Tag Archives: Affordable Care Act

Health Insurance Reacts to Healthcare Reform

Insurance companies’ financial success will depend on how they navigate through the new healthcare reforms of the Patient Protection and Affordable Care Act–particularly the new medicaid and medicare services, and the new health insurance marketplace.

WellPoint Inc.

“WellPoint Inc (WLP.N), the nation’s second largest health insurer, sees President Barack Obama’s healthcare reform giving a $20 billion boost to its revenue by 2016, led by an expansion of the Medicaid program for the poor and the introduction of subsidized coverage for the uninsured,” reported Rueter in July.

Wellpoint is an insurance company that provides a variety of different health care plans and recently acquired Amerigroup, a leading medicaid provider.

WellPoints 2013 second-quarter financial report showed an early trend of growth with the net income raising to $800.1 million, or $2.64 per share, from $643.6 million, or $1.94 per share, from the previous year.

WellPoint Stock chart from Barrons.com. Tracking WellPoint Inc. Stock from Jan. 2012 to Oct. 2013

WellPoint Stock chart from Barrons.com. Tracking WellPoint Inc. Stock from Jan. 2012 to Oct. 2013

As the new health insurance markets open, health insurance stocks, like WellPoint, will get to see if the predicted expansion and their investments in new healthcare reform will payoff.

“With Amerigroup, WellPoint’s affiliated Medicaid health plans now serve approximately 4.5 million beneficiaries of state sponsored healthcare programs in 20 states, bringing the company’s total medical enrollment to approximately 36 million members in all affiliated plans. WellPoint also now has a presence in several states with significant dual eligible managed care opportunities,” stated WellPoint in a 2012 press release.

Medicaid

Medicaid is a state-run health insurance program that is partially funded by the federal government and provides health insurance for, low-income families and children, pregnant women, the elderly and people with disabilities. The ACA provides states with funds to expand state medicaid coverage if they choose.

“The ACA expands Medicaid coverage for most low-income adults to 138% of the federal poverty level,” reported the Kaiser Family Foundation.

Twenty-three states and the District of Columbia have passed legislation to expand Medicaid. To manage these state-run program, many states chose to hire private insurance companies to handle the growing number of Medicaid recipients, reported Johanna Bennett for Barron’s.

Medicare

The ACA also will increase incentives for insurers to invest in Medicare. Medicare is federally funded health insurance that covers adults over the age of 65, people with disabilities and people will end-stage renal diseases.

“The Center for Medicare and Medicaid Services announced plans to increase the amount the government pays to insurance firms for its Medicare Advantage plan,” CNN Money reported. “Payments to insurers under Medicare Advantage will increase by 3.3% in 2014.”

Health Insurance Marketplace

In addition to Medicaid and Medicare expansion, the ACA is predicted to expand the health insurance market through legislation that requires all U.S. citizens to have health insurance by 2014, or pay of fee. To expand the number of health insurance options a new online health insurance marketplace opened Oct 1.

Insurance companies filed to participate in state or the federal health insurance marketplaces, and are offering plans targeted at people who are currently uninsured because they can not afford health insurance plans or previously did not qualify for coverage.

An increased number of people buying health insurance could increase health insurers profit, but will also increase health coverage cost.  In anticipation of additional cost some insurance companies raised premium costs on their current insurance plans.

Health insurance stocks, like Wellpoint, must decide how their services and investments can be utilized in new health insurance marketplaces to capitalize on the changes and growth being made in the insurance market.

Tagged , , , , , , , ,

Shopping for Health Insurance: New Coverage, New Market

The first major component of the Affordable Care Act  will go into effect next week, when the online health insurance marketplace opens on Oct.1.

Despite current legislation that passed through the House to defund the Affordable Care Act, state and federal health insurance marketplaces are still on track to open.

The health insurance marketplace is a provision of the Affordable Care Act, ACA, that creates an online marketplace for individuals and small businesses to purchase health insurance plans.

Health Online Insurance Marketplace

“Starting in 2014, all health plans must offer essential health benefits. But the only way to get lower costs based on income is through the Marketplace,” stated the federal health insurance marketplace website, www.healthcare.gov.

Individuals; who do not have health insurance, who previously did not qualify for health insurance, who are unemployed or who are students, will be able to purchase specialized health insurance on the online health insurance market.

The website home page for the online health insurance marketplace.

The website home page for the online health insurance marketplace.

Healthcare.gov will also help individuals determine the best health insurance plan for them based on income levels and health coverage needs, and inform people if they qualify for medicaid or medicare benefits.

The Affordable Care Act left the creation and management of these new health insurance markets in the hands of the state governments. If a state chooses not to create a health insurance marketplace its will become part of the federal government run marketplace.

Health Insurance Plan in Georgia

Georgia’s Gov. Nathan Deal, opted out of creating a state-run insurance marketplace, turning over control of Georgia’s health insurance marketplace to the federal government.

The new marketplace is expected to provide health insurance for 900,000 Georgia residents, reported the Atlanta Journal Constitution. These citizens will use the federal healthcare.gov marketplace to compare and purchase different healthcare plans.

Insurance coverage from plans purchased on the new marketplace will go into effect in January 2014.

Insurance companies will have to spend more to cover the increase in number of people with health insurance plans and the number of people with preexisting health conditions that now qualify for equal coverage.  To cover additional cost many insurance companies will increase their premiums.

Experts predict that though there will be a large increase in the number of people who qualify for health insurance, many of these people will not know how to navigate the new health insurance marketplace. In response to the confusion that health insurance reform has created, there is a demand for advisers to help people navigate through this new system.

The Atlanta AP reported that Georgia will receive $3.8 million to hire people to help individuals navigate the new health insurance market.

The Structured Employment Economic Development Corporation and the University of Georgia’s College of Family and Consumer Sciences and Cooperative Extension Service will receive funds from the grant to train navigators. These navigators will serve as counselors to Georgia residents to help them in understanding the new health insurance marketplace.

Follow-up Report Oct. 21. 

After the opening of HealthCare.gov, the website experienced multiple technical malfunctions that prevented many people from completing applications or making purchases on the online marketplace.  Officials reported more than 19 million people have logged on to the website and close to 500,000 people have filled out applications through both the federal and state-run online marketplace sites, but they are not releasing numbers on the number of people who have successfully purchased a health insurance plan through the website. 

Tagged , , , , , ,