Trends Emerge Among Payers on Affordable Care Act Marketplace

Blue Cross Blue Shield companies, Anthem health plans

Historically, Blue Cross Blue Shield companies have dominated the Affordable Care Act marketplace in terms of participation, and 2021 perpetuated that trend. In areas with low payer participation, the payer’s silver premiums were more expensive. This was evident in markets like Oklahoma and Alabama.

In the markets that the researchers observed, Blue Cross Blue Shield companies’ participation remained steady over the course of the study from 2017 through 2021, with some exceptions.

Anthem’s pricing and participation were less predictable than the Blue Cross Blue Shield companies’. In Ohio and New York, the payer’s silver-level premiums were considered high. In Georgia, the premiums varied based on the region of the state, with Atlanta boasting low premiums but other regions seeing high costs.

Medicaid managed care

Medicaid managed care plans continue to be Blue Cross Blue Shield companies' main competitors for the largest share of the Affordable Care Act marketplace. 

Centene’ Ambetter Medicaid marketplace product has outstripped the rest in this territory by not only expanding its footprint but also acquiring other plans. 

For example, the payer acquired Health Net, which is a prominent health plan in western markets. In 2020, Centene also finalized its merger with WellCare, which offers government-sponsored health plans.

“Ambetter generally offers one of the lowest-priced silver plans in all markets in which it participates,” the report uncovered.

National health plans

National health plans continued to flee the Affordable Care Act marketplace from 2017 through 2021, a trend that started before the report's timeframe. 

UnitedHealthcare represents one exception. The major payer joined urban markets in Oklahoma, North Carolina, Maryland, the District of Columbia, and Washington. 

“United premiums have historically been high in most Marketplaces, but new entrants had premiums much more in line with the competition,” the report explained.

Cigna participated in a few states’ marketplaces that were included in the study, although its presence was intermittent. The payer had the lowest silver plan in three of the four states that it participated in for 2021.

Bright Health and Oscar Health are disruptors that are emerging as strong competitors in the Affordable Care Act marketplace. Bright Health often has the lowest silver premiums in its markets and Oscar is particularly competitive in urban areas.

Overall premium levels

The report also analyzed 2021 premium levels. The researchers assessed premium levels based on what the typical premium would be for a 40-year-old nonsmoker. For 2021, the national average benchmark premium was $443 per month, before applying premium tax credits. 

Forty-three states saw their average premiums fall, with a single state seeing an increase above six percent.

When comparing states, the researchers discovered that the premium levels in each state varied widely. However, states’ premiums were not as widely variant. 

The divergences can be traced to various factors, including the amount of insurer competition, the type of insurers such as whether it is a Medicaid or a Blue Cross Blue Shield plan, and the amount of hospital consolidation.

The premium levels were closely tied to the number of insurers in a marketplace. The lower the number of insurers in a region, the higher the benchmark premium. A rating area with a single insurer had a premium that was nearly $150 higher than the rating areas with five or more payers on the Affordable Care Act marketplace.

Whereas the researchers expected hospital consolidation to be tied to higher premiums, the Herfindahl-Hirschman Index (HHI) revealed the reverse trend. The report noted that areas with a lower number of carriers tended to have a higher rate of hospital consolidation.

“We tested for the correlation between HHI and insurer concentration and found a high correlation,” the researchers wrote. 

“Such a high correlation is probably responsible for the small effect of the hospital concentration measure on premiums. In other words, markets with few insurers are also likely to have high hospital market concentration, and determining the independent effects is difficult.”