Four of the top five health insurance companies by market share in the United States are for-profit companies1, but more than 60% of health plans with at least 100,000 enrollees are from nonprofits, and about half of privately insured health plan enrollees are covered by nonprofits2. HealthPocket compared Obamacare premiums from nonprofit and for-profit insurers to determine whether nonprofit or for-profit insurers offered the lowest premiums in each county that used healthcare.gov.
On the Obamacare federal marketplace at healthcare.gov, 60% of insurers are nonprofits, but less than 46% of plans are offered by nonprofits. In most counties where both nonprofit and for-profit insurers offered plans, nonprofit insurers offered the cheapest premiums for metal plans.
Silver plans were the most popular metal plans during the 2015 Obamacare open enrollment period, accounting for 67% of plan selections3. HealthPocket found that nonprofit insurers offered the lowest silver plan premiums in 1,072 of the 1,841 counties where both nonprofit and for-profit insurers offered silver plans, a 58% to 42% advantage over for-profit insurers. For other metal levels, nonprofit insurers offered the lowest premiums in about half of the counties where both for-profits and nonprofits offered plans.
|Metal Level||Total counties where both for-profit and nonprofit insurers offered plans for each metal level||Total counties where nonprofit insurers offered least expensive plans for each metal level||Total counties where for-profit insurers offered least expensive plans for each metal level||Total counties where nonprofit and for-profit insurers both offered least expensive plans for each metal level||Percentage of counties where nonprofit insurers offered least expensive plans for each metal level|
On average, the lowest for-profit and nonprofit premiums were close for bronze, silver, and gold plans. However nonprofits offered 11% lower premiums than for-profit insurers for platinum plans. Among the four metal levels, the platinum plans were the least popular in 2015, making up only 3% of plan selections4. However platinum plans generally pay the greatest percentage of covered healthcare costs for enrollees among the four types of metal plans.
|Metal Level||Average lowest cost premium from for-profit insurer||Average lowest cost premium from nonprofit insurer||Percentage decrease from for-profit to non-profit average|
Nonprofit insurers had lower premiums than for-profit insurers for bronze, silver, and gold plans in most counties that used healthcare.gov. On average the least expensive health plans from nonprofit insurers had lower premiums than the least expensive health plans from for-profit insurers, but the average was only slightly lower for bronze, silver, and gold plans. The least expensive platinum plan premiums from nonprofit insurers were over 11% lower than the least expensive platinum plan premiums from for-profit insurers.
Recently two of the largest for-profit health insurers, Aetna and Humana, announced their merger56. Anthem and Cigna, the two other for-profit insurers in the top five, are also in talks to merge7. Since these mergers of for-profit insurers are expected to reduce competition8, non-profit insurers may have an even greater advantage in future years with lower premium costs.
2015 Obamacare premiums were compared for a 40-year-old individual non-smoker in the 34 states on the federal marketplace at healthcare.gov. Plans on state-based marketplaces were not included in the analysis, nor were off-exchange Obamacare plans, Obamacare catastrophic plans, Medicare plans, short-term insurance plans, and Medicaid plans.
This analysis was written by Jesse Geneson, data scientist at HealthPocket. Correspondence regarding this study can be directed to firstname.lastname@example.org.
1 Evi Heilbrunn. Top Health Insurance Companies. November 5, 2014. US News. http://health.usnews.com/health-news/health-insurance/articles/2013/12/16/top-health-insurance-companies
2 The Value of Nonprofit Healthcare. Alliance for Advancing Nonprofit Healthcare. http://www.nonprofithealthcare.org/resources/AllianceReport-ValueOfNonprofitHealthCare.pdf
3 Health Insurance Marketplaces 2015 Open Enrollment Period: March Enrollment Report. March 10, 2015. ASPE Issue Brief. http://aspe.hhs.gov/sites/default/files/pdf/83656/ib_2015mar_enrollment.pdf
5 Dan Diamond, Aetna Buys Humana for $37 Billion, but Deal Doesn’t Add Up. July 3, 2015. Forbes. http://www.forbes.com/sites/dandiamond/2015/07/03/aetna-buys-humana-for-34-billion-but-deal-doesnt-add-up/
6 Top Health Insurance Companies. US News.
7 Scott Gottlieb. How the Affordable Care Act is Reducing Competition. July 5, 2015. Wall Street Journal. http://www.wsj.com/articles/how-the-affordable-care-act-is-reducing-competition-1436136236
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