Dive Brief:
- Despite the high-profile losses experienced by numerous insurers in the 2015 marketplaces (though they were small bits of their portfolio), Florida's Blue Cross and Blue Shield affiliate has helped to demonstrate others fared perfectly well, Modern Healthcare reported.
- The insurer made a profit of nearly half a billion on its individual ACA plans last year, following a $124 million gross profit on those plans in 2014.
- Florida Blues' success, along with that of insurers including Centene and Molina Healthcare, throws some cold water on arguments that the markets are unsustainable.
Dive Insight:
Florida Blue attributed its marketplace profits to its use of high-deductible plans, and to its use of retail centers to provide customer service in enrollment.
As Modern Healthcare noted, much of the insurer's premium profits actually came from federal subsidies, given that 90% of those in Florida receive premium tax credits to lower their monthly coverage costs, and 70% qualify for cost-sharing reductions for their copays and deductibles.
Perhaps more controversially, some of the insurer's profits also came via the federal government's contested risk adjustment program, in which small insurers have turned out to be disproportionately paying up to their more powerful rivals.
Even with its healthy profit, however, Florida Blue is asking state regulators for a premium increase of 9.8% for individual plans and 8.7% for small-group plans with the broadest provider networks, Modern Healthcare noted. While other insurers' proposals so far vary widely between markets, premiums are currently expected to increase by an overall national average of 10% in 2017, according to an analysis released this week by the Kaiser Family Foundation.