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.

Early Experience of Financial Performance and Solvency of Medicaid-Focused Insurers Under ACA Expansion

2016 ◽  
Vol 74 (6) ◽  
pp. 750-762 ◽  
Author(s):  
Michael J. McCue
Keyword(s):  
Financial Performance ◽  
Affordable Care Act ◽  
First Year ◽  
State Health ◽  
Medicaid Coverage ◽  
Administrative Costs ◽  
Operating Profit ◽  
Solvency Ratio ◽  
Medical Loss Ratio ◽  
Health Insurers

To allow for greater coverage of the uninsured, the Affordable Care Act expanded Medicaid coverage in 2014. Accessing financial data of state health insurers from the National Association of Insurance Commissioners, this data trend study compares the financial performance and solvency of Medicaid-focused health insurers prior to and after the first year expansion of Medicaid coverage. After the first year of Medicaid expansion, there was a significant increase in operating profit margin ratio for Medicaid-focused health insurers within expansion states. Lower medical loss ratio as well as no change in administrative costs contributed to this profitable position. The risk-based capital ratio for solvency increased significantly for health insurers in nonexpansion states while there was no change in this ratio for health insurers in expansion states. Conversely, the other important solvency ratio of cash flow margin increased significantly for health insurers in expansion states but not for insurers in nonexpansion states.

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)

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.

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

Affordable Care Act Turmoil: Large Losses in the Individual Market Portend an Uncertain Future

2018 ◽  
Author(s):  
Brian Blase ◽  
Doug Badger ◽  
Douglas Badger ◽  
Seth J. Chandler ◽  
Edmund Haislmaier
Keyword(s):  
Affordable Care Act ◽  
Individual Market ◽  
Uncertain Future ◽  
The Individual

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 Examining Incoming Credit Differences Between First-Year and Transfer Students

2018 ◽  
Vol 38 (2) ◽  
pp. 31-44
Author(s):  
Yang Yang ◽  
Kelly Briggs ◽  
Sandra Avalos ◽  
Christina M. Anderson
Keyword(s):  
High Schools ◽  
Transfer Students ◽  
Professional Education ◽  
First Year ◽  
Degree Programs ◽  
Land Grant University ◽  
First Year Students ◽  
Policy Makers ◽  
Small High Schools ◽  
The Difference

In this study, the difference in the number of initial credits between incoming transfer and first-year students entering a land grant university in a professional education program was examined (N = 488). A multivariate analysis of variance revealed that transfer students transferred significantly more total credits and more credits that counted toward degree programs than did first-year students. Undergraduates who had graduated from small high schools transferred more credits and more credits that counted than did those from large high schools. However, first-year students transferred a significantly higher percentage of total credits that counted toward the degree programs than did transfer students. Implications for advisors, institutions, and policy makers are discussed.

Grades or labels? Beef prices and quality

2016 ◽  
Vol 33 (9) ◽  
pp. 1406-1412 ◽  
Author(s):  
Stefan Mann ◽  
Daniel Erdin
Keyword(s):  
A Priori ◽  
Data Sets ◽  
Policy Makers ◽  
Content Type ◽  
Production Methods ◽  
Grading Systems ◽  
The Difference ◽  
The One ◽  
The Individual ◽  
Price Differences

Purpose The difference between quality grades and quality labels is that the latter are awarded on the basis of production processes, whilst the former are conferred on the strength of the actual production results. In the course of a de-ideologisation of society, it might be assumed that the price differences between quality grades would grow larger and larger, while those between quality labels would tend to shrink. The purpose of this paper is to develop and test this hypothesis. Design/methodology/approach Regressions for the calf market on the one hand and for 4,180 cattle-market data sets on the other are run with Stata. Findings The results largely confirm the rising importance of grades between 2000 and 2014. In the period under consideration, a price spread occurs between the individual grades of the Swiss grading system, whilst the surcharge for organic products shrinks. No price discrimination is identified a priori for conventional labels. Practical implications The focus of both chain management and policy makers should be put on effective grading systems rather than on labelling production methods. Originality/value This is the first econometrical comparison of the price effect of both grades and labels.

The Tortuous Journey of the Health Insurance Marketplace

2018 ◽  
Vol 46 (4) ◽  
pp. 862-872 ◽  
Author(s):  
Jeanne M. Lambrew
Keyword(s):  
Health Insurance ◽  
Affordable Care Act ◽  
Medicaid Expansion ◽  
Policy Options ◽  
Policy Makers ◽  
The Past ◽  
Individual Market ◽  
The Affordable Care Act

This article examines the past, present, and future of individual market policies in the Affordable Care Act (ACA). It does so, first, by reviewing the law's goals, scope, and set of individual market policies, collectively called the Health Insurance Marketplace. The Marketplace, along with the ACA's Medicaid expansion, was designed to fill in gaps to provide all Americans with accessible, affordable coverage. Second, it reviews evidence on the law's impact to date, including changes under a new administration. Third, it discusses the three main policy options for the Marketplace: do nothing, build on it, or replace it. Lastly, it discusses the factors which could determine which pathway policy makers follow.

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