Katherine Hempstead, who directs the Robert Wood Johnson Foundation's work on health coverage, said the data will prove valuable in helping everyone think about the individual market as a whole. “It's important for us to understand how the off-exchange market helps or hinders the exchange market, and whether any improvement is feasible to organize the two components and make it easier for consumers to see what's available,” she said.
A number of insurers such as Aetna are exiting the exchanges in some states while continuing to sell off-exchange products in those same markets. An Aetna spokesman declined to discuss details of the company's off-exchange business. But he said Aetna is maintaining an off-exchange presence to preserve its option under federal law to re-enter the exchange markets after 2017 “should there be meaningful exchange-related policy improvements.”
A Commonwealth Fund study in June projected that insurers selling only off the exchanges in 2016 spent more on administration and profits and had higher premium increases compared with insurers that sell mostly on the exchanges.
The new RWJF data set includes comprehensive information on all individual and small-group plans offered nationally, including carrier, location, premium, metal tier, type of plan, and deductible and copayment levels. But it does not include information on number of plans sold or any information about the people buying these plans, such as age, income or health status. While some observers have speculated that people buying coverage outside the exchanges are healthier and wealthier than exchange customers, the data don't answer such questions.
“I hear insurers say the markets are more similar than different, and I think insurers have lost money in the off-exchange market,” Hempstead said.
Experts say there are a variety of reasons why consumers buy coverage outside the exchanges, where they cannot receive an ACA premium subsidy or cost-sharing reduction. The Obama administration and many experts say most people in the individual market would be better off buying coverage on the exchanges because most qualify for subsidies. In contrast, some conservative analysts favor allowing premium subsidies for coverage purchased outside the exchanges.
One reason some consumers go off the exchanges is that they find it simpler to buy a plan directly from an insurer or through a broker if they think they don't qualify for a subsidy. “It's easier to move through the process off the exchange, so convenience is a factor,” said Joel Ario, managing director of Manatt Health Solutions, who helped establish the federal exchange as an Obama administration official.
Some customers avoid the exchanges because they are politically opposed to Obamacare, said Nate Purpura, vice president of communications for eHealth, an online broker. About half the 261,000 individual plans eHealth sold from October through March were through the exchanges and about half were off the exchanges.
Consumers looking for a broader provider network or access to their regular physician or hospital may have an easier time finding such a plan off the exchange, since PPO and POS plans are more prevalent outside the exchanges, Hempstead said. Some may be relatively affluent people who are buying coverage for adult children or other family members with disabilities or chronic conditions and who want a plan that gives them access to specialized providers.
Then there are lower-income consumers who don't realize they can only obtain a premium tax credit through the ACA exchanges and unwittingly forgo that opportunity by buying an off-exchange plan. HHS estimated this month that 2.5 million consumers who bought plans off the exchange would be eligible for a subsidy. That includes 1.1 million people with incomes below 250% of the federal poverty level, which qualifies them for additional cost-sharing subsidies. Another 1.9 million people who bought off-exchange plans have incomes low enough to qualify for Medicaid.
