Workers expect their defined contribution plans to play a greater role in their retirement income than annuities.
Feb. 11--Highmark Inc. is signing insurance members at a rate of more than 1,000 a day in Affordable Care Act health plans, but the company's chief executive sidestepped questions about whether the business will be profitable in the first year.
Several national insurers said last week they expect to lose money on members signed up through online marketplaces formed by states and the federal government. But Highmark CEO William Winkenwerder on Monday would say only "we don't intend to lose money."
Insurance companies have been concerned that they might lose money on Affordable Care Act plans because a majority of the people signing up have been older. Younger people are needed to offset the risk of insuring older people who tend to have more medical problems and more expensive claims. Highmark has said its enrollment has been "skewing older."
Winkenwerder, speaking to reporters at the company's Downtown headquarters, said he believes Highmark's offerings to individuals were "appropriately priced" and that the nonprofit Blue Cross Blue Shield insurer would "be able to manage the costs."
In addition to slim margins from Affordable Care Act plans, Winken-werder drew questions about the financial implications of the state's largest health insurer's pending breakup with hospital giant UPMC.
While UPMC last week said its annual revenue would drop by an estimated $500 million if it renewed a reimbursement contract with Highmark, Winken-werder said he didn't understand why UPMC would risk the loss of billions of dollars in claims Highmark pays Western Pennsylvania's biggest hospital system for treating the insurer's customers.
"We believe that there would be financial harm to them (without a contract), dislocation of patients and financial harm all around," he said. "We don't see the point in that."
To mute the potential loss of patients when the contract expires at the end of this year, UPMC has been trying to convince Highmark subscribers that they can keep in-network access to UPMC by switching insurers. After this year, UPMC Health Plan, Aetna Inc., Cigna Corp. and United Healthcare will offer full access to UPMC hospitals and doctors.
UPMC said last week that Western Pennsylvania employers are increasingly leaving Highmark or offering an alternative plan from other insurance providers alongside Highmark's.
But Highmark maintained that its share of the market for commercial insurance customers -- individuals younger than 65 and employer groups -- was 63 percent in January, unchanged from the same point last year. It also said it retained 95 percent of customers as of January and added 11,600 PNC Financial Services Group Inc. employees.
Gaining individual subscribers through Affordable Care Act plans may be buoying a possible loss of group customers. Since Oct. 1, Highmark signed up 110,000 people in plans through the federal government's Healthcare.gov marketplace and outside the exchange in Pennsylvania, Delaware and West Virginia.
The company, which is the largest health insurer in Delaware and West Virginia, declined to provide a breakdown of how many customers came from direct sales outside the exchange.
Through Jan. 1, Highmark signed up 44,685 people through Healthcare.gov in the three states, including 37,100 in Pennsylvania.
Winkenwerder said he expects the insurer to have gained between 150,000 and 200,000 members by March 31, when open enrollment under the Affordable Care Act ends for this year.
National insurers Aetna, Cigna and Humana Inc. said last week that they expect to lose money on individual policies this year because not enough young and healthy people have signed up to offset costs of older and sicker people.
As of the end of December, about a quarter of the more than 2 million enrollees nationwide were between the ages of 18-34, the federal government reported last month.
Alex Nixon is a staff writer |for Trib Total Media. He can be reached at 412-320-7928 or firstname.lastname@example.org.
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