The 2016 Year in Review: Insurance

Growing instability in the Affordable Care Act's insurance exchanges was the biggest storyline in health insurance for 2016.

It started in April when UnitedHealth Group CEO Stephen Hemsley said his company would only sell individual-market exchange plans in a handful of states in 2017 due to more than $1 billion in losses in 2015 and 2016. Aetna and Humana soon followed with similar retreats.

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There was a subplot that got less attention. Not-for-profits like Kaiser Permanente and some Blue Cross and Blue Shield plans, such as Florida Blue, reported making money or breaking even on exchange products.

Still, most insurers said they weren't getting enough younger, healthier people to balance out the costs of older, sicker members. They also complained that some consumers gamed the system by signing up to get care and then dropping coverage. In addition, people with incomes too high to qualify for ACA subsidies struggled to afford rising premiums and out-of-pocket costs.

The Obama administration's announcement in October that individual-market premiums would rise by an average of 22% across the country created political turbulence for Democrats heading into the November elections.

Rising out-of-pocket costs were an issue in employer-based plans as well. Kaiser Family Foundation data showed that premium growth slowed somewhat in 2016 because more employers shifted workers into high-deductible plans. Drew Altman, the foundation's CEO, called the cost shift to consumers “the biggest change in healthcare in America that we are not really debating.”

The entire industry, meanwhile, watched closely as the Anthem/Cigna Corp. and Aetna/Humana merger plans proceeded. The U.S. Justice Department sued to block both deals, and the trials got underway in the final weeks of the year.