Dive Brief:
- Standard & Poor's Ratings Services suggested in a recent analysis of the individual health insurance market some insurers may remain willing to stay in the game as the market takes another one to two years to stabilize, LifeHealthPro reported.
- The individual health market and its regulation under the ACA have taken criticism from insurers, who lost about $3 billion on it in 2014 and probably even more in 2015, the S&P analysts reported.
- Despite these early troubles, "The individual line of business has grown the most during the past two years," S&P analysts said.
Dive Insight:
The report suggested insurers find the growth potential for the market attractive, and that some will want to be in place should more employers begin to lead their workers to the exchanges.
They argued the market will become more viable as insurers gain experience pricing their products, noting overly aggressive pricing amid a lack of data caused much of the problem early on -- as well as regulators altering ACA rules after insurers' products and prices were already set.
"[W]e are revising our view to say that it will take closer to five years for the individual markets to stabilize," credit analyst Deep Banerjee was quoted in Politico Pulse.
In 2017, the benefits for staying in the individual plan market should start to outweigh the negatives. Thus, the individual market could begin to stabilize after that, the analysts said.