The tectonic plates continue to shift underneath the health insurance market. Ten years ago, most medical carriers were predominantly “risk-bearing” entities – taking in premium dollars and in return, paying claims. But as those claim dollars rose and the Affordable Care Act (ACA) introduced additional fees to the insurance market more employers moved towards self-funding, with their sole layer of insurance protection being purchased from the reinsurance market – protecting against large claimants and aggregate claims exceeding various thresholds. The demand for reinsurance has almost tripled in only six years, pushing the market from a $6-billion industry pre-ACA to a now $17-billion one.
Increasingly more carriers, reinsurers, ancillary vendors and traditional medical insurers have looked towards the market as an opportunity for growth. And now Anthem is officially planting its flag. Beginning in July of this year, Anthem will begin to offer “unbundled” reinsurance, intended to compete with traditional stalwarts like Sun Life, Voya, Symetra and Tokio Marine. The 25-person team is targeting all national reinsurance business, though presumably they’ll have a natural sales pipeline from in-force BlueCross BlueShield business.
It is critical for all self-funded clients to understand who the players are and where the opportunities lie in strengthening the terms and pricing of these contracts. Too often, we confront complacent clients and brokers who are not aware of how vast the market is – leaving much more favorable terms on the table. Anthem will be a welcome addition to what has quickly become a very crowded space.