Although health insurers’ profit margins shrank a little in 2013, enrollment amongst the largest for-profit insurers jumped by eight million over 2012, according to a new analysis by Mark Farrah Associates. The report concludes that “leaders in the health insurance sector have good reason to remain optimistic”.
Although all major insurers succeeded in enrolling members in the new ObamaCare health insurance exchanges, this is still a small fraction of their business.
Mark Farrah Associates divides the insurers’ membership into two categories: “at risk” and “administrative services only” (ASO). “At risk” enrollment grew more than ASO enrollment. The analysis appears to categorize all commercial contracts, Medicare Advantage, Medicaid managed care, and ObamaCare exchange policies as “at risk”. However, the risk borne in these different segments varies significantly (e.g., consider the “bailout” for insurers participating in ObamaCare exchanges). It will be interesting to see how insurers identify the segments in which they have competitive advantage as ObamaCare continues to sink in.