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How 4 Healthcare Payers Fare in 2016’s Health Insurance Market

Despite the volatility in the health insurance market this year, a number of national payers have succeeded with value-based care and provider engagement.

By Vera Gruessner

The health insurance market has gone through significant changes in 2016. A number of payers have pulled back from the health insurance exchanges such as UnitedHealth and Humana. The Department of Justice has also filed lawsuits against the mergers between Anthem-Cigna and Aetna-Humana. Additionally, the recent presidential election has left the future of the Affordable Care Act uncertain. Below we outline how four major payers have fared the volatile health insurance market in 2016.

Health Insurance Exchange

Blue Cross Blue Shield of Michigan

The health insurance market has faced continually rising healthcare spending, which has led payers toward adopting value-based care reimbursement. For example, the 2016 Employer Health Benefits Survey from the Henry J. Kaiser Family Foundation shows that employer-sponsored family health coverage grew to $18,142 in 2016, which is a 3 percent rise from last year. Blue Cross Blue Shield of Michigan is one payer that has steadfastly moved forward in value-based care reimbursement to put a dent in these rising prices.

One of the challenges Blue Cross Blue Shield of Michigan faced in transitioning to value-based care includes setting the right prices for health plans on the public health insurance exchanges, explained David A. Share, M.D., the Senior Vice President for Value Partnerships at Blue Cross Blue Shield of Michigan. The uncertainty around pricing health plans revolve around unpredictable risk pools on the exchanges and what prices their competitors will establish.

“Having products that were priced fairly and competitively under conditions of uncertainty was also complicated,” Share told “By the time you committed to a product portfolio and pricing, others have also and then it becomes known. In a marketplace where that information comes after the fact, it’s a bit harder to know how to price things in a way that will be sustainable in the long run and fair or reasonable.”

READ MORE: Top 3 Predictions for Health Insurance Industry News in August

One of the main strategies that Blue Cross Blue Shield of Michigan used to successfully transition to value-based care reimbursement involves both provider engagement and consumer engagement, said Dr. Share.

“We’ve known from the start that having health plans simply tell people what to do doesn’t engage them very much,” Share continued. “If we just told the provider community what they need to do, they’d do what they had to but they wouldn’t do the very most. By partnering with them in 2004 to envision a more effective health system and then to transform reimbursement to a value-based approach to support that, that created a lot of trust and a lot of engagement.”

“In the last year, we’ve grown in our understanding that the same principle applies to the members or consumers,” Share added.

Aetna and Humana

Last year, the companies Aetna and Humana announced they would complete a merger to create a bigger health insurance entity. However, a wave of criticism came forward regarding the merger including potential harm to competition in the health insurance market and negative implications for consumers.

READ MORE: How Payers Could Compete in Midst of Health Insurance Mergers

Both the American Medical Association and the American Hospital Association opposed the health insurance merger between Aetna and Humana. The biggest challenge that Aetna and Humana have faced regarding their merger this year is the lawsuit filed by the Department of Justice blocking the consolidation.

Aetna and Humana, however, have not backed down and have spoken out in favor of the health insurance merger. The legal defense filings from Aetna and Humana claim that the merger would assist “millions of Americans” by bringing more affordable health plan options for seniors and low-income individuals.

The legal defense argues that the merger would spread greater innovation between the two payers and reduce costs that could be passed down to consumers. The future for the health insurance merger between Aetna and Humana will depend on the outcome of the Department of Justice lawsuit.


Over the last year, many payers have struggled to make a profit on the health insurance exchanges. The challenges standing in the way of profit on the exchanges involve a higher risk pool than anticipated and a much larger member base than in prior years. However, the insurer Cigna has employed a number of strategies that has allowed the payer to continue operating through the health insurance exchanges.

READ MORE: Key Strategies for Transitioning to Value-Based Care Payments

Cigna has partnered with its subsidiary QualCare Alliance Network Inc. and adopted data analytics systems this past summer in order to reduce wasteful spending and boost patient outcomes among their enrollees. Cigna uses data analytics technology to improve their relationship with their provider network. Provider engagement was a key strategy for cutting wasteful spending and leveraging more revenue through the exchanges.

“Cigna is a global organization and, as we look at relationships starting with the people who buy our products - employers, employees, and family members - one of the things we’ve identified is that it’s vital to build stronger relationships with the providers of care. They’re the closest to the patient experience,” Mike Koehler, Market President for Cigna South Texas, told

“As we have evolved our relationships with physicians and hospital systems over the years, we’ve looked at trying to find partners who speak the same language that we do around producing higher value, better outcomes, and more cost efficiency.”


Dig Deeper:

How Health Insurance Mergers Could Change the Payer Industry

How Payers Could Succeed in ACA Health Insurance Exchanges


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