Health Insurance Exchange Trends

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Health Insurance Exchange Trends

By David Bottoms, REBC, RHU, CLU, CHFC
Senior Vice President, Benefits

With the American Healthcare Act (AHCA) continuing to slog its way through Congress and the Affordable Care Act (ACA) still the law of the land, Americans are looking toward the Fall open enrollment season with a mixture of dread and confusion.

The good news that whatever Congress does (or doesn’t do) shouldn’t have much impact on the 150+ million Americans who receive health insurance coverage from their employers.  However, for the roughly 20 million Americans who have to secure their own individual health insurance coverage, Congress’ actions in the coming weeks and months are critical.

On June 12th, the U.S. Centers for Medicare & Medicaid Services (CMS) released a report confirming what most individual health insurance policyholders already know to be true… that the individual health insurance market is plagued by a toxic combination of increasing premiums and reducing coverage choice.

Specifically, the report conveys that for the 39 states using the healthcare.gov enrollment system, average premiums in 2017 were more than 105% higher than average premiums in 2013.  To make matters worse, three days before the release of the CMS report, the New York Times wrote that at least 45 U.S. counties will likely have no individual health insurers available to citizens in 2018 and 1,388 counties will likely have just one available insurer.

Rapidly increasing costs and steadily decreasing supply is never a sign of a healthy market so, regardless of political persuasion, most would agree that something needs to be done to stabilize the individual insurance markets as soon as possible.

Of course, it is unfortunately standard operating procedure in Congress to wait until the last minute to act on critical issues whether it be the debt ceiling, tax provisions or, in this case, healthcare.

The complicating factor with healthcare is that, if Congress delays too much, the insurance carrier market may not have time to calculate their risks and align plan and pricing parameters in time for regulatory filing dates which are fast approaching.  To that point, Aetna, Anthem/BCBS, Cigna, Humana and UnitedHealthcare have already announced that they will be, to differing degrees, tapering back their participation in the 2018 individual health insurance market rather than compromise their otherwise healthy balance sheets.

So, the big question is what should readers concerned about their 2018 enrollment options do to position themselves should the individual health insurance market continue to decline?  The short answer is to try to secure access to employer sponsored group health insurance market which is, by comparison to the individual market, quite healthy.

For individuals working for an employer who does not provide group coverage, it would be wise to encourage your employer to explore group health plan coverage options for a coverage effective date no later than January 1, 2018.  In the past, many small employers preferred to stay out of the business of providing a group health plan in the hope employees would secure their own coverage either through spouses or in the individual market.  That may not be a workable strategy in 2018.

If you are not employed, now might be a good time to start looking for access to employer based coverage.  Most large employers provide access to health insurance coverage for employees who work a minimum of 30 hours a week.  In the current tight labor market, many employers are looking for additional help so now might be a good time to try to secure a job with access to comprehensive health coverage.

If you are a small employer who has always just purchased individual coverage and deducted the cost on your tax returns, implementing a small group plan may be your best approach.

In any event, we all, of course, hope that Congress will move quickly to stabilize the individual health insurance market.  Regardless, and for better or for worse, 2018 will likely be a transition year for individual health coverage so, to the extent you can avoid participation therein by securing coverage elsewhere, you will probably be glad you did.

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