The open enrollment period for 2015 for the Affordable Care Act is well underway. Though the final numbers on participation have yet to be tabulated, by all accounts this year’s process is going more smoothly. The exchanges are evolving into dynamic marketplaces with greater plan participation and an increasing number of options for consumers to access health insurance products. Whether this will ultimately represent an increase in the number of insured or simply offers new channels for the already-insured to access coverage remains to be seen but the exchanges are showing all the signs of a robust marketplace - sellers are innovating with new products to attract buyers who are comparing and contrasting the detailed offerings to find the best cost:coverage ratio for their family. There are now 335 carriers offering 223,000 products on the healthcare exchanges. Both the carrier count and product offerings are up fairly dramatically in 2015.
To understand how the products being offered this year differ from those offered during the 2014 open enrollment period, the McKinsey Center for U.S. Health System Reform expanded its database to include all of the participating carriers exchanges and all of the products they are offering. This comprehensive database contains information on more than 223,000 ACA-compliant on-exchange products from both 2014 and 2015 enrollment periods, including premiums, benefit design, and network design.
Here is what the analysis by McKinsey found.
Competition and choice are increasing nationwide. In most counties, consumers shopping for coverage on the 2015 public exchanges have more carriers and more products from which to choose. Nationwide, the number of carriers participating on the exchanges has increased 19% since the 2014 OEP, and the number of products has increased 27%.
With the exception of Blues carriers, which were already available to 98 percent of exchange consumers in 2014, all carrier types increased their market presence in 2015 (Exhibit 2). National carriers (Assurant, Aetna/Coventry, Cigna, Humana, and UnitedHealthcare) not participating in some or all of the 2014 exchanges are the most common type of new 2015 entrant and have the largest “footprint” expansion (i.e., increase in the number of consumers who can access their products on the exchanges).
United Healthcare and Assurant expanded the most aggressively. Expanding into 20 and 16 new markets respectively.
Gross premium prices are rising, especially for PPO and broad-network products. Between the 2014 and 2015 OEPs, gross premiums of the lowest-price exchange products rose by a median of 6% across metal tiers.
Among the lowest-price 2014 exchange products re-filed for 2015, the median gross premium increase is 10 percent. Premiums for re-filed products built on health maintenance organizations (HMOs), narrowed networks, or both increased much less than did the premiums for products based on preferred provider organizations (PPOs) or broad networks.
Median gross premium increases in HMO products configured around narrowed networks increased an average of 1 percent, compared with a 10-percent increase for PPO products configured around broad networks).
Switching products would minimize or eliminate premium increases in many cases, but would not always lower overall costs. We estimate close to three-quarters of 2014 exchange enrollees have access this year to a product that is within the same metal tier as the product they bought last year but priced below the 2015 premium of last year’s plan. Often, however, the lower-premium products have higher deductibles.
Net premiums for subsidy-eligible consumers have often risen. Net premiums for the lowest-price silver products have increased for nearly three-quarters of those eligible for subsidies but in most cases the increases are less than 10%.
Recent and new entrants are often price leaders. Just over half of new price leaders are either recent or new entrants (i.e., carriers that entered the individual exchange market in one or more states last year or this year). In many counties, there is a significant change in competitive price positions.