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New Obamacare rule could boost WellPoint

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As competition on the Obamacare exchanges heats up in 2015, companies like WellPoint Inc. that were early movers on the exchanges will enjoy a distinct advantage: automatic re-enrollment.

The U.S. Department of Health and Human Services proposed a new rule June 26 that would automatically re-enroll exchange plan customers each year, unless they specifically choose a different health plan.

If that rule goes into effect, it would be a big plus for Indianapolis-based WellPoint, which sold on the exchanges for 2014 in all 14 states where it operates Blue Cross health insurance plans. The rule would affect only states that relied on the federal government to operate an insurance exchange, via the HealthCare.gov website.

The exchanges are the only place consumers can obtain the generous tax credits to reduce the price of health insurance. Those credits averaged more than $4,000 per person in Indiana this year.

“The ease of automatic renewal, including the retention of government subsidies, will certainly appeal to many individuals who purchased policies on the federal exchanges last year, making it likely that a large number of the policies sold will remain with the same insurer for another year,” Steve Zaharuk, an analyst at Moody’s Investors Service, said in a July 3 note to bondholders.

The proposed rule would also be a hurdle for companies expanding into new exchange markets this year, Zaharuk noted.

“For other insurers, especially those looking to enter the exchanges for the first time, the announcement means that a significant number of potential customers will have been removed from the marketplace,” he wrote.

About 110,000 Hoosiers obtained coverage this year via the Obamacare exchange, also known as the Marketplace. WellPoint’s Anthem subsidiary claimed 74,000, or about two-thirds, of those customers. Insurers MDwise Inc., Physicians Health Plan of Northern Indiana and Coordinated Care divided the other third.

The Congressional Budget Office predicted enrollment in the exchanges would more than double from 2014 to 2015, although that was before 2014 enrollment exceeded expectations prior to the March 31 deadline.

In Indiana, health insurers expect exchange enrollment to rise at least 60 percent next year. But there will be significantly more competition heading into 2015.

Minnesota-based UnitedHealthcare, the largest health insurer in the nation, has told local brokers it will sell on the exchanges under its All Savers brand name.

New York-based Assurant Inc., a publicly traded firm with $9 billion in annual revenue, will also sell 2015 policies on the exchange in Indiana—even though it sold only off-exchange policies, in Indiana and 40 other states, for 2014.

“We decided to wait a year and file on a select number of exchanges this year, in order to provide additional choice for customers purchasing on and off the Exchange,” spokeswoman Mary Hinderliter said in an email.

Two other players are large Medicaid managed care companies. Ohio-based CareSource Inc., the largest Medicaid managed care contractor in that state, will compete in Indiana for 2015.

Also, Coordinated Care, a brand used by St. Louis-based Centene Corp. and its Indiana subsidiary Managed Health Services, plans a big expansion from its geographically limited presence in Indiana last year. Centene has annual revenue of nearly $11 billion.

“We took a purposeful, conservative approach when entering the Health Insurance Marketplace in Indiana, and now with more experience, we will continue to expand in a strategic and disciplined manner,” Patrick Rooney, CEO of Managed Health Services, said in a statement. His company expects its enrollment to soar from less than 1,000 this year to more than 12,000 next year.

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  • Competition!
    Competition is good and will lead to lower health premiums. This will have a huge impact on Hoosier that buy individual health plans off of the exchange.

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