In the ACA marketplace, insurers whose core business has been Medicaid managed care, most notably Centene and Molina, have increasingly underpriced the competition in markets where they compete. These insurers field narrow networks and probably pay little more than Medicaid rates to providers.
United Healthcare, the nation's largest health insurer, has made waves by reporting large losses in the ACA marketplace and threatening to withdraw from it. Yesterday Richard Mayhew
posited that UHC's complaints mainly reflect the extent to which the giant has gotten its clock cleaned in the marketplace -- offering more extensive networks than competitors, charging much higher rates in many key markets, and thereby likely attracting sicker enrollees who place a premium on provider choices.
Mayhew's main source is an Urban Institute
analysis of 2016 rates, mainly focused on 81 ACA rating regions that account for 47% of the country's population. Urban's John Holahan and Linda Blumberg found that in 2015, UHC sold plans in 36 of those 81 regions, but offered the cheapest or second-cheapest silver plan in only eight of them. In 2016, UHC is in 48 regions, and offers cheapest or second-cheapest (benchmark) silver in just 15 of them.
In marked contrast, Medicaid managed care providers, led by Centene (fielding the Ambetter brand) and Molina, are playing in 48 of the 81 regions this year and offering cheapest or second-cheapest silver in 44 of them. That up up from 36 out of 44 in 2015.
