Blue Cross Blue Shield, the nonprofit health insurance network, offers a great example of the variety of experiences that insurers operating in the Affordable Care Act marketplace have encountered over the past three years.
Some Blue plans in some states have been successful. Others have failed miserably. An analysis of plans in 34 states by Modern Healthcare reveals enormous performance disparities.
The website reported that half of the 34 plans posted profits last year.
For instance, Blue Cross Blue Shield of Arkansas, which controls a whopping 90 percent of the individual health insurance market in the state, including ACA and non-ACA plans.
Arkansas Blue reported a 6.2 percent profit on its individual plans in 2015, and it is projecting confidence as 2016 comes to a close.
One possible explanation for the success in Arkansas is the largely privatized Medicaid expansion that the state has pursued.
Due to a Medicaid waiver the state was granted by the federal government, many of its poor have their Medicaid coverage administered through a private market insurer.
Meanwhile, in neighboring Tennessee, whose insurance commissioner has suggested the ACA exchange may soon collapse, the Blue Cross brand is suffering.
The Volunteer State Blue reported a loss of nearly $200 million last year, and responded by asking the state to approve a 62 percent premium increase and withdrawing from markets in the state’s three largest cities.
Again, there are undoubtedly a number of variables that led to the poor results in Tennessee, but the major public policy distinction between it and Arkansas is that the latter expanded Medicaid. Tennessee is one of the 19 states that has continued to refuse the expansion.
One other policy distinction is whether states have allowed people to continue being covered by plans that are not compliant with the ACA’s definition of comprehensive coverage.
Some states have allowed individuals to keep their “grandmothered” plans that they purchased between 2010 and 2013. Grandmothered plans are distinct from “grandfathered” plans, which were purchased before 2010.
Allowing individuals to keep grandmothered plans likely is to the detriment of the ACA exchange, since non-compliant plans are often catastrophic plans that appeal to healthy people –– the same people that the ACA insurance pool lacks in many states.