More insurers are expected to offer individual health plans on more Affordable Care Act exchanges for 2019. The big question is whether they will just target urban areas or also expand into rural counties, of which more than half have only one carrier.
It seems likely that there will be net gain in participating exchange carriers in 2019, according to a new analysis from the Robert Wood Johnson Foundation. So far there have been no announcements of market exits for 2019, unlike past years when exits were announced in the first half of the year.
While insurers are seeing improved profits on their exchange business, those gains could be undermined by Republican-backed policy changes. The changes include repealing the tax penalty for not buying insurance and expanding short-term and association health plans, according to the analysis written by Katherine Hempstead, who directs the foundation's health insurance work.
Experts say the policy changes will lead to a sicker, more expensive population served by exchange plans, making the exchange market less attractive to insurers.
Market stability also could be shaken by the Trump administration's announcement Saturday that it was suspending risk-adjustment payments to insurers due to a federal court ruling in New Mexico. In addition, a group of Republican state attorneys general have brought a federal lawsuit in Texas seeking to have the ACA declared invalid.
"There seems to be a little more confidence in the sustainability of the ACA market," said Sabrina Corlette, a research professor at Georgetown University's Health Policy Institute. "It remains to be seen whether underserved rural areas will get more competition and choice next year. But with the administration's risk-adjustment decision and the Texas lawsuit, we're not out of the woods yet."
Insurers and states currently are in the process of negotiating individual-market premiums. With healthcare premiums expected to be a major issue in the November congressional elections, everyone is closely watching how many insurers will decide to offer exchange plans and how big the rate hikes are.
States seeing new insurers enter their exchanges include Arizona, Florida, Iowa, Maine, Michigan, New Mexico, North Carolina, Ohio, Oklahoma, Tennessee, Utah, Virginia and Wisconsin, the RWJF analysis said. Insurers eyeing expansion include Bright Health, Centene, Medica, Molina, Oscar, Virginia Premiere, Wellmark and potentially Anthem.
The pending expansions of Medicaid to low-income adults in Maine and Virginia, and the potential for Medicaid expansion in Idaho, Nebraska and Utah could encourage more carriers to enter the exchange market, Corlette said.
That's because studies have shown that covering low-income adults through Medicaid leads to a healthier risk pool in exchange plans, reducing premiums. A report published by HHS in 2016 estimated that exchange premiums were about 7% lower in expansion states than in non-expansion states.
The bad news for insurers is that fewer people who earn too much to qualify for ACA premium subsidies are buying individual coverage off the exchanges, Hempstead noted.
According to a recent CMS report, the average monthly enrollment among unsubsidized members declined by 1.3 million, or 20% from 2016 to 2017, while enrollment among those receiving premium tax credits decreased just 3%, or 223,000 members.
"There is a distinct likelihood that we will see more carriers serving the same or fewer customers in 2019, making it likely that margins will be tighter," Hempstead wrote.
Many will be watching what happens in rural areas. In 2018, about 26% of marketplace enrollees, living in 52% of counties, had access to just one insurer, according to the Kaiser Family Foundation.
Hempstead wrote that carriers need to identify areas with competitive provider markets and a large enough population to make the market profitable, including undeserved urban areas and urban parts of rural states.
"I want to see whether single-issuer counties will gain an issuer or whether companies are just going into areas that already have some competition," Corlette said.
