Thursday, March 19, 2020

Increased Carrier Participation Helps Drive ACA Exchange Stability

Individual marketplaces under the Affordable Care Act (ACA) have seen premiums stabilize, according to an analysis of 2020 open enrollment data performed by McKinsey & Co Inc., and experts sayincreased payer participation and market maturity are related to the increased consistency in prices.
According to the report, the number of counties with a single on-exchange carrier dropped 11% year over year to 25% in 2020. And approximately 9% of consumers could choose only one carrier in 2020, down from 16% in 2019.
The report attributes premium stability to increased carrier participation in ACA exchanges. According to the report, 27 carriers entered the individual marketplaces in 2020 and 25 entered in 2019, while only one carrier left the exchanges during both years.
The report says that increased participation in the exchanges by regional and local payers is one of the largest factors in both price stability nationally and improved competition in rural markets"
"This is really important, and I think it speaks to the health of these markets," says Dan Mendelson, the founder of health care consultancy Avalere. "The reality is that a regional and local carrier often knows the population the best, and some of them were reluctant to go into the exchange markets because they just feared uncertainty, and they feared adverse selection."
However, Mendelson says that efforts to repeal and undermine the ACA are the primary culprit for market instability. "The market did not mature as rapidly as it could have, because it became a political football," he says.
Kathy Hempstead, a senior health care policy adviser at the Robert Wood Johnson Foundation, says natural market corrections are also a factor in improved premium stability.
"We're not back to where we were in 2016, and I'm not sure we ever will be — or even if we should be," Hempstead tells AIS Health. "But we are seeing a steady return to the market as carriers are seeing there's an opportunity."
From Health Plan Weekly

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