Two health insurers that focus on the government plan market say their public health insurance exchange operations look fine.
Centene Corp. (NYSE:CNC), the St. Louis-based company that’s acquiring Health Net Inc. (NYSE:HNT), says it ended the fourth quarter with 146,100 Patient Protection and Affordable Care Act (PPACA) exchange plan enrollees in 12 states, up from 75,000 exchange plan enrollees in nine states a year earlier.
Closing on Health Net should give the company a total of 500,000 exchange plan enrollees. The company now has 2016 exchange plan enrollees in 16 states, according to Centene Chairman Michael Neidorff.
Two of the three PPACA “three R’s” health insurer risk-management programs require thriving health insurers to pay extra cash into funds that are supposed to help struggling insurers.
“We’ve had a payable in all of our states,” Neidorff said during a conference call with securities analysts. “We see no reason why that should change.”
Neidorff said the company is happy with its PPACA exchange operating profit margins, and he said the margins are closer to 3.5 percent than 3 percent.
“We are a risk business,” Neidorff said. “It’s called managing that risk.”
The company as a whole is reporting $11 million in net income on $6.3 billion in revenue for the fourth quarter, compared with $107 million in net income on $4.7 billion in revenue for the fourth quarter of 2014.
The company ended the year providing or administering medical coverage for 5.1 million people, up from 4.1 million people a year earlier.
Another plan that focuses on the government plan market, Molina Healthcare Inc. (NYSE:MOH), said it ended 2015 with 205,000 exchange plan enrollees, up from 15,000 a year earlier.
Molina as a whole is reporting $30 million in net income for the fourth quarter on $3.8 billion in revenue, compared with $34 million in net income on $2.8 billion in revenue for the fourth quarter of 2014.
The company ended the year providing or administering medical coverage for 3.5 million people, up from 2.6 million people a year earlier.
The average amount of premium per member per month fell to about $224 in the fourth quarter, from an average of about $252 for the year. Meanwhile, the average amount of costs per member per month increased to about $195, from $186.
The medical cost ratio for exchange plan enrollees, or ratio of medical costs to premium revenue, increased to 87.1 percent in the fourth quarter, from a full-year average of just 73.8 percent.
But, because the exchange plan enrollees are some of the healthiest people Molina covers, their fourth-quarter medical cost ratio was still lower than the ratio than for any other Molina product line other than the company’s PPACA Medicaid expansion product line.
The PPACA exchange plan medical cost ratio rose mainly because of the amounts Molina had to pay into the PPACA three R’s programs, executives said.
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