Medica plans on growing next year into the individual health insurance markets in Missouri and Oklahoma, bringing to eight the tally of states where the Minnetonka-based carrier expects to sell nongroup coverage.
While many health insurers over the past two years have fled red ink in the individual market under the federal Affordable Care Act (ACA), Medica has grown from its base in Minnesota, North Dakota and Wisconsin into Iowa, Kansas and Nebraska.
Now, as the business is starting to become profitable, Medica is one of about a dozen examples where carriers next year are either returning to the individual market or expanding in new areas, said Cynthia Cox, a researcher at the Kaiser Family Foundation.
"This is almost a complete 180 from where we were this time last year," Cox said via e-mail.
"Last summer we were focused on the dozens of counties that appeared to be at risk of having no insurer on the exchange," Cox wrote, referring to ACA-funded health exchanges where individuals can buy coverage. "Now, we are seeing more than a dozen new entrants and haven't heard of any companies exiting the exchange."
The moves come in the individual market, which consists primarily of people under age 65 who are either self-employed or don't get coverage from their employer. The market has undergone sweeping change with the ACA, which prohibits insurers from denying coverage to people based on pre-existing health problems.
In 2017, Medica posted net income of $146.9 million on $3.72 billion in revenue, for a profit margin of 3.9 percent. Medica still lost money in the individual market last year, but the losses narrowed considerably. That fits with the broader trend of improved profitability for individual market carriers, according to a June report from Mark Farrah Associates, a Pennsylvania-based consulting group.
"The individual segment experienced the most dramatic turnaround, posting an aggregate underwriting gain of $1.7 billion, the first reported gain since segment reporting began in 2010," the report said.
