Marketplace Pulse: Unpacking Increased Participation

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.

Unpacking Increased Participation

Stories about the turnaround in the individual market have become routine. For the third year in a row, there has been increased participation by insurers. For the third year in a row, benchmark premiums have declined, and have declined more in counties with increased competition. Much of this progress has flown below the radar, due to a tough political environment and highly competitive news cycle. So far, these improvements in market fundamentals have not been rewarded with increased enrollment.

The combination of a new administration and a public health emergency may create the momentum needed for historic change. 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. And on January 28, President Biden made a long hoped-for announcement of a special enrollment period on between February 15 and May 15, coupled with a substantial investment in outreach and advertising. 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. In this context, recent participation patterns merit some attention, as they reveal insurer expectations about where the market might go.

A Long Look

Our updated ACA Marketplace Participation Tracker map shows participation trends by major insurer category, parent companies, and individual plans. Over time participation trends have been characterized by three main forces: 1) the relatively steady presence of mostly local players, not-for-profit Blue plans, other regional insurers and provider-sponsored plans; 2) the ascendency of Medicaid managed care organizations (MMCO), which are mostly national for-profit companies, but include some non-profit regional and a scattering of safety net plans, and; 3) the "boom and bust" pattern of the national commercial carriers, who initially went big, left in droves, and since 2019 have been filtering back. The total number of on-exchange offerings is now 9,144, about 75 percent of the 2015 high point. For the off-exchange market, the story is different, with the current level of 4,625 far below the more than 18,000 in 2015. However, there has been significant ramping up of this business over the past several years by all major insurer categories, including MMCOs. The number of off-exchange offerings this year increased by almost 50 percent compared to 2020.

A Few Highlights

With 2,412 on-exchange offerings at the county level, participation by the not-for-profit Blues rose nearly 20 percent this year, easily surpassing the previous high in 2016. One might wonder how Blues plans could increase their marketplace participation very much, since they seem to be nearly ubiquitous, but there were new entries in several states, including Oregon and Utah, a return to the marketplace in Missouri, and additional Blue offerings in a number of places, including Arkansas, Louisiana, Michigan, and Florida. These new offerings are generally HMO-like narrow network plans, suggesting that Blues are preparing for an increasingly competitive market, and that synergies with Medicaid are increasingly important to all insurers.

For national commercial carriers, after a bruising withdrawal, participation did not start to increase again until 2019. But since then, offerings have more than doubled. In addition to the return of United Healthcare, another notable development was a major increase in participation by Anthem, which is now at more than 75 percent of its former level. This year Anthem made limited returns to Indiana and Wisconsin, and had large expansions in Georgia, Kentucky, and Ohio. With the entry of Oscar, Arkansas and Iowa have the first national commercial insurer in their marketplace in years. And while established insurers Anthem, United, and Cigna comprise about two thirds of the national commercial offerings, newcomers Oscar and Bright Health have grown steadily. Bright Health is now in ten states, and Oscar is in nineteen. The MMCO category is dominated by Centene, which has the biggest overall marketplace footprint. This year Centene made their largest single year increase ever, nearly doubling their number of offerings. They made sizable expansions in most of their states, including Arkansas, Florida, Kansas, and Texas, and additionally entered New Mexico and Michigan for the first time.

What’s Different This Year

During the past few years, increased participation has been directed mostly at filling holes created by prior exits, entering very underserved markets, and piling on in certain hot metropolitan areas like Nashville. But this year, there is new activity almost everywhere, with only a very small handful of states seeing no change at all. Unlike prior years, even states that run their own exchanges saw changes, as places like New York, Connecticut, and Maryland had new offerings, expansions, or returns to the market. Many of these states have now returned to the levels of insurer participation they had at the height of the market in 2015 or 2016. 

But 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 seventy percent. Increased participation was particularly focused in Florida, Georgia, North Carolina, and Texas, where the number of offerings increased by almost fifty percent. Texas had a new entry and a large expansion by Centene. Both Oscar and United came to North Carolina, while Cigna, Bright Health, and Centene expanded. Four plans expanded in Georgia. Florida had a new entry and five expansions. These four states together currently make up more than half of the enrollment on, 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. 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.