Washington, DC (PRWEB) April 30, 2014
New York’s small-group insurance market could be an example of the Affordable Care Act’s success in drawing new competitors, and luring back former players, to health insurance markets. But one existing competitor isn’t very happy with the resulting rate-setting practices. The April 28 issue of Atlantic Information Services, Inc.’s (AIS) Health Plan Week (HPW) covers UnitedHealthcare’s reaction to the increased competition in this health insurance market.
UnitedHealth Group told investors that during the first quarter, it saw “intensified pricing in several markets, including small group in New York, a large market for us,” according to CEO Stephen Hemsley. Speaking during an April 17 conference call to discuss first-quarter 2014 financial results, he said, “We believe several carriers there, including new entrants, are pricing well below cost and what we would view as unsustainable pricing levels.” The insurer warned that if the situation continues, it could affect United’s risk-based membership level — but not its profitability, as the insurer is not adjusting premiums to compete with the other carriers.
Jeff Alter, CEO of UnitedHealthcare’s Employer and Individual business unit, pointed to two factors: (1) “New entrants into that marketplace that in our opinion clearly underpriced what the cost structure is in New York — not only our cost structure but certainly their cost structure,” and (2) “Competitors that have left the New York marketplace that chose to re-enter the marketplace in January ‘14.” Those players also “underpriced for what the economics would call for,” he said.
Kyle Kautzmann, GBA, an insurance broker with EBNY Insurance Services, Inc., confirms to HPW that “the new players are definitely undercutting [the market].” But, he says, that existing players also are changing plans to comply with the Affordable Care Act, so premiums are going up overall. “I think Oxford [a UnitedHealthcare subsidiary] is still going to get lot of the market.” Overall, United has the leading share of New York’s commercial risk membership, according to AIS’s Directory of Health Plans: 2014, taking more than 33% of the market share.
Visit http://aishealth.com/archive/nhpw042814-04 to read the article in its entirety, which includes a table based on data from AIS’s Directory of Health Plans, ranking the top 10 health plans in New York’s commercial risk market.
About Health Plan Week
Published since 1991, the 8-page weekly newsletter Health Plan Week provides timely, objective business, financial and regulatory news of the health insurance industry. Coverage includes new benefit designs and underwriting practices, new products and marketing strategies, mergers and alliances, financial performance and results, Medicare and Medicaid opportunities, disease management, and the flood of reform-driven regulatory initiatives including medical loss ratios, exchanges, ACOs and myriad benefit design changes that are mandated. Visit http://aishealth.com/marketplace/health-plan-week for more information.
About Atlantic Information Services
Atlantic Information Services, Inc. (AIS) is a publishing and information company that has been serving the health care industry for more than 25 years. It develops highly targeted news, data and strategic information for managers in hospitals, health plans, medical group practices, pharmaceutical companies and other health care organizations. AIS products include print and electronic newsletters, websites, looseleafs, books, strategic reports, databases, webinars and conferences. Learn more at http://AISHealth.com.