Cigna Corp. CI has announced an expansion of its plan offerings on the Affordable Care Act’s insurance exchanges, branching out into additional counties across three states for 2022.
The expansion brings the total number of states offering Cigna ACA plans to 13 in 313 counties.
Cigna is already one of the top providers of ACA plans, other companies being UnitedHealth Group Inc. UNH, Centene (NYSE:CNC) Corp. CNC, Molina Healthcare (NYSE:MOH), Inc. MOH among others.
Earlier this month, another health insurer Oscar Health announced that it will expand Obamacare to three new states in 2022.
In 2021, the ACA Marketplace entered its eighth year of operation. It became operational in 2014 as part of the Obamacare Care Act, which was enacted in March 2010 by the then President Barack Obama. The purpose of these online exchanges was to make health plan shopping more transparent and cost effective for Americans. Insurers offered their plans on these exchanges and had varied experiences with regard to profitability of the businesses conducted on these exchanges.
In the years 2016 and 2017, insurers suffered losses from policies sold on ACA exchanges as the claims paid to the concerning patients outweighed the premiums collected from them. Thus many insurers scaled back their offerings from these exchanges in recent years.
Insurers were also skeptical about ACA marketplace business due to constant attempts by the former president Donald Trump to uproot the ACA. Trump took numerous actions to discourage enrollment in the marketplaces, which dwindled insurance sales in the ACA marketplace. By one estimate, Trump’s actions resulted in 500,000 fewer people enrolling in coverage for 2017.
The ACA marketplace now got a new lease of life with the current President Joe Biden fully backing the ACA and the online exchanges. In fact, after holding the reins of the government, the first major move he made to expand health insurance was to open a special enrollment window and give special subsidies to induce Americans to buy an insurance coverage.
In June, the ACA survived the Supreme Court ruling for the third time
With the ACA getting a constitutional validation and the healthcare law gaining full support from administration, insurers are now looking to expand their business on exchanges.
Cigna’s products on exchanges will carry features like $0 virtual wellness screenings with board-certified MDLIVE doctors via video, affordable copays ranging from $0 to $3 for preferred generics and an access to Cigna's Patient Assurance Program, coverage for holistic services including acupuncture in select counties.
Customers can purchase Cigna’s policies during the 2022 Open Enrollment Period (OEP) that begins Nov 1, 2021. The Open Enrollment close date varies from state to state. Health plans bought within Dec 15, 2021 during OEP are effective Jan 1, 2022.
An expansion on ACA exchanges will increase enrollment and aid the company’s top-line growth. In a year’s time, the stock has gained 17.6% compared with its industry’s rise of 28.3%.
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The stock carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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