Almost without exception, 2010 was a year full of challenges. Still, Texas health insurers continued to enjoy relatively stable numbers throughout 2009 and the first three quarters of 2010. In fact, the industry enjoyed its usual annual increase in premium revenue, which rose from $32.6 billion in 2008 to $34.8 billion in 2009, according to a report published by the Texas Department of Insurance in December 2010. So, in a time of turmoil for many sectors of the insurance industry, how has Texas' insurance market managed to come out on top?
The carrier marketplace
This strong showing may in part be due to a healthy level of competition in the marketplace. There are nearly 500 carriers across the state of Texas, six new to the market in 2009 and one in 2010. Among these, the different submarkets are well served:
- 31 carriers write coverage for small employers
- 49 carriers write coverage for large employers
- 37 carriers write non-employer coverage for members of associations
- 96 carriers write coverage for individuals and families
And yet, there are new market gaps that must be filled: Three carriers filed their intent to withdraw from the health insurance market in 2009 and 2010, affecting nearly 200,000 insured state residents. (In the case of Unicare Life and Health Insurance Company and Unicare Health Plans of Texas Inc., which insured a combined 187,000 people, arrangements were made for another company to offer coverage on a guaranteed issue basis.) A withdrawal proposal filed by Prudential Life Insurance Company is currently pending, and will leave an additional 70,000 consumers without insurance.
Trends in coverage
A range of more affordable products and plan types served to meet consumer needs over the past 12 months. Specifically, consumer-choice plans continued to grow in popularity, with enrollment numbers increasing from 362,655 insured in 2008 to 408,361 in 2009. These plans provide less costly insurance coverage for individuals and businesses, and have been part of the product offering in Texas since the legislation to approve them was passed in 2003.
The state's Medicare, Medicaid, and the Children's Health Insurance Program (CHIP) have also seen steady increases in their rolls in the past two years. Across all carriers, premiums rose by $1.5 billion from 2008 to 2009, with sales in 2009 totaling $12.1 billion.
More generally, self-funded coverage constituted the largest market share in the past year, although participation was fairly evenly split among the four primary coverage options:
- 21.3 percent are fully insured through private coverage
- 24.0 percent receive publicly funded coverage
- 28.5 percent have self-funded coverage
- 26.1 percent are uninsured
Among those in the private insurance market with full coverage, enrollment in HMO plans continued to decline: Just 14.8 percent of consumers participate in these plans, while 54.7 percent have coverage with a PPO plan, and an additional 33.4 percent are fully insured under a different type of coverage, such as an indemnity, fee-for-service, or limited benefit plan.
