After years of pullbacks, insurers are increasing their footprints in the Affordable Care Act marketplaces next year, despite uncertainty including the latest court challenge to the health law.
Centene Corp. CNC 1.19% and Molina Healthcare Inc. MOH 1.18% said they are making regulatory filings to newly join or re-enter ACA exchanges in states including North Carolina, Wisconsin and Utah. Smaller operators have made filings signaling they will likely come into markets where they didn’t offer ACA marketplace products this year, including Bright Health Inc. in Tennessee, Virginia Premier in the Richmond, Va., area and Presbyterian Health Plan in New Mexico.
In the latest move, Oscar Insurance Corp. said it will enter exchanges for the first time in Florida, Arizona and Michigan next year, as well as going into new markets in Ohio, Tennessee and Texas, states where it already sells ACA plans. Including the new entries, Oscar will sell coverage in 14 markets across nine states in 2019.
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The expansions reflect that many insurers’ ACA business has moved into the black, after years of rate increases that have helped premiums catch up to costs, said Cynthia Cox, a director at the Kaiser Family Foundation. The Kaiser foundation found in an earlier analysis that insurers’ financial performance on plans sold to consumers improved sharply last year, achieving the best results since the ACA’s major market changes went into effect in 2014. “They’re feeling more confident in their ability to be profitable in this market,” said Ms. Cox.
Mario Schlosser, chief executive of Oscar, said the startup insurer’s loss narrowed last year, and the first quarter of 2018 was the first profitable quarter. The results “have been improving because the market is stabilizing,” as well as changes Oscar itself has made, he said, and the insurer is already weighing further expansions for 2020.
Still, insurers said they are braced for continued uncertainty in the ACA business. In 2019, enforcement of the health law’s requirement for people to have health insurance will end, while the Trump administration is opening the door to alternative types of coverage that insurers say could pull healthy enrollees out of ACA plans. Several states are also once again challenging the ACA in a court case, and the Trump administration has asked the court to strike down key elements of the law.
“We’re not going into this with blinders on,” said Linda Hines, chief executive of Virginia Premier, which is owned by health system VCU Health and hasn’t previously sold ACA plans. “We’re not going in saying, ‘we’re going to make x percent margin.’”
In recent years, there had been a steady decrease in the number of insurers in many ACA markets, with the average number per state dropping to 3.5 this year, from 4.3 in 2017 and 6 in 2015, according to the Kaiser foundation. Large national insurers Aetna Inc., Humana Inc. and UnitedHealthcare, a unit of UnitedHealth Group Inc., pulled back sharply, while Anthem Inc. withdrew from many regions.
For next year, there is so far no sign of further exits, though most states haven’t yet made filings public. In a survey of insurers, consulting firm Oliver Wyman, a unit of Marsh & McLennan , found none that planned to shrink their ACA-plan geography. Among 29 insurers that answered a question about their ACA offerings for next year, 21% said they were expanding and the rest weren’t changing their footprint.
“Absolutely, the tide is turning,” said Tom Loach, director of carrier relations at eHealth Inc. In addition to the expansions that are already public, he expects some states to have increased offerings from Blue Cross Blue Shield insurers.
Anthem, which sells Blue plans, has filed to offer exchange products in Maine if the state is able to implement a reinsurance program, after withdrawing from the marketplace for 2018; Anthem said it will “continue to work with the state through the regulatory process.”
The expansions will cement trends that had already emerged, including a growing role for Medicaid-focused insurers. Molina, which left Utah and Wisconsin’s exchanges this year, said it would file for marketplace plans in both states for 2019, in addition to the seven where it currently sells ACA plans, but will ultimately “evaluate our participation on a market-by-market basis.”
In addition to entering North Carolina, Centene filed to offer plans in Tennessee, where it isn’t currently selling them. The insurer said it will “enter a few new markets in 2019, as well as expand its service area in several existing states.”
In a statement, Presbyterian Health Plan, which is owned by Presbyterian Healthcare Services, said it is “currently evaluating re-entering” the New Mexico exchange and will make a final decision around mid-July.
Write to Anna Wilde Mathews at anna.mathews@wsj.com