It would be a stretch to say that all is well for the Patient Protection and Affordable Care Act (PPACA). Insurers participating in the insurance marketplace set up by the landmark law are agitating for higher premiums and the country's largest insurance company, citing losses, has announced that it will withdraw from PPACA exchanges in all but six states.
The good news, however, is that UnitedHealthcare's decision to abandon Obamacare is the exception, not the rule. Most insurers appear committed to the PPACA exchanges.
A recent survey by the Commonwealth Fund of major for-profit insurers found that most companies are signaling to investors that they plan to stay the course. The only other major insurer that has suggested it may leave is Humana, which is in the process of merging with Aetna. The latter company has not shown any interest in abandoning the exchanges.
Furthermore, the study found that insurers have seen membership in their Obamacare plans grow during the first quarter of the year. In fact, Humana was the only company that lost ground; more than 180,000 enrollees dropped its plans or were terminated, often due to an inability to provide proper documentation for eligibility.
Not all insurers report that their PPACA enrollees were sicker or more expensive to cover than their typical customer base. Molina reported that the risk profile of its marketplace customers was actually better and Centene said that the profile was in line with expectations.
A number of insurers are projecting confidence about the future of their marketplace business, which they perceive as a presenting a major growth opportunity. Companies that have experienced losses in the first 30 months of operation believe they can redesign their plans to eventually profit.
For most insurers, the investment in the marketplace is not great enough to make or break their business, which is still largely based on conventional offerings to employers, Medicare and Medicaid.
"We have never expected our marketplace product to perform better than our Medicaid business, nor operate at significantly better margins over the long term," said Molina in a statement.
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