Trends in Marketplace Plans: An Early Look at 2017 Coverage

Staff portrait of Kathy Hempstead

Katherine Hempstead, PhD, MA, senior adviser to the executive vice president, leads RWJF's work on health insurance coverage.

Recently, the Robert Wood Johnson Foundation released one segment of the HIX Compare Dataset for 2017. The release contains data for the on-exchange plans that use the healthcare.gov platform. The other segments of the individual and small group market will be released during the remainder of the year. There have additionally been some improvements to the documentation. New data and documentation can be found here.

This early look at the 2017 exchange market finds a few notable trends in plan design. There are fewer plans across the board, and an increasing concentration in
Silver, especially among Medicaid Managed Care plans. The trend toward closed networks continues. Blues and Nationals still lead other carrier types in offering out-of-network benefits, but they have increasingly adopted plans with tiered network designs. Other carrier types have also reduced open network plans but have not widely adopted tiers. The ability to create tiered networks may depend on market power and provider supply. Premium increases were greatest among Blue plans, and Medicaid Managed Care Organizations (MCOs) continued to distinguish themselves from other carrier types by having the lowest premiums and highest deductibles.

The number of plans declined, especially at higher metals, and the share of plans that are Silver increased.

As is widely known, the number of plans declined considerably, nearly 16 percent overall. The number of Silver plans declined the least, 9.6 percent. Higher metals declined the most, with the number of Gold plans declining 41 percent and Platinum plans 64 percent. Catastrophic and Bronze plans declined 17 percent and 21 percent, respectively (Table 1).

In 2017, 75 percent of marketplace plans on the market in these states were Silver, as compared with 70 percent in 2016. The shift to Silver was especially pronounced among Medicaid Managed Care Plans (MMCO) (Figure 1).

“Open” plan designs became more scarce, while tiered plans became more common and more concentrated in PPO and HMO plans.

The trend toward a reducing share of plans with out-of-network benefits continued, as the percent of plans with “open” benefit designs (PPO or POS) declined from 37 percent of all plans in 2016 to 30 percent in 2017. National carriers had the largest decline in the percent of plans with open benefit designs, from 37 percent to 23 percent. Medicaid MCOs have practically no plans with open benefit design.

At the same time, the percent of plans with tiered benefit designs increased from 18 percent in 2016 to 29 percent in 2017. Plans with tiered benefit designs are most likely to be PPOs and HMOs, and this was true in both 2016 and 2017. The percent of PPOs that had tiered benefit designs increased from 21 percent in 2016 to 40 percent in 2017. For HMOs the increase was from 19 percent to 32 percent (Table 2).

Almost all tiered plans were either Blues or national carriers, and both carrier categories saw large increases in the percent of their plans that had tiered benefits. Among Blues, the percent increased from 36 percent to 45 percent, while for National Carriers the share rose from 18 percent to 56 percent.

Premiums

While premiums for Silver plans rose on average 21 percent among these FFM states, there were notable differences by carrier type. For example, premiums rose the most for Blues, by an average of 36 percent, considerably more than other carrier types. For these states in 2017, premiums for Blue plans averaged $382, as compared with $318 for national carriers. In 2016 Blues and national carriers both had an average Silver premium of $280 in these states.

This may reflect the fact that Blues are most likely to be the sole carrier in poorly served markets, giving them considerable pricing power and also responsibility for all of the risk in the market.

Regional carrier premiums, which were the most expensive in 2016, are second highest in 2017, with an average of $342. MMCO carriers are the cheapest by a considerable margin in both years. Provider sponsored health plans had the second lowest premiums in both years.

The average Silver deductible changed very little for most carrier types, but rose about $350 for national carriers. Average deductibles are highest for national carriers and MMCOs.