New report is bullish about continued growth in marketplace competition
This year, there is new activity almost everywhere, with only a small handful of states seeing no change.
Participation in the health insurance marketplace is increasing and the trend is likely to continue, according to a report from the Robert Wood Johnson Foundation.
“The combination of a new administration and a public health emergency may create the momentum needed for historic change,” said Katherine Hempstead, a senior policy adviser for the foundation. “Many state-based marketplaces holding special enrollment periods saw above-average sign-ups and an increased share of younger enrollees. The recently completed open enrollment period was the most favorable in some time.”
President Biden recently announced a special spring enrollment period, along with substantial advertising and promotional support.
Related: Medicaid plans increase competition in ACA marketplaces
“More importantly, the Biden administration has expressed several policies, such as a commitment to expand coverage by increasing subsidies, capping premiums as a share of income and addressing the Medicaid coverage gap,” she said. “In this context, recent participation patterns merit some attention, as they reveal insurer expectations about where the market might go.”
The total number of on-exchange offerings is now 9,144, about 75% of the 2015 high point. For the off-exchange market, the current level of 4,625 is far below the 18,000-plus in 2015. However, there has been significant ramping up of this business over the past several years by all major insurer categories, and the number of off-exchange offerings this year increased by almost 50% compared to 2020.
During the past few years, increased participation has been directed mostly at filling holes created by previous exits, entering underserved markets and piling on in certain hot metropolitan areas. But this year, there is new activity almost everywhere, with only a small handful of states seeing no change. Unlike previous years, even states that run their own exchanges saw changes, as places such as New York, Connecticut and Maryland had new offerings, expansions or returns to the market. Many of these states now have returned to the levels of insurer participation they had at the height of the market in 2015 or 2016.
A disproportionate share of new activity is being directed at states that have yet to expand Medicaid. In non-expansion states, the number of counties with only one offering fell by 70%. Increased participation was particularly focused in Florida, Georgia, North Carolina and Texas, where the number of offerings increased by almost 50%. These four states make up more than half of the enrollment on Healthcare.gov, and all had healthy increases during the recent open enrollment. But with uninsurance rates far above the national average, there is much more room for growth, with potentially millions of new enrollees for Medicaid or the marketplace if the policy environment is right.
“The widespread nature of the increased participation means insurers see the ACA marketplace as a going concern and an increasingly important part of the coverage landscape,” Hempstead concluded. “The ramp-up in off-exchange plans suggests an expectation that the market may grow beyond its current base of heavily subsidized enrollees. Most importantly, the focal point of increased participation shows that insurers are bullish on the prospects that we will take advantage of a rare and important opportunity for significant coverage expansion.
“Insurers have been wrong about the market before. Hopefully, this time business expectations and policy outcomes will align.”
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