AM BestTV: Health Insurers See Strong Results, Accommodate ACA

In this ^AMBestTV episode, Sally Rosen, senior director, Doniella Pliss, director and Jason Hopper, associate director, all of AM Best, said U.S. health insurers have continued to adapt to changes brought about from the Patient Protection and Affordable Care Act (ACA) and its modifications. Click on http://www.ambest.com/v.asp?v=aca919 to view the entire program.

The ACA has been a political lightning rod from its beginning; however, with a new enrollment period set to begin, the health insurance industry is now seeing its highest underwriting results and net income levels since the law’s implementation.

“A majority of companies AM Best speaks with feel relatively optimistic about this block of business, since it has been a very good source of profitability over the past two years,” said Pliss. “Going forward, companies expect earnings to moderate, but remain profitable. Even if there is a change implemented, as far as eligibility or government subsidies, the insurers are pretty optimistic that it would not be immediate, and the business can still be flexible and profitable.”

Hopper highlighted the challenges insurers have weathered due to the attempts to repeal or replace the ACA.

“I think the main thing that companies are looking for is stability and certainty. That has not been the case in the health insurance industry,” he said. “I think most eyes at this time are watching the case that went through Texas, whereby a judge struck down the individual mandate of the ACA, and therefore, the entire law should be stricken down as well. Ultimately, we expect this to move up to the U.S. Supreme Court. We will see how this plays out.”

Rosen said that while AM Best expects the Trump administration to continue to try and chip away at the law, a new repeal-and-replace effort is unlikely in the near term.

“We are seeing more actions by the state regulators, and we are starting to go back to pre-ACA market conditions, with the different legislation and different rules by the states,” she said. “However, we do not foresee any repeal and replace at this point given that we are going into an election year.”

To access a copy of this market segment report, titled, “The ACA Five Years On: Early Struggles Give Way to Strong Performance for U.S. Health Insurers,” visit http://www3.ambest.com/bestweek/purchase.asp?record_code=289753.

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