Aug. 19--Not only is Obamacare far from dead, it's profitable and attracting more private insurance companies.
Two more companies are seeking to enter Florida's Affordable Care Act health insurance exchanges in 2020, and unlike in previous years, returning companies are not seeking large premium hikes.
The new applicants are Bright Health Insurance Co. of Florida and Cigna Health and Life Insurance Co.
They're likely sniffing opportunity in Florida, said Allan Baumgarten, an independent health market analyst who publishes Florida Health Market Review every two years.
In February, Florida had 1.67 million Obamacare enrollees -- an increase of 73,329 over the previous year -- while overall enrollment declined in the 38 other states that use the federal exchange. About 800,000 enrollees live in Broward, Miami-Dade and Palm Beach counties, according to data from the Centers for Medicare & Medicaid Services.
"I think they see Florida has been probably the poster child for enrollment in marketplace products and that companies like [Florida Blue] have been very successful," Baumgarten said. "Maybe they think there's a piece of that they'd like to keep for themselves."
In all, 10 companies are seeking approval in Florida to offer products that meet the requirements of the Affordable Care Act, according to a statement by the Florida Office of Insurance Regulation.
Of them, nine companies want to sell on the federal exchange in Florida, which would make their plans eligible for financial assistance for low-income policyholders. Last year, seven companies were approved to sell on the exchange.
Returning companies are seeking rate increases that average 1.2 percent overall, according to state regulators. That's far less than the 8.8 percent sought for 2019 and the 17.8 percent requested for 2018.
Insurers offering Obamacare plans enjoyed increased profits in 2018 and are continuing to make money so far in 2019 as costs have leveled off, according to a June 27 report by the Kaiser Family Foundation. The market has remained stable despite the Trump administration's decision in 2017 to stop directly reimbursing insurers for cost sharing reductions and Congress' elimination, effective this year, of the tax penalty for failing to carry insurance.
But uncertainty remains. All eyes are on the appeal of a December 2018 Texas district court ruling the entire Affordable Care Act is unconstitutional. If the ruling is not reversed, the law would be invalidated and the $55 billion in federal subsidies and tax credits that keep plans affordable for low-income policyholders would likely disappear, Baumgarten said.
A final ruling likely won't happen before 2020, meaning consumers will still be able to buy coverage for 2020 during the next open enrollment, which runs Nov. 1 to Dec. 15.
Florida is among seven states that Minnesota-based Bright Health, founded in 2016, wants to enter next year. Currently the company offers plans in just six states.
Bright Health is proposing to offer plans in Jacksonville, Pensacola, Orlando, Daytona Beach, Tampa and Palm Beach, but not Miami-Dade or Broward counties, according to a company spokesman.
He declined to say why Miami-Dade and Broward were excluded from the company's expansion plan.
Bright Health is a narrow network insurer, Baumgarten said. Narrow network insurers thrive by partnering with smaller provider networks to control costs and keep premiums affordable. The company has grown rapidly by limiting its offerings to individual plans and Medicare Advantage plans while avoiding the large employer group market "which tends to want broad networks with lots of choices of providers," he said.
Addie Blanchard, who studies the Florida health care market for Decision Resources Group, said that Bright Health might be testing South Florida' market by limiting its coverage to Palm Beach County and partnering with a local provider network there. The company might have decided that entering Broward and Miami-Dade -- where Florida Blue dominates -- would be too much to take on right away, Blanchard said.
Cigna, which offered Obamacare plans when the exchanges were first created in 2014, pulled out of Florida after 2015. At the time, the company blamed high costs stemming from fraudulent claims, largely from substance abuse clinics and labs.
Cigna has not yet announced which Florida markets it wants to enter, nor has it given any assurances it will follow through on its proposal to compete on the federal exchange in the state.
Asked about its plans, spokeswoman Holly Fussell said by email that the company is "working closely with regulators to ensure that our plans and rates offer a competitive, sustainable combination of quality and affordability with a focus on whole person health."
She added the company will "be happy to discuss our participation" after state regulators approve proposed plans and rates, which typically takes place before Sept. 30.
Blanchard noted that Cigna recently began offering Medicare Advantage plans in the Orlando market. With an existing provider network there, the company could be using the region as a foothold to re-enter Florida's Obamacare market, she said.
Just three of the seven companies planning to return to Florida's Obamacare exchange offered plans in the tri-county region in 2018 -- market leader Florida Blue, with a wide range of plans, and narrow network insurers Molina Healthcare and Ambetter, owned by Centene.
It's not yet clear whether all three will again offer plans in the tri-county region in 2020. Proposals submitted to state insurance regulators in June in most cases exclude from public access details such as where the companies want to offer insurance plans. Insurers don't have to finalize those decisions until just before open enrollment begins on Nov. 1.
Florida Blue has consistently offered plans in all 67 Florida counties, while Centene this month announced plans to expand to additional territories in Florida and nine other states. Molina's CEO Joseph Zubretsky told investors in late July that its costs had stabilized and that the company was optimistic about its ability to remain profitable in the ACA market.
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