Report: In Age Of Reform, Insurance Companies Bet On Public Plans Instead Of Commercial

In the age of healthcare reform and hospital consolidation, insurers have begun to hone in on taxpayer-funded plans to shore up revenue. Modern Healthcare takes a look at the SEC filings for some of the nation’s largest payers, finding that “the industry is creatively maneuvering into new lines of business.”

The federal exchange market has proven to be volatile, and the ever-growing hospital systems are being accused of rate hikes. According to the report, Aetna dropped its commercial revenue from 76 percent in 2009 to 58 percent in 2014. Its Medicare and Medicaid revenue shot up from 24 percent in ’09 to 42 percent five years later. UnitedHealthcare showed similar trends, boosting its reliance on public plans by 10 percent in those five years and dropping its commercial from 50 percent to 36 percent.

In 2015, federal spending on healthcare shot past Social Security for the first time ever. As Modern Healthcare notes, these trends—including Medicaid expansion and the federal exchanges—have fueled tremendous growth in Medicare Advantage plans and Medicaid managed care. For the insurance companies, it appears easier to bet on revenue from the government programs than the volatility of the private market.