Key drivers of financial performance of insurers in the Affordable Care Act market exchange

2019 ◽  
Vol 33 (3) ◽  
pp. 130-135
Author(s):  
Michael McCue ◽  
Mark A Hall ◽  
Jennifer Palazzolo
Keyword(s):  
Financial Performance ◽  
Affordable Care Act ◽  
Market Exchange ◽  
Loss Ratio ◽  
Publicly Traded ◽  
Publicly Traded Companies ◽  
Medicaid Population ◽  
Individual Market ◽  
The Affordable Care Act ◽  
Medical Loss Ratio

While most publicly-traded insurers have experienced losses and exited the Affordable Care Act individual insurance market exchange, insurers specializing in Medicaid managed care have been profitable in this market. Accessing individual market data, this study compares the financial performance of 20 state insurers owned by two publicly-traded companies that historically focused on insuring Medicaid members compared to 40 insurers owned by other publicly-traded companies. Medicaid-focused insurers incurred a significantly lower medical loss ratio of 83.3% compared to the medical loss ratio of 93.7% of other publicly-traded insurers, and they earned a significantly higher profit margin of 4.6% compared to the operating loss of 6.5% incurred by other publicly-traded insurers. This superior financial performance of Medicaid-focused insurers could be due to one or a combination of: their care management experience with the Medicaid population, other cost reducing strategies such as provider contracting, or the enrollment of a healthier than average population.

scholarly journals Regulating Markups in US Health Insurance

2019 ◽  
Vol 11 (4) ◽  
pp. 71-104 ◽  
Author(s):  
Steve Cicala ◽  
Ethan M. J. Lieber ◽  
Victoria Marone
Keyword(s):  
Health Insurance ◽  
Affordable Care Act ◽  
Natural Experiment ◽  
Loss Ratio ◽  
Profit Margins ◽  
Medical Claims ◽  
Commercial Markets ◽  
Individual Market ◽  
The Individual ◽  
Medical Loss Ratio

A health insurer's Medical Loss Ratio (MLR) is the share of premiums spent on medical claims, or the inverse markup over average claims cost. The Affordable Care Act introduced minimum MLR provisions for all health insurance sold in fully insured commercial markets, thereby capping insurer profit margins, but not levels. While intended to reduce premiums, we show this rule creates incentives to increase costs. Using variation created by the rule's introduction as a natural experiment, we find medical claims rose nearly one-for-one with distance below the regulatory threshold: 7 percent in the individual market and 2 percent in the group market. Premiums were unaffected. (JEL G22, H51, I13, I18)

Financial Performance of Health Insurers: State-Run Versus Federal-Run Exchanges

2017 ◽  
Vol 75 (3) ◽  
pp. 384-393 ◽  
Author(s):  
Mark A. Hall ◽  
Michael J. McCue ◽  
Jennifer R. Palazzolo
Keyword(s):  
Financial Performance ◽  
Affordable Care Act ◽  
First Year ◽  
Policy Makers ◽  
Administrative Costs ◽  
Individual Market ◽  
The Difference ◽  
The Individual ◽  
Financial Losses ◽  
Health Insurers

Many insurers incurred financial losses in individual markets for health insurance during 2014, the first year of Affordable Care Act mandated changes. This analysis looks at key financial ratios of insurers to compare profitability in 2014 and 2013, identify factors driving financial performance, and contrast the financial performance of health insurers operating in state-run exchanges versus the federal exchange. Overall, the median loss of sampled insurers was −3.9%, no greater than their loss in 2013. Reduced administrative costs offset increases in medical losses. Insurers performed better in states with state-run exchanges than insurers in states using the federal exchange in 2014. Medical loss ratios are the underlying driver more than administrative costs in the difference in performance between states with federal versus state-run exchanges. Policy makers looking to improve the financial performance of the individual market should focus on features that differentiate the markets associated with state-run versus federal exchanges.

scholarly journals Relevance Of Devidend Policy As The Mediation On The Relationship Between Financial Performance and Debt On Share Prices

2021 ◽  
Vol 7 (1) ◽  
pp. 180-192
Author(s):  
Irma Tyasari ◽  
Supami Wahyu Setiyowati
Keyword(s):  
Financial Performance ◽  
Stock Prices ◽  
Dividend Policy ◽  
Share Price ◽  
Publicly Traded ◽  
Publicly Traded Companies ◽  
Share Prices ◽  
Correlational Research ◽  
Analysis Technique ◽  
The Relationship

The investors place great importance on the share price of publicly traded companies since it may reflect the company’s value. The research objective is to examine the relationship between financial performance and debt at share prices through dividend policy. The method of the research used is quantitative and correlational research. The data analysis technique is the use of smart PLS. The results of the study explain that financial performance has a positive effect on stock prices in the mediation of dividend policy. Debt negatively affects share price mediated by dividend policy. The implication of the study is that companies should consider the benefits as well as risks of borrowing funds from third parties. Investors and potential investors before investing their money in stocks must pay attention to financial performance, corporate debt and dividend policy so that they do not experience losses in their investment.

scholarly journals Sources of Success in California's Individual Marketplace under the Affordable Care Act

2019 ◽  
Vol 44 (4) ◽  
pp. 679-706
Author(s):  
Petra W. Rasmussen ◽  
Gerald F. Kominski
Keyword(s):  
Affordable Care Act ◽  
The United States ◽  
Community Partners ◽  
Early Adoption ◽  
Individual Market ◽  
The Affordable Care Act ◽  
The Law ◽  
The Stability ◽  
The Individual ◽  
Trump Administration

Abstract When passed in 2010, the Affordable Care Act (ACA) became the greatest piece of health care reform in the United States since the creation of Medicare and Medicaid. In the 9 years since its passage, the law has ushered in a drastic decrease in the number of uninsured Americans and has encouraged delivery system innovation. However, the ACA has not been uniformly embraced, and states differ in their implementation of the law and in their individual health insurance marketplace's successfulness. Furthermore, under the Trump administration the law's future and the stability of the individual market have been uncertain. Throughout, however, California has been a leader. Today, the state's marketplace, known as Covered California, offers comprehensive, standardized health plans to over 1.3 million consumers. California's success with the ACA is largely attributable to its historical receptiveness to health reform; its early adoption of the law; its decision to have Covered California operate as an active purchaser, help shape the plans sold through the marketplace, and design a consumer-friendly enrollment experience; its engagement with stakeholders and community partners to encourage enrollment; and Covered California's commitment to continually innovate, improve, and anticipate the needs of the individual market as the law moves forward.

scholarly journals Customer experience quality surpasses NPS in correlation to financial performance, customer loyalty and customer satisfaction

2020 ◽  
Author(s):  
Michele Bennett ◽  
Anthony Molisani
Keyword(s):  
Customer Satisfaction ◽  
Financial Performance ◽  
Customer Loyalty ◽  
Customer Experience ◽  
Strongly Correlated ◽  
Business Growth ◽  
Publicly Traded ◽  
Publicly Traded Companies ◽  
Important Measure

Customer loyalty and satisfaction drives business. For over a decade, NPS has been touted as the most important measure of loyalty and predictor of business growth, even as researchers have struggled to consistently prove the claim. Other measures of customer experience, loyalty and satisfaction have arisen that challenge the supremacy of NPS, even as hundreds of companies rely on NPS for its simplicity and promise of business growth. Measuring 1605 US-based customers of US publicly traded companies, this study has found that while NPS was positively and significantly correlated with customer loyalty, satisfaction, and financial performance, customer experience quality (CEQ) surpassed NPS in all three measures. The research also showed that CEQ was strongly correlated with NPS, suggesting that the two metrics are synergistic. The findings demonstrate that there is provable value in exploring metrics beyond NPS that companies may be missing and thereby limiting their growth and competitiveness.

Accounting-Based Regulation: Evidence from Health Insurers and the Affordable Care Act

2020 ◽  
pp. 0000-0000
Author(s):  
Evan M. Eastman ◽  
David L. Eckles ◽  
Andrew Van Buskirk
Keyword(s):  
Financial Reporting ◽  
Affordable Care Act ◽  
Reporting Quality ◽  
Economic Consequences ◽  
Financial Reporting Quality ◽  
Minimum Amount ◽  
Publicly Traded ◽  
Patient Protection ◽  
The Affordable Care Act ◽  
Health Insurers

The Patient Protection and Affordable Care Act (ACA) requires that insurers spend a minimum amount of their premium revenue on policyholder benefits. The Act specifies enforcement via a combination of insurer self-reporting, government examinations, and payment of policyholder rebates in cases where insurers fail to meet the required spending amount. We find that insurers' reported estimates are consistently overstated in situations where more accurate estimates would have triggered rebate payments; publicly-traded insurers (particularly those exhibiting poor financial reporting quality) exhibit the strongest evidence of strategic over-estimating. In aggregate, we estimate that approximately 14 percent of insurers engage in strategic overestimates, and that insurer overestimates resulted in hundreds of millions of dollars in underpaid policyholder rebates. Our study illustrates how a combination of regulatory design choices and lax oversight can weaken the effectiveness of accounting-based regulation and have substantial economic consequences.

State Regulation of Coverage Options Outside of the Affordable Care Act: Limiting the Risk to the Individual Market

2018 ◽  
Author(s):  
JoAnn Volk Volk ◽  
Sabrina Corlette Corlette ◽  
Kevin W. Lucia Lucia ◽  
Justin Giovannelli Giovannelli ◽  
Dania Palanker Palanker ◽  
...  
Keyword(s):  
Affordable Care Act ◽  
State Regulation ◽  
Individual Market ◽  
The Affordable Care Act ◽  
The Individual
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