Marketplace Pulse: A Long Look at the Individual Market

The Marketplace Pulse series provides expert insights on timely policy topics related to the health insurance marketplaces. The series, authored by RWJF Senior Policy Adviser Katherine Hempstead, analyzes changes in the individual market; shifting carrier trends; nationwide insurance data; and more to help states, researchers, and policymakers better understand the pulse of the marketplace.

The seventh open enrollment season is almost upon us, and all signs point to growing stability, as measured by moderate premium increases and increased participation by health plans. The ACA Marketplace Participation Tracker shows the change over time in participation at the county level, and allows users to follow individual companies or categories of health insurers. The data reveal a business narrative that has been closely intertwined with the political story of the Affordable Care Act (ACA) marketplace.

A key element in the story is over-entry and underpricing in early years, which resulted in major exits, including the virtual elimination of the ACA co-ops and a significant retreat among the national commercial carriers. The market hit bottom in 2018, when massive exits created threats of bare counties and premiums soared, especially in rural areas. Medicaid Managed Care Organizations (MMCOs) expanded to fill holes. These setbacks had many causes, and they contributed to ongoing political rhetoric about the impending demise of the exchanges. Yet by this time, many existing market participants, including a number of Blue plans, had begun to report improved financial results. In 2019 there was some modest entry, mostly by the MMCOs, but also a few new national carriers—Oscar and Bright Health. Some of the states with the most uncompetitive markets saw improvement. For example, Iowa's Blue plan returned to the marketplace, and Medica entered the entire state of Oklahoma. Large margins, as seen in recently released Medical Loss Ratio (MLR) rebate figures, attracted additional entry.

For 2020, the trend toward greater issuer participation has continued. Centene, Oscar, and Bright Health have announced large expansions. A few Blue plans have increased their territory, along with Cigna and Anthem. Based on the expansions for which county-level information is available, the number of one-carrier counties will decline by at least 13 percent in 2020. The final figure will be somewhat larger when all of the plans release the full extent of their expansions.

A look at these trends by carrier type shows a mix of stability and change. For Blue and regional carriers, issuer presence in 2020 is close to what it was in 2015, and has not changed all that much in the intervening years. On the other hand, the ACA Co-ops are essentially gone. For national carriers, there has been a huge retreat. Major players like Humana, Aetna, and United, are either completely or almost completely out of the market, while Cigna and Anthem have a much-reduced footprint. Oscar and Bright Health—new entrants to this category—have driven much of the recent expansion. The MMCO category is the only one for which market participation has grown every year, and Centene has become the largest single issuer in the marketplace.

Stability has not been a major theme in the story of the ACA marketplace, but since 2018, premium growth has slowed and issuer participation has increased. While enrollment has trended down somewhat in recent years, health plans seem newly interested in participating. It is too soon to say whether this marks the establishment of some type of equilibrium, but with flat growth in the employer segment and the potential opportunity presented by the Health Reimbursement Arrangement rule, the individual market may become increasingly attractive.

Data note:

We acknowledge the contributions of Joanna Seirup from Vericred, RWJF summer intern and JHU senior Josh Choe, and Elise DeMeo of RWJF. Full participation data in CSV form as well as data documentation are available to download on the tracker site. County-level for 2020 data is preliminary and subject to change as new information becomes available. We appreciate user feedback that helps us improve the quality of these data. Please contact Katherine Hempstead at khempstead@rwjf.org.