Medica plans on growing next year into the individual health insurance markets in Missouri and Oklahoma, bringing to eight the tally of states where the Minnetonka-based carrier expects to sell nongroup coverage.

While many health insurers over the past two years have fled red ink in the individual market under the federal Affordable Care Act (ACA), Medica has grown from its base in Minnesota, North Dakota and Wisconsin into Iowa, Kansas and Nebraska.

Now, as the business is starting to become profitable, Medica is one of about a dozen examples where carriers next year are either returning to the individual market or expanding in new areas, said Cynthia Cox, a researcher at the Kaiser Family Foundation.

"This is almost a complete 180 from where we were this time last year," Cox said via e-mail.

"Last summer we were focused on the dozens of counties that appeared to be at risk of having no insurer on the exchange," Cox wrote, referring to ACA-funded health exchanges where individuals can buy coverage. "Now, we are seeing more than a dozen new entrants and haven't heard of any companies exiting the exchange."

The moves come in the individual market, which consists primarily of people under age 65 who are either self-employed or don't get coverage from their employer. The market has undergone sweeping change with the ACA, which prohibits insurers from denying coverage to people based on pre-existing health problems.

In 2017, Medica posted net income of $146.9 million on $3.72 billion in revenue, for a profit margin of 3.9 percent. Medica still lost money in the individual market last year, but the losses narrowed considerably. That fits with the broader trend of improved profitability for individual market carriers, according to a June report from Mark Farrah Associates, a Pennsylvania-based consulting group.

"The individual segment experienced the most dramatic turnaround, posting an aggregate underwriting gain of $1.7 billion, the first reported gain since segment reporting began in 2010," the report said.

In Oklahoma, Medica plans on selling coverage to individuals statewide starting in 2019. In Missouri, the insurer will sell coverage in three counties that are part of the Kansas City metro area.

In North Dakota, where Medica currently is an option only in the "off-exchange" portion of the individual market, the insurer next year plans on returning to the government-run health exchange for the state. When buying through one of the exchanges, consumers at certain income levels can tap large federal tax credits to subsidize premium costs.

"Opportunities do exist outside of our traditional service area," said Geoff Bartsh, a Medica vice president. "Given some of the disruption created by the Affordable Care Act, we are able to identify and to expand into some new areas where they are really looking for additional choices for consumers."

There's currently only one health insurer selling coverage via the government-run exchange for Oklahoma, Bartsh said, so regulators, health care providers and consumers have been looking for competition. Considering the large population areas of Oklahoma City and Tulsa, the state offers Medica a chance to potentially sell coverage to other customers down the road, Bartsh said, such as employer groups and individuals with Medicare benefits.

In Kansas City, Medica for 2018 established a relationship with a large health care provider on the Kansas side of the border that also operates on the Missouri side, Bartsh said. So, adding the Missouri counties, he said, is a natural extension of that relationship.

In Iowa and Nebraska, Medica currently is the only option on the government-run exchanges for those states. With that status, the insurer "got pretty well known, pretty quick," Bartsh said. "It really allowed us to create some deeper and trusted relationships with providers, with brokers, with regulators."

A second health insurer is coming to the Iowa market for 2019, he said.

Christopher Snowbeck

612-673-4744 Twitter: @chrissnowbeck