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- Title
Key drivers of financial performance of insurers in the Affordable Care Act market exchange.
- Authors
McCue, Michael; Hall, Mark A; Palazzolo, Jennifer
- Abstract
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.
- Subjects
HEALTH insurance &; economics; ECONOMIC impact; MEDICAID; INSURANCE companies; MANAGED care programs; MEDICAL care costs; PROFIT; RESEARCH funding; STATISTICS; DATA analysis; PATIENT Protection &; Affordable Care Act; DESCRIPTIVE statistics; HEALTH insurance exchanges; MANN Whitney U Test; ECONOMICS
- Publication
Health Services Management Research, 2020, Vol 33, Issue 3, p130
- ISSN
0951-4848
- Publication type
Article
- DOI
10.1177/0951484819887139