While fewer people are signing up for individual coverage, one report suggests the exchange marketplace is stabilizing.
Ongoing debate over the fate of healthcare reform is reflected in dwindling participation in the individual health insurance marketplace, which includes enrollment on state-run Affordable Care Act (ACA) exchanges. First-quarter research from Mark Farrah Associatescounted 18.1 million individuals covered by individual, non-group medical plans, a 11% drop from March of last year.
Those enrollees signed on for policies both on and off the exchanges. The firm points to proposed rate and premium increases, lower than expected enrollment, and reduced plan participation in ACA exchanges as diminishing the growth of individual marketplace.
Overall, more than 265 million currently have medical coverage, a slight uptick from 264.5 million a year earlier. The majority of that gain came in government programs, Medicare Advantage, and Managed Medicaid plans, while the individual/non-group, employer group risk and employer group ASO (administrative services only) experienced declines, Mark Farrah Associates notes.
More recently, a second quarter survey of more than 45,000 U.S. adults sponsored by the Gallup-Sharecare Well-Being Index revealed the percentage of uninsured climbed to 11.7% from 11.3% in the first quarter. Uncertainty over the healthcare law and looming premium increases, Gallup pollsters suggest, may have caused the dip in the uninsured rate.
The Status of the ACA Exchanges
Much of the viability of the individual marketplace rests with the ACA exchanges. Ultimately, the ACA’s future will be decided by the Senate, where conservative and moderate factions of the GOP remain locked in a debate over the bill’s final format. In an attempt to garner votes from conservatives, Sen. Ted Cruz (R-TX) proposed an amendment permitting insurers to sell policies that don’t adhere to all the ACA essential benefits mandate on the exchanges. When a revised Senate health reform package will be voted on has yet to be determined.
Meanwhile, recent reports and statistics present a mixed snapshot of the exchange marketplace. Last month, insurers began to submit their rate proposals for the ACA exchanges, and according to the Centers for Medicare and Medicaid Services, fewer issuers are on track to participate next year. The number of insurers applying for inclusion on the HealthCare.gov marketplace in 39 states has fallen to 141 for 2018, representing a 38% drop on this year, CMS reports.
CMS also projects that 47 counties will have no plan options available on the exchanges. Nearly 40% of counties across the U.S. (approximately 1,200) may have only one participating provider. Those numbers could change as health insurers have until September 27th to sign a final Qualified Health Plan agreement.
Fewer insurers offering plans on the exchange could negatively impact the individual marketplace. However, the Kaiser Family Foundation recently disclosed that insurers distributing plans on the exchanges reported improved financials, mostly due to reduced claim payouts as a percentage of premiums.
According to Kaiser, the data indicates “the individual market has been stabilizing and insurers are regaining profitability.” Higher profits could persuade more insurers to remain on the exchanges. The Senate version of the bill includes a provision to prop up the exchanges with federal monies in the short term so low-income enrollees can afford premiums and out-of-pockets costs.
Healthcare Costs Rising
As lawmakers and insurers ponder the direction of healthcare reform, one aspect all agree on is that healthcare costs are rising. MarketResearch.com affiliate the Freedonia Group released its Healthcare: United Statesreport earlier this month. It estimates by 2021 healthcare expenditures in the U.S. will hit $4.3 trillion driven, in part, by growing consumer incomes, government funding, an aging population, and an increase in acute and chronic medical conditions.
Those statistics underscore the importance of providing your clients with proper healthcare coverage, especially your senior clients. In its research, Mark Farrah Associates notes Medicare Advantage enrollment expanded by 6%, or more than a million members, between the first quarters of 2016 and this year. Expect this trend to continue as your baby boomers clients enter retirement and will need your healthcare advice more than ever.
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