Enrollment in individual health insurance coverage increased sharply in 2014, but overall net income for New York health plans dropped by more than $1 billion compared to 2013, according to a new report from the United Hospital Fund. The Big Picture VI: New York's Private and Public Insurance Markets, 2014, the sixth installment in the series, uses an analysis of enrollment and financial data across health plans and lines of business to provide a comprehensive snapshot of New York's health insurance market since the implementation of the landmark Affordable Care Act (ACA), and identifies key issues to watch looking ahead.
“Increased enrollment on and off the Exchange and in the Medicaid program highlights the importance of ACA reforms for New York,” said Peter Newell, director of UHF's Health Insurance Project and an author of the report. “Although some sectors of the industry experienced growth in net income too, many nonprofit plans struggled in 2014, and Medicare Advantage losses were a drag on most health plans' performance.”
Key findings from the report include the following:
Individual market enrollment nearly tripled in 2014 compared to 2013, and Medicaid Managed Care membership rose by 30 percent compared to 2013. However, although coverage through employer sponsored plans was stable, the shift of many public employees to self-insured coverage led to a decline in total fully insured enrollment overall.
Total net income for all New York health plans in 2014 was $516 million, down by more than $1 billion from the totals in 2013 ($1.6 billion) and 2012 ($1.7 billion).
Nonprofit Article 43 insurers reported losses of $608 million in 2014, and HMOs lost money as well; Article 42 for-profit insurers and Prepaid Health Services Plans, which specialize in public programs, posted solid returns.
Medicaid Managed Care was the most positive line of business in 2014, while Medicare Advantage generated significant losses for most health plans.
Prepaid Health Services Plans continued their steady growth in enrollment and market share, entering the commercial market for the first time. This sector saw the largest share of enrollment in 2014, nearly 30 percent.
“Ambitious delivery system and payment reform efforts are underway in every corner of New York's health insurance system—Medicaid, the commercial market, and Medicare,” said Chad Shearer, UHF's vice president for policy. “The comprehensive analysis in The Big Picture provides a very useful tool for all involved in these challenging efforts.”
The Big Picture VI concludes by analyzing issues that will come into play as the health insurance marketplaces continue to evolve in the face of new state and federal policy initiatives and continuing cost pressures, including challenges in sustaining a stable individual market, the shrinking small group market, and signs of an aging regulatory infrastructure.
The Big Picture VI was written by Mr. Newell; Allan Baumgarten, an independent consultant; and Nikhita Thaper, a research assistant at UHF. It is available at www.uhfnyc.org/publications/881161. Over the past several months, UHF has published four related “snapshots” focused on particular issues related to the Affordable Care Act and their effects on New York's insurance market, including the Transitional Reinsurance Program, proposed mergers, New York's individual market, and a temporary premium subsidy program. All are available from UHF's website, www.uhfnyc.org.
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About United Hospital Fund: United Hospital Fund works to build a more effective health care system for every New Yorker. An independent, nonprofit organization, we analyze public policy to inform decision-makers, find common ground among diverse stakeholders, and develop and support innovative programs that improve the quality, accessibility, affordability, and experience of patient care.