2019 Outlook: Experts See a Stable Individual Insurance Market

by Leslie Small

Even amid factors like loosened rules for skimpy health plans and a court ruling that the Affordable Care Act is unconstitutional, experts expect the individual insurance marketplaces to remain on solid footing in 2019 as insurers integrate their latest batch of enrollees and finalize plans for next year.

"We think the underlying marketplace has stabilized," with both insurers and consumers now comfortable with how it works, Standard & Poor’s analyst Deep Banerjee says, adding that "we would expect the same for 2020."

Still, there are various legal and regulatory factors that might affect the individual market this year and how insurers start thinking about 2020 and beyond. Here's how industry experts assessed their impact of some of them:

✦ The expansion of short-term, limited-duration health plans and association health plans (AHPs).

In 2018, the Trump administration finalized rules aimed at expanding both types of non-ACA-compliant plans, sparking worries that they'd weaken the ACA marketplaces by siphoning off healthier consumers. While there was a dip in HealthCare.gov enrollment in 2019, it's not clear how much of that decline was due to people opting for short-term plans or AHPs, says Katherine Hempstead of the Robert Wood Johnson Foundation.

Banerjee says he expects more insurers to start selling short-term plans in 2020. "If you're an insurer, you're kind of hedging against the fact that you may lose some of your healthier population from the individual market to the short-term plans, so you want to have your own short-term plan so that the healthy individual at least stays with you and doesn’t go to another insurance company," he explains.

✦ The repeal of the individual mandate penalty.

The Tax Cuts and Jobs Act repealed the ACA's tax penalty on those who forgo health insurance — a provision that becomes effective in 2019.

The mandate penalty's disappearance "was assumed to be a factor" in the 2019 HealthCare.gov enrollment dip, says Kev Coleman, founder and president of AssociationHealthPlans.com. That said, "it is worthwhile to note that the state of New Jersey's enrollment was down despite re-instituting the individual mandate at the state-level and also heavily promoting the annual enrollment period."

Banerjee says repealing the penalty is indeed "a negative" for the exchanges, but he adds that "the market is not going to fall off a cliff because the mandate is going away, and that's really because the mandate never really worked well."

From Health Plan Weekly