Even with a potentially devastating court case hanging over the Affordable Care Act, health insurers say they are expanding coverage options to new markets thanks to an improving financial performance.
Oscar Health, which made its name as a startup focused on providing Obamacare coverage, last week was the latest health insurer to announce improving profits and future expansion of health benefits under the ACA in 2020 and beyond.
“Oscar is committed to expanding our footprint so we can offer our tech-driven, consumer-facing health insurance to more people across the country,” Oscar said after the insurer reported its enrollment grew to 255,000 while its underwriting profit increased nearly 5% to $ 81.7 million in the first quarter of this year.
Oscar’s expansion strategy and similar moves by other insurers comes despite the Donald Trump White House’s efforts through the U.S. Justice Department to invalidate the entire ACA. Earlier this month, the Justice Department filed a formal request to strike down the law, which expanded health insurance coverage to more than 20 million Americans.
But health insurer business strategies are becoming more aggressive as the market stabilizes in part because of price increases and Democratic control of the U.S. House Representatives, which has vowed to fight Trump’s and Republican efforts to strip away the ACA’s patient protections, particular those with pre-existing medical conditions. Oscar has expanded its individual and small business coverage over the years into 14 markets in 9 states and has another market in its sights for 2020, according to reports.
“There are regulatory requirements with which we need to comply and licenses we need to obtain in order to operate in new markets,” Oscar said in a statement. “These new entities are merely preparatory and, pending approval, we will announce our 2020 footprint and the products we will offer in each market later this year.”
Oscar is the latest insurer to talk about expanding into new individual markets under the ACA. Centene, the biggest provider of Obamacare, operates in 20 states and regularly talks about future expansion. Centene’s proposed acquisition of WellCare Health Plans could also be a beachhead for expansion into new markets.
Other insurers are also looking at returning to markets they left. Molina Healthcare last month said it plans to expand its business under the ACA next year.
“Our marketplace business continues to perform well,” Molina CEO Joseph Zubretsky told analysts on the company’s first quarter earnings call. “Recall that for the 2019 underwriting year, we took a conservative rating posture to maintain our attractive margin position. We now have a scaled and profitable business that we plan to grow in 2020 and beyond.”