A.M. Best Special Report: Health Insurers Withstand Affordable Care Act Impact, But New Uncertainty

A.M. Best press release ---- In healthcare news ---- U.S. health insurance companies remained profitable in 2016 as net income improved to $9.4 billion at third-quarter 2016 compared with $8.7 billion in the same prior-year period, despite the negative impact for many plans from the health exchange marketplace. According to A.M. Best's 2017 Review/Preview special report, a majority of carriers remained profitable in other segments, particularly employer group, Medicare Advantage and Medicaid, which helped to offset weak earnings from the exchange line of business. According to the report, titled, "Health Insurers Withstand the ACA Impact, But New Uncertainty Looms," some of the issues stemming from Patient Protection and Affordable Care Act (ACA) include: changing rules; failing plans, particularly the consumer operation and oriented plans (CO-OPs); higher utilizers of treatments on exchanges; fewer healthier and/or younger exchange enrollees; numerous exchange market exits by plans; large losses from the exchange line of business; and lower levels of risk-adjusted capitalization. A.M. Best expects the exchange business to remain a drag on earnings in 2017. Coupled with uncertainty surrounding the potential repeal and replacement of the ACA, A.M. Best believes that many of these pressures could result in negative rating actions on health insurers. For more information click on the picture below to read the A.M. Best press release.