Supplemental health industry for small companies: Challenges and opportunities
Small companies in the supplemental health products market need to understand the unique challenges these products present in order to compete effectively.
Following the introduction of the Patient Protection and Affordable Care Act (ACA), the individual health insurance marketplace has experienced continuous changes. To support understanding of the condition and stability of the individual market, we have prepared our third annual profile of the individual health insurance market for each state along with the District of Columbia (DC).
Profiles of the individual health insurance market for the 50 states and the District of Columbia
These state profiles summarize insurer financials, marketplace enrollment1, and federal assistance provided to households purchasing insurance coverage through the insurance marketplaces, incorporating recently released data from the 2019 open enrollment period 2 and estimated 2019 effectuated enrollment 3 . The table below summarizes our estimates of effectuated marketplace enrollment and associated federal financial assistance for calendar year (CY) 2016 through CY 2019 time period. Historical data has been updated based on published data subsequent to the release of previous reports.
As illustrated in the table, aggregate premium assistance expenditures materially increased between 2017 and 2018, but are estimated to slightly decrease from 2018 to 2019. These changes are primarily attributable to national composite subsidy benchmark premiums increasing by 34% in 2018, but declining by (1%) in 2019. 4 Assuming stable marketplace enrollment, federal premium assistance expenditures for 2020 are likely to continue to decline as a result of a (3%) subsidy benchmark premium decrease. 5 Premium rate decreases for 2019 and 2020 are partially attributable to several states implementing state-based reinsurance programs (as discussed below).
|Average monthly marketplace enrollees||10,007,000||9,763,000||9,895,000||9,842,000|
|Average monthly premium subsidy recipients||8,396,000||8,228,000||8,578,000||8,601,000|
|Average monthly CSR subsidy recipients||5,634,000||5,597,000||5,192,000||5,003,000|
|Annual premium subsidy1||$3,500||$4,500||$6,200||$6,100|
|Annual CSR subsidy payments1,2||$1,000||$1,000||N/A||N/A|
|Aggregate premium subsidy ($ millions)3||$29,228||$36,836||$53,279||$52,887|
|Aggregate CSR subsidy payments ($ millions)2||$5,393||$4,998||N/A||N/A|
|Aggregate premium & CSR subsidy payments ($ millions)||$34,621||$41,834||$53,279||$52,887|
1.Values have been rounded and reflect estimated annual per capita amounts.
2. CSR subsidy payments reflect estimated benefits received by marketplace consumers prior to the discontinuation of CSR payments on October 12, 2017.6
a. Amounts exclude CSR subsidy payments provided to Medicaid-eligible consumers in Arkansas and New Hampshire, which were estimated to be approximately $500 million in 2016 and 2017.
b. Following the termination of CSR payments in 2017, premium rates have been increased by insurers to reflect the loss of direct federal CSR subsidy funding, resulting in an increase to premium subsidy amounts.
3. Aggregate premium subsidy amounts exclude federal pass-through funding related to 1332 Waiver approvals.
This information is vital to state, federal, and insurer stakeholders for several reasons:
The information contained in this report and the 51 state market profiles was prepared through the use of publicly available data sources and estimates of effectuated marketplace enrollment. Effectuated marketplace enrollment includes the population that has made premium payments and is actively enrolled in a marketplace policy. Data underlying our analyses is based on information from CY 2016 through CY 2019.
Insurer financial results
Financial results for CY 2017 were summarized through the use of annual Medical Loss Ratio Reporting Data (MLR Data), which was publicly released by the Center for Consumer Information and Insurance Oversight (CCIIO) within CMS. 17 Financial results for 2018 were based on statutory statement financial data submitted through the National Association of Insurance Commissioners’ Supplemental Health Care Exhibit (SHCE). SHCE data was not available for California and Massachusetts because a material number of companies operating in these markets do not complete NAIC statutory financial statements. Individual market financial information from the MLR and SHCE Data is inclusive of marketplace enrollment, off exchange (marketplace) enrollment, and enrollment on transitional products. Further information related to CY 2017 and CY 2018 insurer financial results can be found in our annual research report on the commercial health insurance market. 18 Additional adjustments were made to the data for observed reporting issues or data variances relative to statutory financial statements.
Marketplace enrollment and subsidy value
CMS released effectuated enrollment summaries for the insurance marketplace on a national and state level for 2016 through 2019. 19,20,21 Effectuated marketplace enrollment was provided separately for total marketplace enrollment, APTC enrollment, and CSR enrollment.
The effectuated marketplace enrollment data also includes the average APTC on a national and state level. We relied on CY 2019 marketplace open enrollment report (OER) public use file to estimate the average premiums for members receiving a premium subsidy.
For CY 2016 through 2019, average monthly premium (for individuals receiving an APTC) were estimated through the use of the public use files for states using the federal marketplace. Due to inconsistent data sources across the three-year period, we have not illustrated monthly marketplace premiums for state-based exchanges that operated in 2019. For all states, it is certain that the actual results will vary from the estimates developed within each state profile. CSR payments were sourced from the MLR Data. For Arkansas and New Hampshire, we adjusted the CSR payments reported in the MLR data for private Medicaid expansion enrollees.
Publicly available data used in our analysis was reviewed for reasonableness and consistency. However, the data sources have not been audited. To the extent data items were not correctly reported, the values presented in this report and accompanying state profiles will need to be updated.
Summary of individual market enrollment and Affordable Care Act subsidies
These state profiles summarize insurer financials, marketplace enrollment, and federal assistance provided to households purchasing insurance coverage through the insurance marketplaces, incorporating recently released data from the 2019 open enrollment period and estimated 2019 effectuated enrollment.