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“Insurers and the government have developed a symbiotic relationship, nurtured by tens of billions of dollars that flow from the federal Treasury to insurers each year.” Michael F. Cannon, director of health policy studies at the libertarian Cato Institute.
Since the Affordable Care Act was enacted in 2010, the relationship between the Obama administration and insurers has evolved into a powerful, mutually beneficial partnership that has been a boon to the nation’s largest private health plans and led to a profitable surge in their Medicaid enrollment.
Since Mr. Obama signed the law, share prices for four of the major insurance companies — Aetna, Cigna, Humana and UnitedHealth — have more than doubled, while the Standard & Poor’s 500-stock index has increased about 70 percent.
“These companies all look at government programs as growth markets,” said Michael J. Tuffin, a former executive vice president of America’s Health Insurance Plans, the main lobby for the industry. “There will be nearly $2 trillion of subsidized coverage through insurance exchanges and Medicaidover the next 10 years. These are pragmatic companies. They will follow the customer.”
The relationship is expected only to deepen as the two sides grow more intertwined.
Federal law requires most Americans to have coverage, insurers provide it, and the government subsidizes it.
“We are in this together,” Kevin J. Counihan, the chief executive of the federal insurance marketplace, told insurers at a recent conference in Washington. “You have been our partners,” and for that, he said, “we are very grateful.”
WellPoint announced recently that it had gained 751,000 subscribers through the health insurance exchanges and 699,000 new members through Medicaid. Since the end of 2013, WellPoint’s Medicaid enrollment has increased by 16 percent, to a total of five million.
“Our government business is growing along multiple fronts” and accounted for about 45 percent of the company’s consolidated operating revenues, said Joseph R. Swedish, the chief executive of WellPoint.
Aetna, in reporting its third-quarter results, said many people thought 2014 would “spell the death of our industry.” But, the company said, it is having “a very good year,” thanks in part to “excellent performance in our government business, which now represents more than 40 percent of our health premiums.”
“With all the politics of the Affordable Care Act, people don’t realize how much the industry has benefited, and will continue to benefit, from the law,” said Jay Angoff, the Obama administration’s top insurance regulator from 2010 through 2012.
One insurer, Humana, derives about 65 percent of its revenue from its Medicare Advantage plans. Enrollment in these plans climbed 17.5 percent, to 2.9 million, in the year that ended Sept. 30, the company said.
At UnitedHealth Group, Medicaid and Medicare Advantage together are expected to provide more than $60 billion in revenue, or slightly less than half of the company’s total, this year. United expects to participate in insurance exchanges in 23 states next year, up from four this year.
“The government, as a benefit sponsor, has been increasingly relying on private sector programs,” United said in a document filed with the Securities and Exchange Commission. “We expect this trend to continue.”
In another sign of the close relationship, the administration has recruited experts from the industry to provide operational expertise.
“Insurers and the government have developed a symbiotic relationship, nurtured by tens of billions of dollars that flow from the federal Treasury to insurers each year.” Michael F. Cannon, director of health policy studies at the libertarian Cato Institute.
Since the Affordable Care Act was enacted in 2010, the relationship between the Obama administration and insurers has evolved into a powerful, mutually beneficial partnership that has been a boon to the nation’s largest private health plans and led to a profitable surge in their Medicaid enrollment.
Since Mr. Obama signed the law, share prices for four of the major insurance companies — Aetna, Cigna, Humana and UnitedHealth — have more than doubled, while the Standard & Poor’s 500-stock index has increased about 70 percent.
“These companies all look at government programs as growth markets,” said Michael J. Tuffin, a former executive vice president of America’s Health Insurance Plans, the main lobby for the industry. “There will be nearly $2 trillion of subsidized coverage through insurance exchanges and Medicaidover the next 10 years. These are pragmatic companies. They will follow the customer.”
The relationship is expected only to deepen as the two sides grow more intertwined.
Federal law requires most Americans to have coverage, insurers provide it, and the government subsidizes it.
“We are in this together,” Kevin J. Counihan, the chief executive of the federal insurance marketplace, told insurers at a recent conference in Washington. “You have been our partners,” and for that, he said, “we are very grateful.”
WellPoint announced recently that it had gained 751,000 subscribers through the health insurance exchanges and 699,000 new members through Medicaid. Since the end of 2013, WellPoint’s Medicaid enrollment has increased by 16 percent, to a total of five million.
“Our government business is growing along multiple fronts” and accounted for about 45 percent of the company’s consolidated operating revenues, said Joseph R. Swedish, the chief executive of WellPoint.
Aetna, in reporting its third-quarter results, said many people thought 2014 would “spell the death of our industry.” But, the company said, it is having “a very good year,” thanks in part to “excellent performance in our government business, which now represents more than 40 percent of our health premiums.”
“With all the politics of the Affordable Care Act, people don’t realize how much the industry has benefited, and will continue to benefit, from the law,” said Jay Angoff, the Obama administration’s top insurance regulator from 2010 through 2012.
One insurer, Humana, derives about 65 percent of its revenue from its Medicare Advantage plans. Enrollment in these plans climbed 17.5 percent, to 2.9 million, in the year that ended Sept. 30, the company said.
At UnitedHealth Group, Medicaid and Medicare Advantage together are expected to provide more than $60 billion in revenue, or slightly less than half of the company’s total, this year. United expects to participate in insurance exchanges in 23 states next year, up from four this year.
“The government, as a benefit sponsor, has been increasingly relying on private sector programs,” United said in a document filed with the Securities and Exchange Commission. “We expect this trend to continue.”
In another sign of the close relationship, the administration has recruited experts from the industry to provide operational expertise.
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