Medicare and Medicaid managed-care provider AmeriHealth Caritas will enter the Affordable Care Act exchange market in 2022, the Philadelphia-based insurer said Tuesday.
AmeriHealth, which covers 5 million lives across 13 states and the District of Columbia, will debut six different ACA health plans at various levels across 25 North Carolina counties during open enrollment this year, which runs from Nov. 1 to Jan. 15. The company said it plans to model its exchange plans on its Medicaid offerings, which place a strong focus on the social determinants of health that affect a patient along with AmeriHealth's care management and wellness programs. AmeriHealth, which was unable to comment by deadline, has recently invested in these models.
At the end of September, AmeriHealth led Wider Circle's $38 million Series B round, indicating a show of confidence for the Redwood, California-based startup's strategy of improving patient health literacy and outcomes through hyperlocal social networks. The investment came from AmeriHealth's social determinants of life arm, which launched at the end of last month and will invest in companies that aim to bridge health disparities. AmeriHealth is the largest shareholder in Wider Circle.
Going forward, the insurer plans to expand its socially focused exchange offerings to other states, and target those transitioning from Medicaid. AmeriHealth's focus on this population represents a smart growth strategy as the economy improves, unemployment benefits end and states begin the Medicaid redetermination process once the public health emergency ends in December, said Glenn Melnick, a professor at the University of Southern California.
"If people transition out of Medicaid because their income goes up as because they're back at work, I think it's a good move by companies who are in that space to think about, 'How do we capture those people that are transitioning?'" Melnick said. "You want to make it as seamless as possible for people, like 'I have the same doctors, I just have a different card.'"
Almost 90%, or 15 million, people who gained Medicaid coverage during the COVID-19 pandemic could get dropped from the program once the public health emergency ends, according to a recent report from the Urban Institute. Researchers estimate one-third of adults who lose coverage could qualify for subsidized private health insurance in the ACA marketplaces.
AmeriHealth is not the only insurer banking on current Medicaid enrollees moving to exchange coverage. This year is set to be the most competitive open enrollment yet, with more than 10 insurers planning to enter new markets for the 2022 plan year and some current participants expanding their footprints, according to data compiled by the consumer guide HealthInsurance.org. The individual market is one of the most profitable lines of business for insurers, second only to the lucrative Medicare Advantage market.
"The easier and less costly you make the search process, the more successful you'll be," Melnick said. "It makes sense that, if there's going to be a transitioning surge, insurers will be figuring out how to transition their current members to their products on the exchange."
But verifying their eligibility for exchange, Medicaid or other insurance will be a huge undertaking since so many people have moved or lost housing during the pandemic and recent natural disasters, the Commonwealth Fund said. The massive number of redeterminations will also test the system, which has historically left people uninsured during major disruptions. Black and Latino individuals will be particularly susceptible to coverage losses, since they represent a large portion of Medicaid enrollees; these individuals disproportionately contracted COVID-19, and suffered economic and social consequences from the pandemic.
"What you need is kind of a transparent handoff system," Melnick said.