COVID-19 May Drive More Insurers Into ACA Exchanges

by Leslie Small

As the impact of the COVID-19 pandemic continues to reverberate throughout the U.S. economy, it's become clear that there will be a major enrollment shift away from employer-sponsored plans and into Medicaid and the individual market.

In fact, one recent analysis suggested that there could be "unprecedented growth" in the individual health insurance market. "The impact of COVID-19-related job losses will likely more than double the current enrollment in Individual & Marketplace plans, with the potential for the Individual market to triple in size to over 35 million in a sustained and severe economic contraction," stated the analysis from A2 Strategy Group.

Such growth, the report said, "will come from newly unemployed individuals in all states who exceed Medicaid eligibility thresholds" because of money they receive from the Coronavirus Aid, Relief, and Economic Security Act. And in states that haven't expanded Medicaid, nearly all of the newly unemployed who earn below 100% of the federal poverty level could qualify for Affordable Care Act premium subsidies.

Another analysis from the Urban Institute and Robert Wood Johnson Foundation (RWJF), estimated that if U.S. unemployment reaches 20%, 25 million people would lose employer-sponsored health insurance. "Of these, 11.8 million would gain Medicaid coverage, 6.2 million would gain marketplace or other private coverage, and 7.3 million would become uninsured," it stated.

Katherine Hempstead, the senior adviser to the executive vice president at RWJF, says it's possible the coming enrollment shifts will cause some health insurers to re-evaluate their level of participation in the ACA exchanges, which some large insurers left in 2017 and 2018 before the market stabilized.

In fact, Maryland Gov. Larry Hogan (R) said on May 12 that UnitedHealth filed to offer plans on the sate's ACA exchange in 2021, bringing the total number of insurers in that market from two to three.

Ari Gottlieb, a principal at A2 Strategy Group, says the effect may be even stronger after 2021.

"If the market doubles to 25 or 30 million, some of that will probably fall off, but some of that will probably stay," he says. "I think even a year or two from now, we’re going to have a bigger individual market than we had before."

From Health Plan Weekly