Milliman reports a jump in individual insurance enrollment

A recent report from Milliman took a deep dive into Medical Loss Ratio (MLR) data from the past two years and reports on current trends in group and individual insurance. The report examines MLR data from the Centers for Medicare and Medicaid Services (CMS) and analyzes changes going on in the market, as well as the impact of enhanced premium subsidies created by the American Rescue Plan Act of 2021 (ARP).

A jump in individual enrollment

Among the findings in the Milliman report was a significant increase in individual enrollment in the Affordable Care Act (ACA) marketplace during the past two years. “While total reported individual enrollment increased from 13.3 million to 13.7 million from 2019 to 2020, individual enrollment is projected to increase to 15.2 million in 2022, driven by the enhanced insurance marketplace premium subsidies made available for 2021 and 2022 under the ARP,” the report says.

The subsidies for the individual market drove more growth in states that did not adopt the Medicaid expansion offered by the ACA, and therefore had higher rates of uninsured individuals before the pandemic. The report found that non-Medicaid expansion states experienced a 21% increase in ACA-compliant enrollment from 2020 to 2021, while Medicaid expansion states experienced only 3% enrollment growth in the same period.

The CMS data also shows a rebound in insurer-paid claims for 2021 and the first quarter of 2022 in the individual market, as it recovered from reduced health care utilization in 2020 due to the pandemic.

The report notes that the ACA’s enhanced subsidies are scheduled to end on December 31, 2022, unless further extended by Congress.

In the group market, no big surprises

The report finds that enrollment in small and large group insurance markets did not change substantially in the past two years. “While the onset of the COVID-19 pandemic disrupted employment levels in the second quarter of 2020 (non-farm employment decreased by 14% from February 2020 to April 2020), enrollment in the fully insured group markets declined by less than 3%,” the study says.

Related: Adjusting subsidies for younger ACA enrollees could lower costs for all: study

The report adds that in the small group market, enrollment declined from 12.5 million to 11.9 million during this time period but notes that similar declines had been seen in that market in recent years, before the pandemic. For the large group market, enrollment decreased from 41.8 million to 41.0 million from 2019 to 2020 after an increase of .2 million in the period between 2018 and 2019. “Although data for the self-funded employer market is not available, these data points for the fully-insured markets suggest there has not been a material decline in employer-sponsored coverage during the COVID-19 pandemic,” the report says.

The report concludes with an interesting note: marketplace competition was much improved in 2022. “In 2018, 51% of counties had only once insurer offering coverage, relative to only 5% of counties in 2022,” the report says. “With the overall enrollment growth in the individual market, premium rates may have been developed more aggressively to maintain market competitiveness or establish market share for new entrants,” the report says.