Small Business Health Insurance Purchasing Pool

Small Business Health Insurance Purchasing Pool – The private market for health insurance—where people buy their insurance through exchanges and directly from insurers or brokers—has grown rapidly since the implementation of the Affordable Care Act (ACA) subsidies and bans on bias. Conditions in force. However, this increase in enrollment has been driven in part by subsequent declines, particularly in the unsubsidized population amid sharp increases in premiums. Most recently, the ACA’s individual mandate penalty was effectively phased out by 2019, raising questions about whether enrollment declines will continue.

Enrollment in the individual marketplace declined slightly in the first quarter of 2019 following the repeal of the individual mandate penalty, although enrollment in ACA marketplace plans was steady.

Small Business Health Insurance Purchasing Pool

In this analysis, we use publicly available federal enrollment data and insurer reports to the National Association of Insurance Commissioners (compiled by Mark Farah Associates) to measure the pre- and post-market effects of the ACA in the individual market. Coverage expansion and enrollment changes can be measured. These rules came into effect from 2014 to the first quarter of 2019. Key findings:

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The individual market includes coverage purchased by individuals and families through the ACA’s exchanges (the marketplace) and coverage purchased on the exchange, including ACA-compliant plans and non-compliant coverage (such as grandfathered policies purchased before the ACA). ). practical and short-term plans). The individual market (sometimes called the nongroup market) is relatively small relative to the U.S. population, with about 10.6 million people enrolled in 2013 before the ACA took full effect.

As the ACA’s marketplace rules and premium subsidies went into effect in 2014, enrollment in the individual market increased significantly. For the first time in nearly all states, people with pre-existing conditions can buy coverage on the open market, and low-income people are eligible for tax credits to help lower their premium payments and cost-sharing. In addition, many of those who went without insurance had to pay tax penalties. Starting in 2014, health plans must follow new rules for standard discounts and guaranteed coverage for pre-existing conditions (known as “ACA-compliant” plans) when selling coverage to new customers. Should. Enrollment in the private market has grown significantly since these changes, increasing from an average of 10.6 million members per month in 2013 to 17.4 million members in 2015 (Figure 1)3. About 3 million people are allowed to continue in non-ACA plans, including some short-term plans purchased before October 2013, grandfathered plans, and plans at the discretion of states and insurers under the federal transition policy.

In 2016, the market’s total individual population was relatively unchanged from the previous year (17.0 million people), although there was a shift from non-compliant plans to ACA-compliant plans. Registrations in the overall private market began to decline in 2017 and continued into 2018 (Figure 2). Both conforming and non-conforming enrollments were denied, indicating that individuals terminating transitional, non-conforming policies are not required to enter the ACA-compliant marketplace. In 2018, enrollment in eligible plans declined by 12.5 million and enrollment in non-eligible plans by 1.3 million.

Enrollment data for the first quarter of 2019 show that while enrollment in the ACA exchanges has remained relatively stable, overall enrollment continues to decline as premiums decline (Figure 3). In the first quarter of 2019, 13.7 million people registered in the private market, which is 5 percent less than the first quarter of 2018, or about 651 thousand people less.

Eliminating Small Marketplace Premiums Could Meaningfully Increase Insurance Coverage

Transaction registrations, especially subsidized transaction registrations, have remained fairly stable since 2015. In the first quarter of 2019, 10.6 million people enrolled in ACA exchanges, including 9.3 million who received federal premium subsidies4. Migration records in early 2019 showed little change from the first quarter of 2018, when 10.6 million people were placed on migration, including 10.6 million on subsidies. Because most people on the exchange receive premium subsidies based on a certain portion of their income, these enrollees are protected from the sticker price of premiums and are therefore less likely to lose coverage due to changes in premiums. happens.

While exchange enrollment was steady, the number of new customers signing up for plans fell 16 percent in 2019, from 3.2 million to 2.7 million, according to CMS. This decline in new registrations may be the result of a number of factors, such as a reduction in information and consumer support, the repeal of individual mandates, or broader economic factors that reduce market access.

Over-the-counter registrations have fallen since 2016, with private market registrations down significantly. Total market numbers began to decline in 2017 and continued to decline in the first quarter of 2019 (Figure 4). In the first quarter of 2019, total registrations in the private market decreased by 651 thousand people (5%) compared to the first quarter of 2018. All of this decline was among unsubsidized students, a 672,000 (10%) enrollment decline from 2018 to 2019 (both in unsubsidized ACA-compliant and non-compliant coverage).

Non-exchange enrollment includes ACA-compliant plans that are sold outside the exchange but are part of the same risk pool, non-compliant plans that do not meet ACA standards, and non-compliant plans that have ACA There are separate risk pools. Coordinated projects. The main difference between over-the-counter and over-the-counter ACA-compliant plans is that subsidies are only available through the exchange. To the extent that less healthy people purchase ACA-compliant plans off-exchange, premiums for on-exchange plans will also decrease. Ineligible plans that are not part of the ACA’s risk pool (including grandfathered and certain short-term plans) are included in OTC enrollment.

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As unsubsidized enrollment has declined in recent years, subsidized students increasingly dominate the private market. In the first quarter of 2019, we estimate that two-thirds of private market participants will receive premium subsidies (Figure 5).

In the first quarter of 2019, we estimate that 2.1 million people were covered by non-exchange ACA-compliant plans, and 1.1 million people were covered by non-compliant plans. 5 A limitation of this analysis is that accurate data on the number of noncompliant programs was not yet available at the beginning of 2019. Additionally, while the National Insurance Commissioners has some data on enrollment in short-term plans, that data is only available annually (so don’t include 2019) and doesn’t account for all short-term coverage because so few plans are Sales by association and individual market coverage are not considered. In Figure 3 above, we estimate the share of over-the-counter individual market participants in ACA-compliant and non-compliant plans at the beginning of 2019, taking into account the 2018 share. Over the years, this method has proven to be reliable. However, 2019 may differ from previous years as it is the first year that individual commission penalties have been effectively abolished and more loosely regulated schemes have proliferated.

Annual filings provide a more complete picture of the individual market and allow for a more accurate assessment of compliant and non-compliant registrations. Quarterly filings show how enrollment changes on a current basis. Enrollment in the first quarter is higher than average annual enrollment because the number of people who opt out of coverage throughout the year is greater than the number of people who buy coverage through the special enrollment period outside of annual open enrollment.

There are several possible explanations for this decline in access to the private market in recent years. The expansion of independently adjustable plans, which are not considered individual market coverage, will attract customers from the individual market. effective repeal of the individual mandate; and broader economic trends, such as gains in employment, which provide job-based security for many. Although we know that private market enrollment declined in 2019, we do not know whether those leaving the private market were covered by other sources.

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In 2017 and 2018, participation in the private market decreased significantly and premiums increased significantly. In the early years of the ACA exchanges, insurers underestimated how sick the new risk group would be and kept premiums too low to cover their claims. Many insurers have left the market, and the remaining insurers have significantly increased average premiums to cover their losses. Our analysis of insurer funds shows that the market stabilized by 2017 and that insurers began to reap benefits in the individual market for the first time under the ACA. The 2017 premium increase signals a one-time correction in the market. However, premiums rose again in 2018, fueled by debate in Congress about repealing the ACA and uncertainty over the Trump administration’s suspension of cost-sharing payments.

Although most exchange customers receive subsidies that protect them from premium increases, exchange customers in ACA-compliant plans bear the full cost of premium increases each year. States with the largest premium increases in 2017 and 2018 generally saw the largest declines in unsubsidized ACA-compliant enrollment (Figure 6), suggesting a possible relationship between premiums.

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