Best’s Market Segment Report: Having Largely Absorbed ACA Impact, U.S. Health Insurers Turn to Vertical Integration to Contain Costs
The Best’s Market Segment Report, titled, “US Health: 2018 Review & Preview,” states that despite sizable losses on Affordable Care Act (ACA) exchange business in recent years, operating performance has improved, driven by multiple years of high rate increases, combined with stability in membership. Premium growth has slowed as the large membership increases experienced in 2014 and 2015 from the exchange and Medicaid expansion have abated. The slower rate of premium growth, combined with higher earnings, has allowed risk-adjusted capitalization to improve. Still, many health plans have exited or scaled back their exposure to the exchanges due to the losses from this membership, and smaller carriers or ones heavily concentrated in this segment in particular have experienced significant negative impacts. Incremental regulatory changes targeting the ACA’s structure were implemented in 2017, with further efforts expected in 2018.
According to the report, as the rate of growth for overall medical spending continues to rise, many health insurers are partnering or acquiring capabilities to diversify their operations and support members with coordinated services, i.e., one-stop shopping opportunities.
The report also notes that average underwriting gains at non-public
To access a copy of this report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=270415.
Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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