- More insurers are entering the Affordable Care Act exchanges for the third year in a row, resulting in more options for consumers, according to a new analysis from the Kaiser Family Foundation.
- KFF found 30 insurers joined the marketplace across 20 states, while another 61 expanded their service lines in existing regions for the 2021 plan year. More than a third of counties — 1,207, or 38% — will have more insurers, while only 12 counties (or 0.4%) will have a net decrease.
- More than three-quarters of marketplace enrollees will be able to choose between at least three insurers for the next plan year. That's up from just 48% of enrollees having a choice of three in 2018, KFF said.
The recent boom over the past few years in insurers participating in the ACA exchanges has significantly reduced one-insurer markets in the U.S. following years of a condensing market. For the 2021 plan year, fewer than 3% of enrollees will only have a single option in their county, down from a little over a quarter in 2018, KFF found.
Since the ACA marketplaces opened in 2014, insurer participation has shifted dramatically amid political flux and concerns about long-term profitability. Payers fled the exchanges in droves in 2017 following losses and worries about ongoing legislative and regulatory uncertainty stemming from the repeal-and-replace effort and the Trump administration halting cost-sharing subsidy payments.
However, since then, participation has been steadily recovering back to levels seen in the earliest years of the market. New market entrants and expansion of services since 2019 — along with steady premiums and profits for insurers — suggest Congress zeroing out the law's individual mandate penalty and Trump administration efforts to undercut the ACA, such as expanding access to short-term plan alternatives, haven't disrupted the exchanges as much as some expected, researchers say.
The resiliency of the individual market set up by the decade-old law and skyrocketing profit for payers this year amid the coronavirus pandemic have resulted in a smattering of high-profile investments in the ACA exchanges. Centene, already the largest player in the exchanges, is adding two new states and hundreds of new counties to its footprint for 2021, while UnitedHealthcare is adding one new state.
In 2014, there was an average of five insurers participating in each state's ACA market. Now, there will be an average of five insurers per state in 2021, up from a low of 3.5 in 2018 but down from a record high of six in 2015, KFF said. The number of insurers per state ranges from just one company operating in Delaware to 13 in Wisconsin.
But not all insurers operate in all counties.
Participation varies greatly across states and regions, with significantly fewer options in rural areas than urban, KFF said. On average, metropolitan counties have 3.1 payers participating for the upcoming plan year, compared to 2.5 in non-metro counties.
And ACA faces significant ongoing volatility stemming from the Republican state-led suit arguing the law is unconstitutional, currently in front of the Supreme Court. However, in arguments earlier this month justices seemed to be skeptical of the suit's standing, heartening supporters of the sweeping law.