Centene expands ACA offerings in 10 states

By | August 14, 2019

Dive Brief:

  • Centene said Tuesday it is broadening its footprint in 2020 to sell Affordable Care Act marketplace plans in more counties throughout the country.
  • The St. Louis-based insurer said it’s expanding in 10 states including Arizona, Florida, Georgia, Kansas, North Carolina, Ohio, South Carolina, Tennessee, Texas and Washington.
  • Centene’s exchange plans cover about 2 million people across 20 states.

Dive Insight:

Selling insurance plans to individuals through the exchanges has become an integral piece of Centene’s business.

Aside from its core business of contracting with states to sell Medicaid coverage to low-income residents, the marketplace business is one of Centene’s largest products in terms of enrollment.

Centene currently covers about 8.4 million Medicaid beneficiaries and about 2 million exchange members. Centene did not say how many new exchange members they plan to gain as part of the 2020 expansion.

Centene found early success in the marketplace as other insurers stumbled and ultimately pulled out. Their strategy is to focus on a lower-income population, a majority of which qualify for subsidies to help them afford coverage. The strategy is designed to complement its core business of catering to low-income individuals who qualify for Medicaid coverage.

As members earn more and no longer qualify for Medicaid, the idea is to attract them to Centene’s Ambetter exchange product, a network and experience they’ll be familiar with.

Earlier this year, a report found that the exchange had started to stabilize after a tumultuous 2018.

However, Centene said it expects costs to rise as exchange members are keeping their plans longer throughout the year, which will likely cause them to hit their out-of-pocket maximums, which is likely to raise costs for an insurer.

The trend seems to be a continuation from 2018. A recent report from CMS also noted the trend of consumers holding onto their plans longer when comparing 2018 to 2017.

In 2018, total marketplace enrollment across peaked in February, hitting 10.5 million but later fell to 9.2 million in December. In 2017, enrolled peaked in March at 10.5 million and later fell to 8.9 million.

“A higher percentage of individuals stayed in their plans throughout the year compared to 2017,” CMS said in a report released Monday.

Heading into 2020, a recent analysis shows that average premiums nationwide are expected to grow very modestly, the lowest increase since the marketplaces launched. Health policy experts say this is because of the major overcorrection in 2018 when plans sent premiums soaring due to uncertainty around ACA repeal.

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