Public Programs Provide Stability for Commercial Insurers

Posted on  December 13, 2017


The top five commercial insurers in the United States are UnitedHealthcare, Anthem, Aetna, Cigna, and Humana. Medscape reports these insurers make up 43% of the nation’s population with health insurance coverage. New research has shown that these providers are becoming more reliant on public programs to provide stability. Their profit and growth are becoming more dependent on programs like Medicaid and Medicare. Medscape found reports from Cathy Schoen of the New York Academy of Medicine, showing that these programs make up “nearly 60% of the healthcare revenues” for these top five.

Commercial insurers replace their losses that were present in the past individual market by revenue generated by public programs. The introduction of The Affordable Care Act and its reimbursement programs have made it possible for commercial insurers to increase their income. The result of the changes from the ACA is the lack of presence from commercial insurers in their individual marketplace. This lack of access makes it difficult for people who do not benefit from public programs to seek coverage.

There might be hope if the government at the federal and state level create a policy that requires commercial insurers to increase their presence in both. This would benefit people on both sides of the issue. It would provide more useful insurance for everyone. It would also decrease the number of poor insurance providers in the individual market.

Policy surrounding commercial insurers similar to this is present at some state levels. Medscape reports that both Nevada and New York have a policy like this in place. These states have seen increases in the presence of commercial insurers in the individual marketplace. This helps people who are seeking coverage have better access to quality insurance.

There has also been a policy set in place by CMS and the ACA on the federal level. Policies like the Basic Health Program aim to help those, who do not qualify for public programs, get coverage. The plans aim to find coverage that is similar to public programs like Medicaid. This is supposed to help people who fall in the middle. They are somewhere between being able to afford coverage and qualifying for public programs.

There is an effort of both the state and federal level to help decrease the reliance that commercial insurers have on public programs. This effort will continue through efforts by CMS and the ACA to help even out the playing field. More state-level governments are looking into policies similar to that of Nevada and New York.

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