Results of Largest Health Plans

Several of the largest health plans in the United States are apparently contemplating consolidation.  The seven largest insurers, UnitedHealth, Aetna, Cigna, Kaiser, HCSC, Anthem and Humana, covered 144.7 million people across commercial, Medicare and Medicaid plans at the end of 2014, up from 139.1 million at the end of 2013, according to a report from Mark Farrah Associates.  This is about 54% of all covered lives.   (MFA Report)   This is about 54% of all covered lives. Anthem saw total enrollment growth of 5.2%, driven largely by self-funded increases, while its insured membership actually declined.  Aetna grew 5.9%, balanced between self-insured and insured, with large Medicare Advantage gains.  UnitedHealth lost 1% of its membership, resulting from losses of self-funded groups, primarily one large state employee group.  Cigna had modest 2.7% increases in members, while HCSC grew a much more rapid 9.2%, with almost 20% growth in insured members.  Humana had 13% growth with a 27% rise in funded members.   Humana’s growth was in the Medicare market and on the exchanges.  Anthem by acquisition gained a large number of Medicaid members.

UnitedHealth continues to have profit margins around 6%, much higher than Anthem or Aetna.  Kaiser, which is nominally not for profit, has among the highest net income margin.  HCSC, Anthem and Aetna have been the biggest exchange players, with 750,000; 707,000 and 560,000 respectively.  UnitedHealth lagged greatly with only 10,000 but is participating much more widely this year.  It seems very likely that the plans who enrolled a large number of exchange members lost money doing so and several of them have already indicated large premium increases for 2016.  It will be interesting to see if the early heavy participants on the exchanges, which gave them high overall enrollment growth, made any money doing that and/or will keep those new members as they increase premiums.  And will UnitedHealth’s more cautious strategy pay off better in the long room.