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Rather, two major insurers said last week they are looking at expansion on exchanges and are making money on the business.
“ Centene's exchange experience continues to be favorable and we are achieving margins at the higher end of our targeted range,” Centene chairman Michael Neidorff said during the company’s first-quarter earnings call last week. “Our marketplace strategy has been and continues to be focused on targeted low-income subsidized individuals, many of whom were previously Medicaid-eligible. We designed our exchange solutions to be able to leverage our Medicaid platform including provider networks.”
Inside Obamacare: The Fix For America’s Ailing Health Care System explores the ways the Affordable Care Act will impact your health care.
Centene is now the largest provider of health benefits to state Medicaid programs for poor Americans and has used that business as a springboard to grow its public exchange membership to more than 680,000 in 15 states.
By comparison, Neidorff said UnitedHealth Group is selling plans at the “higher end in the platinum and the gold” categories and lost a lot of those members. Platinum plans, which cover 90% of "covered" medical expenses, and gold plans, which cover 80%, tend to be more expensive. The most popular category is silver, which provides 70% of covered expenses.
Anthem chief executive officer Joe Swedish said his company’s Blue Cross and Blue Shield brands tend to have a longer track record in sales of individual policies, which is giving the insurer a leg up on UnitedHealth and other rivals that entered only a handful of markets in 2014 and unsuccessfully attempted to expand in 2015.
“We really do believe this flight to safety is real and I think flight to safety is very relevant with respect to how folks are connecting back to us in terms of a known brand,” Anthem chief executive officer Joe Swedish told analysts last week. “I think we're going to really seek to leverage that more effectively in every market that we're serving.”
Furthermore, Blue Cross companies and other carriers have shown they can withstand losses in the first two years coverage was available on exchanges while cooperatives that were formed under the ACA solely to offer coverage to government-subsidized customers weren’t well capitalized, and that led to solvency issues.
“New York is, obviously, clearly one of the markets where the co-ops struggled,” Anthem chief financial officer Wayne S. DeVeydt said. “California is another market where we did perform well. “
DeVeydt said Anthem has also picked up membership in Colorado and Kentucky, the location of Humana’s headquarters, where co-ops have “had their difficulties.”
“I would say we've picked up more than our market share,” DeVeydt said. “So the membership available with their exits we're disproportionately picking up market share.”