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Analysis

2019 Sees ACA Marketplaces Stabilize After Turbulent 2018

By John Commins  
   January 25, 2019

Payers admit they may have 'overreacted' the political uncertainty created in Washington in 2018 during the fight over the future of the Affordable Care Act.

The Affordable Care Act's Marketplaces in 2019 had more insurers participating, saw modest premium hikes, and in some cases premium decreases, when compared with 2018, a new analysis shows.

Researchers at the Urban Institute interviewed marketplace insurers in 10 states (California, Florida, Georgia, Indiana, Maryland, Minnesota, Ohio, Virginia, Washington, and West Virginia) and found that they were more willing to enter new markets in 2019.

The findings are a sharp contrast to 2018, when a number of insurers fled the marketplaces as the Trump Administration and a Republican-controlled Congress attempted to abolish or hobble the ACA.

"The ACA marketplaces have rebounded from a period of political and policy uncertainty, which caused premiums to spike last year and issuers to think twice about participating,” said Anne F. Weiss, managing director at the Robert Wood Johnson Foundation, which funded the study.

"Political stability, along with support for people with modest incomes, are key ingredients for lower premiums and more marketplace choices," Weiss said.   

John Holahan, a fellow at the Urban Institute, says executives he spoke with in many of the Marketplace plans admitted that they "overreacted" to the political uncertainty in 2018.

"They were very fearful of what was going on with the Trump Administration and the threat to the individual mandate and less money for outreach and enrollment, and the shorter enrollment period, and all those things that it would cause complete chaos," Holahan said.

"But, it kind of didn't, and that allowed them to go into 2019 feeling more comfortable that their pricing was adequate, if not more than adequate," he said. "We're seeing smaller premium increases in 2019, because they're where they need to be, and insurers did enter new markets in 2019 and they're actively looking to in 2020 to do more or less do the same thing."

The payers also figured out how to make the Marketplaces work for them. The study noted shifts between 2018 and 2019 that show more plans offering narrow provider networks to contain costs and limit networks to high-performing providers.

"What's left unsaid," Holahan said, is the lack of participation in the Marketplace plans from the "big players."

"You don't see United, Aetna, Humana, or Anthem coming back into a lot of these markets. Those big guys are still staying out so the market's not that great," he said, adding that BlueCross plans have been active, but use HMOs with tighter networks than their commercial plans.

What would it take to lure big payers back into the Marketplaces?

"We'd have to agree that the ACA is here to stay, and it's stable, and there's more money coming in to make the subsidies more generous so you get bigger enrollment," Holahan said. "For a lot of these guys there aren't enough covered lives to make it worth coming in, compared to Medicare Advantage or the commercial markets they participate in. It's still small."

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

Premiums stabilized in 2019, and more payers entered the ACA Marketplace.

Marketplace plans are using narrow networks to contain costs.

The relatively small size of the Marketplace plans may discourage larger payers to participate.


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