An absolute 180 pivot from trying to become a massive MA player to completely divesting their MA book
P&C actuary reporting for duty. Is MA or regular insurance generally more profitable?
Generally, it depends.
The real issue is whether HCSC has enough actuaries and others to work the bids for that many states. Now, if they are already in all the states (and thus have the employees) and this is just more policyholders, then no problem. Surprised that Anthem or UHC aren’t asking to bid on it. Could get a nice war going, though it’s possible they know it’s not all that. From what I’ve experienced, it’s a lot of grunt work (nothing really actuarial about it) for a lot of grunts. Lots of consultants paid by the Feds to churn as much business as they can by asking incessant questions.
Maybe HCSC will take the actuaries and other grunts along with the business, though economies of scale should result in a lot of layoffs.
I was wondering if this is a situation where you need a certain scale to achieve expense efficiencies. If you can’t get that scale, then it’s difficult to get the ROE you need to justify being in that business…?