Ambetter – Business Overview

What is Ambetter?

Ambetter is a heath insurance provider that is available through the Health Insurance Marketplace (HIM). They are recognized as an Obamacare insurance product in that all Ambetter insurance policies meet the minimum ACA requirements. Ambetter is available in 18 states and is focused on serving the underinsured and uninsured Americans. Services under their insurance policies are provided by the Medicare and Medicaid managed service organizations that their parent company, Centene Corporation, own.

Brief History of ACA and Health Insurance in the US

In the United States, there are only two federal health insurance programs – Medicare and Medicaid. Medicare subsidizes insurance for individuals 65 and over and or who are younger than 65 but qualify on specific eligibility criteria. Medicaid is a health program for low-income families and individuals. It is jointly administered with each state. Those who do not qualify for Medicare or Medicaid can be insured either through their employer or by purchasing private insurance on their own. Private insurance is available through an insurance broker or on the HIM.

On January 1, 2014, the Patient Protection and Affordable Care Act, commonly known as ACA and or Obamacare, came into effect. The goal of the legislation is to provide health insurance to every American. The legislation uses different mechanisms, such as a federal Health Insurance Marketplaces (or exchanges), subsidies, and penalties, to increase the number of people insured.

Prior to ACA, individuals who did not have insurance from their employer and who could not afford private insurance would simply go uninsured. With ACA, individuals who are not insured are charged a penalty fee; this is meant to push uninsured individuals to purchase some form of insurance.
The federal HIM was created to provide a convenient one-stop-shop where individuals can search, compare, and purchase insurance. All policies available on HIM are required by ACA to provide a basic level of coverage for essential health services. Subsidies are also available to qualified individuals and or families who purchase their insurance from a HIM.

Individual states can opt to create and manage their own HIM. States that do not operate their own exchange will default to the federal exchange, Healthcare.gov. Insurance providers can choose whether they want to participate on the HIM depending on the state and county.

Since 2016, repeals have been made to ACA with the most significant change being the repeal of the penalty for those who are uninsured. Furthermore, many insurers have pulled out of participating in HIM in many states for a multitude of reasons. This has resulted in some counties with only one ACA insurer, limiting the choices available to those residents to a single provider and or moving to non-HIM private insurance.

How Does Ambetter Work?

Ambetter provides ACA compliant insurance through the HIM. Individuals can use the Ambetter website to search, compare, and purchase health insurance. The policies are grouped by bronze, silver, and gold and each category meets a different monthly premium and out-of-pocket expenses (deductibles). For example, bronze plans provide lower monthly premiums but higher deductibles whereas gold plans have higher monthly premiums with lower deductibles. Customers can choose the plan best meets their financial and health needs.

All Ambetter policy holders have access to added member benefits such as reward programs and the 24/7 nurse advice line. Programs like the MyHealthPays reward program, incentivize members with reward dollars for participating in health focused activities. These activities are meant to nudge members into healthier lifestyle habits, thus reducing the risk of a catastrophic health event in the future.

Ambetter Business Model

Like most insurance companies in the US, Ambetter is focused on improving profits by managing the cost side of the balance sheet. This is done by leveraging managed service organizations and limiting the types of services available based on the health plan purchased.

Ambetter policies are serviced through a managed service organization within each state. For example, if you are a resident in Arizona, your insurance plan will be serviced by Arizona Complete Health, which is also a Centene subsidiary. Manager Service organization sign on and manage a network of healthcare providers of which the insurance policy holders have access to. They negotiate the fees paid for services and distribute the reimbursement fees to healthcare providers. They also have a team of case managers who oversee policy members and can proactively manage their health.

Ambetter focuses on customers who are underinsured or not insured at all. Their competitors include Cigna, Anthem, Molina, and new healthcare unicorn, Oscar. They are known for being the least expensive option in the market, which poses significant trade-offs. For example, there may be a limited number of service providers available in your area based on your policy. In certain states, Ambetter is the sole provide for ACA policies, which can be increasingly restrictive for someone who cannot afford non-HIM private options.

Ambetter Business Model

Health Insurance in the Bigger Picture

The primary purpose of legislation like Obamacare is to try to decrease rising healthcare costs by increasing the number of insured. Having more people insured means less people going to the hospital and not having coverage to pay for the bills. When hospital bills go unpaid, hospitals recuperate these costs by increasing the fees for services. This increases what managed service organizations must pay the providers, which ultimately increases the cost on insurance for customers.
There are other benefits to having a larger percentage of the population insured. Healthy individuals are more productive and can stay in their jobs for longer, allowing them to continue contributing to the economy. Insurance can also encourage preventative measures, such as more frequent doctor visits. This can reduce the risk of catastrophic health events, which are high in cost. Both benefits work together to provide stronger economy.

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