Centene

2018 MIDTERM ELECTION

Time: D H M S

As I noted last week, insurance carriers in North Carolina were supposed to have submitted their preliminary 2019 premium rate change filings as of May 21st. Unfortunately, as I also noted last week, those "deadlines" appear to be more "guidelines" in many states, with North Carolina among them; there's no publicly-available premium change data available yet.

However, as Louise Norris notes over at healthinsurance.org, there's some interesting news afoot in the Tar Heel State:

Looking ahead to 2019

Insurers that wish to offer individual market coverage in North Carolina in 2019 had to file rates and forms by May 21, 2018. The two insurers that offer 2018 coverage in the North Carolina exchange — Cigna and Blue Cross Blue Shield of North Carolina — have both filed rate for 2019. Although the filings do show up in SERFF, they have very little publically available data at this point.

Whenever I write or talk about the 3-Legged Stool of the ACA and the actual flaws in the law (as opposed to the ones deliberately created by the GOP), I usually focus on two "gaps" in the legs: The APTC subsidies getting cut off at 400% FPL and being too stingy below that level, and the individual mandate not being large enough (and not being properly enforced). As it happens, part of the first problem has already been unintentionally "solved" thanks to Trump's ham-handed CSR reimbursement cut-off (which ended up increasing APTC tax credits for those below the 400% cut-off), while the second problem has just been made a whole lot worse thanks ot the GOP repealing the mandate altogether.

However, in focusing on the legs of the stool, I often forget to mention another important issue: The width of the seat itself. That is, how wide the network of doctors and hospitals which accept the policy is. The Affordable Care Act does give some guidelines/regulations about how wide ACA-compliant policy networks have to be, like so:

3:20pm: IMPORTANT UPDATE!!

According to Steve Valandra, spokesperson for the Washington State Office of the Insurance Commissioner, the department has already come to a "done deal" agreement with Centene/Ambetter, the terms of which include:

  • The cease & desist order will be removed immediately, allowing Centene/Ambetter to continue selling plans on the individual market in Washington (including the ACA exchange)
  • Centene/Ambetter will immediately ameliorate all patient billing errors and other issues
  • Centene/Ambetter will be hit with a $1.5 million fine, but $1 million of this will be suspended if there are no further violations for at least 2 years
  • Centene/Ambetter must hire an external auditor, approved by the state insurance dept., to go over their books/etc.
  • The official notice of this agreement will be posted publicly on the Insurance Commissioner's website within 5 days.

Hat tip to Angela Marx for the tip!

UPDATE: Important to note that this story broke BEFORE Molina drew a line in the sand re. the CSR issue. That could be a game changer.

via the Oregon Register-Guard:

Insurer Centene commits to shaky ACA exchanges for 2018

One health insurer is eager to dive back into the Affordable Care Act’s troubled insurance exchanges next year, even as competitors waver and President Trump tweets doom about the law’s future.

Centene Corp. said Tuesday that its exchange enrollment has swelled 74 percent since last year, up to nearly 1.2 million people.

A few months ago I noted that while UnitedHealthcare and some other carriers may be losing money hand over fist on the ACA exchanges, at least some of them are making a profit, breaking even or at least cutting their losses down to a reasonable level.

In the past few days, this has become increasingly clear, as Centene's news from yesterday shows.

As Kevin Drum at Mother Jones notes (quoting Richard Mayhew of Balloon Juice):

As a simple reminder, competitive markets should see some companies make money and some companies that offer more expensive and less attractive products lose money. I would be extremely worried if everyone was making money after three years, just like I would be extremely worried that everyone was losing money after three years of increasingly better data.

With all the gloom & doom over UnitedHealthcare pulling out of over 2 dozen states next year due to large losses on ACA exchange policies, one might wonder whether anyone is actually making money on the exchanges.

Well, today, Centene appears to have answered that question:

Centene (a Medicaid insurer) is achieving profit margins on its #ACA exchange plans "at the higher end of our targeted range."

— Bob Herman (@MHbherman) April 26, 2016

Last fall, Centene's quarterly report stated that they had around 155,600 ACA exchange enrollees nationally, or just 1.7% of the total, so this might not seem that significant.

HOWEVER, I just checked their Q1 2016 10-Q report, and there's an eye-opener on page 24:

After UnitedHealthcare freaked everyone in the health insurance investor community out (along with enrollees, politicians, healthcare reporters/pundits, etc.) with their Thursday morning announcement that they might drop off the ACA exchanges in 2017, just 2 years after entering the exchanges and just 1 month after painting a rosy picture of the situation, several other major players in the individual market decided to calm everyone the hell down:

U.S. health insurers Aetna Inc and Anthem Inc on Friday sought to reassure investors that their Obamacare businesses had not worsened after UnitedHealth Group Inc warned of mounting losses in that sector.

Aetna and Anthem said their individual insurance businesses, which include the plans created by President Barack Obama's national healthcare reform law, had performed in line with projections through October. Both backed their earnings forecasts for 2015.