Many health insurers are still anxious about possible big changes to the public health exchange market and what it means for their bottom lines.
But despite the list of big insurers, including UnitedHealth Group, Aetna Inc., Anthem Inc. and others, cutting back—or even—ending altogether their participation in the public health exchange market, a new survey of health insurers by employee benefits management and consulting company Oliver Wyman finds that most payers still plan on selling online via the exchanges.
The survey of 24 insurers finds 70% of health insurers plan on carrying on “as is” in the public health exchange market while the remaining 30% plan on participating but maybe restructuring or restricting the range of policies offered. They are considering eliminating certain plans, offering narrower managed care provider network options and implementing other belt tightening.
“Payers are approaching 2018 cautiously, yet the vast majority of those surveyed intend to stay,” says Oliver Wyman head of health and life sciences, North America Todd Van Tol. “Just one respondent in our survey said it plans to exit the exchanges.”
Some payers may reduce the number of states where they write exchange-related plans next Nov. 1, when the 2018 employee benefits enrollment season begins. “While most payers indicated they are maintaining their existing geographic footprint, about 25% are adjusting strategy within those geographies—withdrawing from certain regions and (in a few cases) expanding into new regions,” says Beth Fritchen, a partner with Oliver Wyman actuarial consulting.
Last week the Center for Medicare and Medicaid Services announced a series of administrative actions aimed at stabilizing insurer participation in Healthcare.gov and other public exchanges. Those changes include:
- Pre-enrollment verification. Qualifying categories for special enrollment will be reduced, and documentation requirements increased. This will reduce the number of individuals with greater needs that the insurers would be required to accept outside of open enrollment with the impact of reducing adverse selection, according to the federal government.
- Guaranteed availability. Insurers may apply premiums paid as a credit against unpaid premiums for the prior year, and then deny coverage because of non-payment for the current year. This will protect insurers from individuals who have difficulty paying the premiums, says CMS.
- Determining coverage levels. Insurers will be allowed greater flexibility in the variation of the size and scope of the various plans they may offer for sale online.
- Less regulatory oversight from CMS and further shifted to the states. This action would reduce the regulatory burden for the insurers, CMS says.
- Qualified health plan certification calendar: Insurers would be allowed more time to incorporate benefit changes and maximize the number of coverage options available to patients, according to the government.
- Open enrollment period. The open enrollment period will be terminated six weeks earlier. This will protect insurers from many individuals with greater healthcare needs who often enroll later in the open period, CMS says.
Despite the planned changes by the federal government to bolster the public exchange market, many insurers are going to wait as long as possible before enacting any premium hikes, according to the Oliver Wyman survey. Most states have set June 21 as the latest dates health insurers can file for a preliminary increase in premiums.
“With the June 21 rate filing deadline fast approaching, all eyes are on payers for some sort of indication of what the 2018 rate increases will look like,” Van Tol says. “However, our survey reveals that most payers are taking a more cautious approach to rate setting this year. Those that are staying in the individual market intend to wait as long as possible to set those rates.”
But some insurer are planning rate increases, says Oliver Wyman. Those rates include:
- Half the payers in the survey plan on a rate increase of 10% to 20%.
- 25% are planning a rate increase less than 10%.
- 25% plan on an increase greater than 20%.
- The average rate increase in 2017 was 22%.
“Given the historical performance of this market and the current uncertainty regarding cost-sharing subsidies, we are not surprised that carriers are trying to gather as much information as possible when determining 2018 rates,” Fritchen says. “When we examined the preliminary rate increases of those that are ready to set rates, we found wide variation—with some payers planning single-digit increases and some planning increases greater than 30%.
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