Large Health Plan Enrollment Trends

Our health insurer market on both a national and regional level is fairly concentrated and two large pending deals, which may or may not be approved, would further concentrate that market.  And the latest Mark Farrah Associates report on health plan enrollment indicates that the large health plans also continue to experience significant organic growth.   (MFA Report)   For the seven top plans–Aetna, Cigna, HCSC, Humana, Kaiser, UnitedHealth and Anthem, in the second quarter of 2015 they had year-over-year enrollment increases of 4.3 million people, or 3%, to a total of 146.6 million members.  In aggregate these firms insure or administer coverage for 53% of the estimated 256 million Americans with health insurance.  On an individual basis, UnitedHealth added 1.3 million members, up to 37.8 million.  Unfortunately a significant portion of this growth was from the public exchanges, and UnitedHealth has subsequently disclosed that it is losing a lot of money on these members and likely will limit or cease participation in exchange product offerings.  Anthem added 1.25 million people on a year-over-year basis, with substantial growth in its self-insured administration segment.  Anthem has a very large participation on the public exchanges and in the wake of the UnitedHealth announcement, claims it is doing okay on the exchanges, but they will likely get hammered at some point as well.  Aetna had 2.2% growth, hampered by a decline in insured members.  Humana had a slight decline in membership, driven by a 10% reduction in self-funded clients.  HCSC also had a decline in self-insured business of 2.4% but made up for it with 6.1% year-over-year gain in insured enrollment.  Kaiser had 6.5% member growth, all driven by insured person increases.  Cigna had 3.2% enrollment growth, with strong self-funded growth somewhat offset by losses of members in the risk business.  Kaiser, a non-profit, had the highest profit margins among the large health plans, although it declined slightly in second quarter 2015 compared to second quarter 2014.  Aetna and UnitedHealth reported slight increases in profit margins in the same period, as did Anthem.  Overall, while the large health plans are continuing to add members, the exchange category is and likely will continue to be volatile and to cause serious profitability concerns for any plan with significant participation on the exchanges.