MCMURRAY, Pa.--(BUSINESS WIRE)--Mark Farrah Associates (MFA), www.markfarrah.com, assessed trends in enrollment, segment profitability and premiums found from their analysis of the NAIC’s Supplemental Health Care Exhibit (SHCE) filed by health insurers. This analysis included a focus on performance within Individual and Small Group comprehensive insurance segments. Plans in these two segments face the added constraint of a standard (minimum) MLR (Medical Loss Ratio), a key component of the Risk Corridor program, one of three premium stabilization programs instituted by the Affordable Care Act (ACA). In the latest Healthcare Business Strategy report, MFA examined these key findings directly related to the ACA’s impact and direction since December 2013.
After the first two full years of health insurance activity under the Affordable Care Act (ACA), some interesting trends are beginning to emerge. Overall, commercial enrollment declined by 9.4% (6.5 million members) to approximately 63 million since the onset of the ACA. In addition to shifts in membership, segment profitability has also been impacted with declines across Individual, Small Group and Large Group comprehensive lines. While all three commercial segments experienced significant declines in profitability over the two year period, the Small Group and Individual segments continued to experience the most substantial declines. The underwriting gain/loss for the Small Group segment decreased by 67% and the Individual segment reported a $1.2 billion underwriting loss in 2013. The Individual segment as a whole further declined to a $3.6 billion loss in 2015.
MFA’s brief focused on three year trend data in membership, claims incurred PMPM, adjusted premium PMPM and SHCE- reported MLR for the Individual and Small Group comprehensive segment leaders. Increased medical costs have contributed to profit losses in both segments for HCSC, UnitedHealth, Aetna, Anthem and Humana. The Small Group segment saw declines in profitability over the past two years, however not to the extent as the Individual segment. The Individual segment experienced the most substantial medical cost increases relating to the ACA. Premiums have increased considerably, but have not kept pace with rising costs in many cases. The Risk Corridor program failed to materially help with mitigating costs as intended and this was financially disruptive to many plans. Proper balancing of premium increases and cost control will be needed to return to pre-ACA levels of underwriting profitability.
To read the full text of "Key Trends within the Individual and Small Group Health Insurance Segments", visit the Analysis Briefs library on Mark Farrah Associates' website.
About Mark Farrah Associates (MFA)
MFA is a leading data aggregator and publisher providing health plan market data and analysis tools for the healthcare industry. Committed to simplifying analysis of health insurance business, our products include Medicare Business Online™, Medicare Benefits Analyzer™, Health Coverage Portal™, County Health Coverage™, Health Insurer Insights™, and Health Plans USA™.
