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Large health insurers have joined the parade of startups investing more in marketing and operations to expand their geographic footprints and sell more individual coverage under the Affordable Care Act.
Anthem, the nation’s second-largest health insurer, said last week its performance has improved from last year when losses triggered a major retreat from Obamacare. So much so, Anthem last week said the number of individual customers dropped by more than 1 million to 712,000 in the second quarter compared to last year.
But Anthem executives say the insurer’s ACA individual business has stabilized enough that the operator of Blue Cross and Blue Plans in 14 states will expand in 2019 near areas where it still offers Obamacare coverage. It didn’t specify what states would see expansions, executives said in an update last week during Anthem’s second quarter earnings call.
“I think you'll see some county expansions,” Anthem CEO Gail Boudreax said of 2019 plans for the ACA’s exchanges . “But I think more focused on the areas that we've been this year. So not a major rescaling, but we are pleased with the performance.”
The decision by Anthem is the latest sign that health insurance companies are forging ahead with expansion plans despite verbal and financial attacks on Obamacare by the Trump administration. Trump regularly talks of his efforts to “gut” the ACA. Meanwhile, the Centers for Medicare & Medicaid Services at the direction of Seema Verma “slashed Obamacare outreach funding to the bone,” as the Los Angeles Times described CMS’ move earlier this month.
But insurers seem to be taking the cuts in stride. As one example, Centene plans to spend a larger amount on marketing “because the business is larger for us,” CFO Jeffrey Schwaneke , Centene’s chief financial officer told analysts on the company’s second quarter earnings call last week.
Centene is the largest player in the Obamacare business, ending the second quarter with 1.5 million marketplace health plan members, which is up from 1.08 million last year, the insurer reported last week.
“We remain very bullish about the exchange business both for ourselves and also the stability of the market,” Centene senior vice president Kevin Counihan told analysts on the company’s second-quarter earnings call last week. “So we're expecting ongoing growth in our business. We think it remains very, very stable and we're very enthusiastic about open enrollment coming up.”
This year, Centene entered Kansas, Missouri and Nevada and expanded in six other states where it already sells individual ACA policies, including markets Aetna, Humana and UnitedHealth Group scaled back or left altogether. In 2019, Centene is filing with states to expand into new states and expand offerings in areas where it already sells ACA-compliant individual coverage.
Centene executives, though, wouldn’t disclose specific markets it is planning to enter. “We will talk more about '19 in our December guidance call,” Centene CEO Michael Niedorff told analysts.
Even before Anthem and Centene talked about expansions for 2019, several smaller plans, including startups Bright Health and Oscar Health said they would be launching new health insurance products under the ACA, expanding into new markets.
Bright Health will enter Arizona and Tennessee with individual plans in 2019 on the ACA’s public exchanges after already selling ACA-compliant policies in Colorado and Alabama this year. And Oscar Health has said it will sell health insurance in six new markets, the insurer said last month.
