A recent round of announcements has once again raised concerns regarding the viability of the Affordable Care Act (ACA) and its Health Insurance Marketplace (often referred to as the “exchange”). UnitedHealth made headlines when it announced that it may exit all exchange products in 2017 on the heels of an expected $425 million loss over a two year period. Aetna, Humana and Cigna have also pointed to significant financial challenges in their exchange lines of business. And earlier this year, Blue Cross Blue Shield of Texas announced that it was pulling its PPO plan offering for 2016 because of a $400 million loss on its exchange plans in 2014.
To add fuel to the fire, 12 out of the original 23 Consumer Operated and Oriented Plans (Co-Ops) – a signature component of the ACA intended to foster competition and keep prices down – have either announced they are closing their doors or already done so. Many believe there are another five to 10 Co-Op plans that may be forced to shut down in 2016.
Despite these difficulties, we at Chartis believe the exchange is here to stay – whether it remains in its current form or in a refined model following the next election cycle – and there are key strategies and capabilities both payors and providers can develop to succeed in this market.