United Hospital Fund Analysis Finds That Insurance Plans Specializing in Public Programs Were the Fastest Growing in 2012
Snapshot Captures the Market Just Before Implementation of Most Components of the Affordable Care Act
Health insurance plans in New York that specialize in public programs like Medicaid and Child Health Plus (Prepaid Health Services Plans) grew dramatically in 2012 in terms of enrollment, revenue, net income, and overall market share, according to the fifth installment of the United Hospital Fund’s Big Picture, a series of yearly reports that highlight enrollment and financial results in New York’s public and private insurance markets. Underscoring this growth, three Prepaid Health Services Plans reported revenues of over $2 billion in 2012.
The Big Picture V: New York’s Private and Public Insurance Markets, 2012 provides a snapshot of New York’s health insurance market just before most components of the Affordable Care Act were implemented. Prepared by Peter Newell, director of the Fund’s Health Insurance Project, and Allan Baumgarten, a consultant, the report provides analysis of detailed health plan data filed with State and federal regulators, in order to track structural shifts and trends. (Earlier editions in this report series include health plan data going back as far as 2001.)
The report’s authors point to the growth in Prepaid Health Services Plan revenues—spurred by new enrollment and the inclusion, or “carve-in,” of the drug benefit for Medicaid managed care—as key in growing overall operating revenues for New York health plans from $48 billion in 2010 to $55.7 billion in 2012, about a 16 percent increase over the two years. A big factor in the increase was the growth of Medicaid managed care enrollment by 17 percent from 2010 to 2012, with the two largest Prepaid Health Service Plans, Fidelis Care and HealthFirst, adding over 180,000 and 100,000 members, respectively.
Over the same period, fully insured commercial group coverage declined, with some of the loss likely attributable to employer groups switching to self-funded arrangements, according to the report. UnitedHealthcare companies moved to the top spot among all health plans in market share by premiums and maintained their lead in employer-based coverage, cemented by small group market enrollment that reached 800,000 in 2012, nearly all of it though its two Oxford subsidiaries.
While, from 2011 to 2012, profits, or “net income,” for commercial health plans declined from $1.43 billion to $1.2 billion, the successful year for Prepaid Health Services Plans ($504.8 million in net income) pushed overall net income for New York health plans to $1.7 billion in 2012, a roughly $200 million increase over 2010.
“This report captures New York’s health insurance marketplace in transition,” said Peter Newell, director of the Fund’s Health Insurance Project and lead author. “While commercial group coverage continued its gradual decline and HMOs reported fewer than 20,000 commercial individual members in 2012, Medicaid plan enrollment grew by over 300,000. The successful launch of New York’s health insurance exchange is expected to add new membership of more than a million individuals enrolled through the marketplace in Medicaid, CHIP, or qualified health plans. Exchange members are enrolling in existing plans, new market entrants, and Prepaid Health Services Plans, which are playing an increasingly important role in New York’s market. All these factors make these numbers especially relevant.”
“It’s important to bear in mind that we are undergoing a sea change in health care, especially in health insurance,” said Jim Tallon, president of the United Hospital Fund. “New York has tapped major new resources to streamline enrollment and put coverage within reach of the uninsured, and we are simultaneously grappling with a range of system changes and policy challenges related to State and federal reforms. This snapshot from 2012 should help frame and inform future discussions.”
About the United Hospital Fund: The United Hospital Fund is a health services research and philanthropic organization whose primary mission is to shape positive change in health care for the people of New York.