What is PPACA World like? Anthem and Humana open up

Kane said he thinks HumanaOne will at least have break-even results this year, but that the company may need to get money from PPACA “three R’s” risk-management programs to achieve that goal.

See also: Feds post PPACA reinsurance program data

3. The three R’s are getting more attention.

Anthem was less detailed than competitors like Aetna and Humana about its three R’s program “payables” and “receivables” estimates. It did not give specific estimates in either its earnings release or the quarterly financial report it filed with the U.S. Securities and Exchange Commission.

Swedish said during the conference call that the company expects to pay some money into the risk-adjustment money, which uses cash from plans with relatively low-risk enrollees to help carriers with higher-risk enrollees, for both 2014 and 2015.

For the risk corridors program, which is supposed to use money from carriers with good underwriting results for 2014, 2015 and 2016 to help carriers with poor results for those years, Anthem has a “slight net payable position” for 2014 and, for now, has a neutral position for 2015, Swedish said.

PPACA also has a reinsurance program that’s supposed to use an assessment on most health plan enrollees to help PPACA-compliant pay the bills of enrollees with catastrophic claims.

“We continue to book reinsurance as appropriate,” Swedish said.

Humana says that, as of March 31, it was expecting to pay $2 million into the risk-adjustment program for 2015, and to get $42 million for 2014.

The company was expecting to get $19 million from the risk corridors program for 2015, and $91 million for 2014.

The company was hoping to collect $47 million in PPACA reinsurance for 2015, and $535 million for 2014.

See also: Regulators move to expand PPACA risk program reporting 

4. The companies have different ways of talking about the small-group market.

DeVeydt said the company believes the insurance market as a whole to stabilize, but not necessarily the small-group market.

“Our goal was to build the biggest catcher’s mitt we can build, so that whether a member is in Medicaid, a public exchange, or a small group, we’ll have the ability to pick them up,” DeVeydt said.

Kane said Humana wants to wind down its large-group business and focus more on the small-group market, where it feels as if it’s more of a national player.

Some competitors have won small-group share by offering attractive rates recently, but, over the long run, “we feel very confident about our ability to compete and win in the smaller-case market,” Kane said.

See also: HealthCare.gov managers post small-group payment guide

5. Anthem is not impressed by the CO-OPs’ pricing decisions.

Anthem executives said the company has had trouble with sales partly because the new nonprofit, member-owned CO-OP plans have kept premiums at what Anthem believes to be unreasonably low levels, especially in markets such as Colorado and Kentucky.

“We believe we will continue to grow share as the market pricing backdrop stabilizes toward a more sustainable level, and CO-OPs and other entrants gain more experience,” Swedish said.

See also: Guaranty funds start paying CoOportunity claims

6. Georgia consumers are hard to figure out.

Humana executives said they were counting on the PPACA risk-adjustment program, which relies on a patient risk-scoring system similar to the system Medicare uses, to make offering high-value coverage to exchange enrollees a good business.

But one problem in Georgia, especially, is that the many of the enrollees who turned out to be heavy users of health care did not come in with documentable risk conditions.

The same strategy worked well in other states, executives said. 

See also: Actuary analyzes risky PPACA business