up health plans three years ago as a way to adhere to the Affordable Care Act and compete with other carriers.
Aetna/Humana-DOJ trial: Prosecutors battle over Medicare Advantage plans
Dive Brief:
- The Department of Justice (DOJ) argued against the viability of Aetna’s plans to sell off assets to counter concerns over its proposed $34 billion merger with Humana, The Wall Street Journal reports.
- Aetna had agreed to sell $117 million in assets, representing nearly 30,000 Medicare Advantage enrollees in 21 states, to Molina Healthcare.
- Federal prosecutors questioned whether Molina’s purchase of those assets be enough to sustain competition in the market for private Medicare plans in the markets where Aetna and Humana operate.
Pre-existing Conditions and Medical Underwriting in the Individual Insurance Market Prior to the ACA
Pre-existing Conditions and Medical Underwriting in the Individual Insurance Market Prior to the ACA
Before private insurance market rules in the Affordable Care Act (ACA) took effect in 2014, health insurance sold in the individual market in most states was medically underwritten.1 That means insurers evaluated the health status, health history, and other risk factors of applicants to determine whether and under what terms to issue coverage. To what extent people with pre-existing health conditions are protected is likely to be a central issue in the debate over repealing and replacing the ACA.
This brief reviews medical underwriting practices by private insurers in the individual health insurance market prior to 2014, and estimates how many American adults could face difficulty obtaining private individual market insurance if the ACA were repealed or amended and such practices resumed. We examine data from two large government surveys: The National Health Interview Survey (NHIS) and the Behavioral Risk Factor Surveillance System (BRFSS), both of which can be used to estimate rates of various health conditions (NHIS at the national level and BRFSS at the state level). We consulted field underwriting manuals used in the individual market prior to passage of the ACA as a reference for commonly declinable conditions.
Cartoon – Health Reform
Cost, Not Choice, Is Top Concern of Health Insurance Customers
It is all about the price.
Millions of people buying insurance in the marketplaces created by the federal health care law have one feature in mind. It is not finding a favorite doctor, or even a trusted company. It is how much — or, more precisely, how little — they can pay in premiums each month.
And for many of them, especially those who are healthy, all the prices are too high.
The unexpected laser focus on price has contributed to hundreds of millions of dollars in losses among the country’s top insurers, as fewer healthy people than expected have signed up. And that has created two vexing questions: Will the major insurance companies stay in the marketplaces? And if they do, will the public have a wide array of plans to choose from — a central tenet of the 2010 Affordable Care Act?
“The marketplace has been and continues to be unsustainable,” said Joseph R. Swedish, chief executive of Anthem, one of the nation’s largest insurers.
Most Americans with health insurance get it through their employers or from government programs like Medicare and Medicaid. The marketplaces were created under the health care law to give the millions of people not covered in those ways a way to buy health plans.
While major insurers continue to make profits over all, they say that the economics of the marketplaces do not work for them. Insurers can offer marketplace plans at four different coverage tiers, and the government subsidizes the premiums for millions of people. The thinking was that enough healthy people would buy insurance to balance out the costs for the not-so-healthy.
But things are not going exactly as envisioned.
The Future of Health Care Mergers Under Trump
Though there has been a flurry of merger and acquisition activity in recent years, industry experts are unsure whether the merger momentum will continue under President-elect Donald Trump’s administration, according to The New York Times.
Here are five things to know about how M&A activity in the healthcare industry may be affected under the Trump administration.
1. President-elect Trump nominated Sen. Jeff Sessions (R-Ala.) to replace Attorney General Loretta Lynch. While it is unclear how the department will handle antitrust cases under Sen. Sessions, the impact from the change in leadership will not be felt immediately. The outcomes of the two major antitrust cases in the insurance market, the Anthem-Cigna and Aetna-Humana mergers, are expected to be decided before Mr. Trump takes office in January. However, the new administration might still have an impact on the mergers, particularly if either the companies or the government decide to appeal the decision, according to the article.
2. According to the article, there is little expectation the Department of Justice under President-elect Trump would drop the cases if the insurers lost and appealed. However, any agreed upon settlement deal may be less onerous to the insurers involved.
3. There is a chance the federal government’s approach to healthcare mergers may not change, according to the article. “There is a history of bipartisan support for antitrust enforcement in healthcare,” said Leslie Overton, a partner at Alston & Bird and a former DOJ official. “I don’t think we should expect a wholesale shift, based on the change from Democratic to Republican.”
4. The Federal Trade Commission’s position on M&A activity may change even less, according to industry experts interviewed by The New York Times. The independent agency is less subject to the political preferences of the president and of Congress.
5. Industry experts also suggest the possible repeal of the ACA will not impede the increasing M&A activity of the past few years. According to the article, hospitals may feel more pressure to join together if the ACA is repealed due to reduced Medicare and Medicaid payments and increased volumes of uninsured patients.
HENRY KOTULA 