A season of tumultuous changes was capped off by the recent announcement that the Administration would immediately suspend payments to carriers for cost sharing reductions (CSRs). This announcement gave rise to a hurried set of re-filings so that all states could “load” the CSR costs onto the silver premiums. There is no way to protect against the loss of CSR payments in 2017, which carriers will have to endure in the short run. While there is still the potential for exit, as of this writing it appears that there will be at least one insurer serving every county in marketplaces established through the Affordable Care Act (ACA).
But it has certainly been a tough season. The percentage of counties with only one carrier increased notably, from about one-third in 2017 to close to one-half for 2018. About one-fourth of the population lives in a county that will be served by one carrier. Most market-watchers know that exits exceeded entries, by a large factor. Approximately 1,500 county level marketplace exits were announced in advance of the 2018 plan year, as compared with only about 200 entries. Yet at the same time it could be argued that progress toward a stable and healthy equilibrium is currently quite tentative.
Measuring Winners and Losers
State Participation: Most States Saw at Least Some Change
One useful way to measure participation is to look at the net change in the number of carriers at the state level. Another is to think about what is happening inside states, in terms of the net number of county-level entries and exits. By combining the two, we can provide a useful scale to roughly assess how much change took place.
By this measure, for 2018, about 40 percent of states will have as much or more carrier participation as they did in 2017. More specifically:
- Two states actually gained a carrier (New Jersey and Alabama)
- 18 states reported no change
- 20 states had a moderate reduction in carrier participation
- 11 states had a major change
Painting With a Broad Brush
Yet this measure paints with a broad brush. For example, Wisconsin lost three carriers this year, but still has more than any other state except New York. By the same token, some states that reported no change in fact had no carriers to spare, having bottomed out in prior years. While many well-performing markets, such as Washington, D.C., New Mexico, and Connecticut, saw continued participation from all of their carriers, other states with similar characteristics lost carriers, for example Maryland, Massachusetts, and New Hampshire.