The Affordable Care Act hasn't been a boon to health insurers' bottom lines, despite ushering in millions of newly insured individuals, an analysis found.
Fully insured health plans grew their revenue by 55% to $849 billion between 2011 and 2016, as enrollment ballooned to 184 million members, up by 41 million since 2011, according to a Deloitte study of more than 200 health plans.
But underwriting gains fell 29% to $13.6 billion over the same period. And health plans' underwriting margins also sunk to 1.6% on average in 2016 from 3.5% in 2011.
"Despite some perceptions to the contrary in the public debate, in most cases insurance companies have not profited as a result of the ACA," Greg Scott, principal at Deloitte Consulting and U.S. health plan leader, said in a statement. "The data show just the opposite: The vast majority of plans have seen difficult times since 2014."
Deloitte studied the fully insured books of business for 238 U.S. health plans. That includes commercial group, commercial individual, Medicare Advantage and Medicaid managed-care businesses. In 2016, 63% of Americans with health insurance coverage were enrolled in fully insured health plans, according to Deloitte.
Beginning in 2014, when the ACA took effect, nearly half—49%—of health plans reported underwriting losses on their fully insured books of business. That continued into 2015. While fewer plans reported underwriting losses in 2016, the number that did remained much higher than in pre-ACA years.
Not all plans suffered losses. The three largest fully insured health plans by revenue, which were UnitedHealth Group, Kaiser Foundation Health Plan and Anthem, together posted underwriting gains of $11.5 billion in 2016, accounting for 84% of all fully insured underwriting gains that year.
That's because of the large losses suffered by many other health plans, particularly in ACA commercial individual products, Deloitte said. Ninety-two health plans recorded underwriting losses in 2016.
According to the report, for-profit health plans posted much higher margins than not-for-profit insurers. For-profit health insurers' underwriting margins fell to 2.5% in 2016 from 4.8% in 2011. Meanwhile, underwriting margins for not-for-profit health plans were 0.8% on average in 2016, down from 2.3% in 2011.
An edited version of this story can also be found in Modern Healthcare's Dec. 4 print edition.
