Trends in 2021 Affordable Care Act Marketplace Insurers, Locations

The number of insurance options in the Affordable Care Act (ACA) marketplace has increased since 2018 with nearly 1,500 counties having access to three or more marketplace payers, a Health Affairs report found.

Researchers from Duke and Vanderbilt Universities used data from the Kaiser Family Foundation, the HRSA’s Area Health Resources Files, the National Conference of State Legislatures, and the CMS Medical Loss Ratio Data and System Resources to assess which counties gained marketplace insurers and the characteristics of both the counties and the payers.

Insurer participation in the ACA reached an all-time low in 2018, something experts attribute to uncertainty during the 2017 and 2018 rate-setting cycles, federal policy changes, and low marketplace enrollment numbers at the county level.

However, participation has rebounded since then with nearly 2,000 counties seeing more insurers participating in the ACA marketplace in 2021 compared to 2018. With more payers offering plans on the marketplace, county residents have more options for coverage.

Counties that saw increases in insurer participation followed certain trends. For example, the 1,451 counties that had access to three or more marketplace insurers in 2021 made up 75.2 percent of the US population that is younger than age 65.

In contrast, counties that had access to one or two insurers on the marketplace had a lower share of younger residents. The 1,390 counties that had two insurers made up 21.4 percent of the US population under 65, while the 294 counties that had one marketplace insurer made up just 3.4 percent of the nonelderly population.

These trends disproportionately affected counties that had low insurer participation in 2018. Counties that had only one insurer in 2018 gained a mean of 1.22 insurers over the three years. However, counties that had two insurers in 2018 gained a mean of 0.68 insurers and counties with three or more insurers saw a mean gain of 0.51 insurers over three years.

Counties that continued to have limited insurer participation on the Affordable Care Act marketplace in 2021 largely shared certain characteristics. These counties were more likely to have had low participation in 2018 as well. They also were more likely to have state governments that were divided or controlled by Republicans.

Additionally, counties that had low insurer participation in 2021 were more likely to be in states that did not have a state-based marketplace.

The increases in insurer participation may have helped eliminate monopolist marketplace insurers. The number of counties with insurer monopolies decreased from 1,616 in 2018 to 294 in 2021, the report stated. Counties that experienced an incline in insurer participation were also likely to have had a decrease in insurer participation between 2016 and 2018.

The report looked at the different types of insurers that participated in the marketplace in 2021 and found that the majority of plans were offered by existing marketplace insurers that had expanded into additional areas since 2018.

Insurers with an existing presence that expanded their presence in the years following 2018 were less likely to be Blue Cross Blue Shield Association (BCBSA) plans. Meanwhile, BCBSA plans were less likely to expand their existing presence on the marketplace, but were more likely to enter the ACA marketplace.

Insurers that expanded their reach were also more likely to offer silver plans, cost-sharing reduction plans, and health maintenance organization (HMO) and exclusive provider organization (EPO) plans.

The Trump administration aimed to repeal and replace the Affordable Care Act and also eliminated federal reimbursement for plans that offered cost-sharing reduction for silver-level plans. The KFF researchers pointed to these actions as key motivators for health plans that evacuated the marketplace in 2018.

The insurers that remained in the marketplace turned to silver loading to make up for the lack of government compensation, but this practice, combined with a lack of competition in the marketplace, led to high premiums for enrollees.

As more insurers joined the marketplace following 2018, premiums decreased. But lower premiums could impact the ACA tax credit subsidy and increase out-of-pocket costs for those with incomes between 100 and 400 percent of the federal poverty level, the report indicated.

The enhanced premium subsidies under the American Rescue Plan Act may help negate this impact and increase marketplace enrollment and affordability.

“In the next several years, political and policy predictability as well as expanded subsidies and increased federally funded advertising and political support in profitable markets could be an attractive environment for insurers to enter new markets and expand their service areas, thus leading to enhanced competition,” the report concluded.