Many Insurers Losing Money On Indiana Exchange

Roughly half of the health insurers selling on the Obamacare exchange in Indiana are losing money on that business this year, according to third-quarter financial filings with the Indiana Department of Insurance.

The viability of the Obamacare markets was called into question this month after Minnesota-based UnitedHealthcare - the nation's largest health insurer - said it was losing hundreds of millions of dollars on the exchanges this year. It expects more of the same next year.

UnitedHealthcare serves seven of the 23 states where it sells on the Obamacare exchanges via a company called All Savers Insurance Co., which is legally based in Indianapolis. All Savers has lost $119 million on its insurance operations during the first nine months of this year, according to a financial report filed this month.

Joining the Obamacare exchanges helped All Savers ramp up its premiums nearly tenfold this year, to $711.4 million during the first nine months of this year from $76.1 million during the same period last year.

Indiana was All Savers' second-biggest market for growth, pulling in $129 million in premiums so far this year, up from $12.2 million during the same period last year.

But premium growth came with too many medical claims, UnitedHealthcare officials revealed on Nov. 19.

"We have identified higher levels of individuals coming in and out of the exchange system to use medical services, lower expectations for new growth and overall future participation, declining performance in and accelerating failures of the sponsored health cooperatives, and our own emerging claims experience, which is worsening as the year end nears," said UnitedHealth CEO Stephen Hemsley during a Nov. 19 conference call with investors.

That announcement, along with the shuttering in several states of the co-op health plans created by Obamacare, caused analysts to question whether any insurer can make money on the exchanges.

"If one of the largest and presumably, by reputation and experience, the most sophisticated of the health plans out there can't make money on the exchanges, then one has to question whether the exchange as an institution is a viable enterprise," said Sheryl Skolnick, an analyst at Mizuho Securities.

At least three other insurers are feeling UnitedHealthcare's pain.

New York-based Assurant Inc. lost $84 million during just the first quarter this year on its Obamacare policies nationwide, prompting it to withdraw from the Obamacare markets across the country.

Since then, Louisville-based Humana Inc. has announced it will withdraw from the off-exchange individual market in Indiana.

Indiana University Health Plans Inc. has lost nearly $2.7 million so far this year, requiring a $5 million capital contribution from its owner, the IU Health hospital system.

MDwise Marketplace Inc. has lost nearly $615,000 during the first nine months of the year.

SIHO Insurance Services, based in Columbus, Indiana, has been losing money this year - its first offering plans on the exchange. SIHO has signed up only 536 customers via its individual health insurance policies this year, but it does not break out whether that business is making money.

Ohio-based CareSource Inc. has done well on the Indiana Obamacare exchange, posting gains of nearly $5 million so far this year.

The three other companies selling on the Obamacare exchange - Anthem, Physicians Health Plan and Managed Health Services - mix the results of that business with their other lines of business, making it hard to know if the Obamacare business is profitable.

Anthem Blue Cross and Blue Shield has said its exchange business has been profitable nationwide, although not as much as it thought it would be.