while insurer financialperformance declined slightly from the first quarter of 2018 to2019, margins were still higher than all other previous yearsthrough 2017. (Photo: Shutterstock)

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Despite dire predictions that the Trump Administration's policychanges would collapse the Affordable Care Act exchanges, theACA-compliant individual insurance market continues to be stable –and insurers are generally profitable, according to an analysis by the Kaiser FamilyFoundation.

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“One concern about the effective repeal of the individualmandate that took effect for 2019, along with the expansion ofshort-term plans, was whether healthy enrollees would drop out ofthe market in large numbers,” the authors write. “The still-modestgrowth in claims costs during the first three months of 2019suggests that these policy changes did not cause as many healthyenrollees to leave the individual market as was feared.”

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Moreover, many insurers on average continue to make a profit inthe individual insurance market, according the KFF's analysis offinancial data reported by insurance companies through the firstquarter of this year.

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Related: Key factors driving 2020 ACA premiumincreases

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In anticipation of Trump's policy changes, including thecessation of cost-sharing subsidy payments, insurers in 2018raised benchmark premiums by an average of 34 percent.

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Chart of individual market insurance margins

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“These premium hikes, along with slow claims growth, made 2018the most profitable year for individual market insurers since theACA went into effect,” the authors write. “Premiums fell slightlyon average for 2019, as it became clear that some insurers hadraised 2018 rates more than was necessary.”

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Insurers on average continue to be profitable, as measured byaverage medical loss ratios and gross margins, according toKFF.

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Considering that insurers rose 2018 premiums to coveranticipated policy changes—and some even over-corrected—ratioscontinued to fall in 2018.

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“With such low loss ratios, insurers generally could not justifypremium hikes for 2019, and loss ratios for the first quarter of2019 rose to 73 percent,” the authors write. “Though 2019 annualloss ratios are likely to end up higher than 73 percent, this isnevertheless a sign that individual market insurers on average areon a continuing path towards sustained profitability.”

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Moreover, while insurer financial performance declined slightlyfrom the first quarter of 2018 to 2019, margins were still higherthan all other previous years through 2017. Following recordinsurer margins in 2018, premiums per enrollee fell slightly onaverage for 2019 while claims costs continued to grow at a similarpace to previous years. On average, premiums per enrollee fell 0.4percent from early 2018 to 2019, while per person claims grew 5percent.

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“Continued modest growth in claims costs in early 2019 indicatesthat the repeal of the individual mandate penalty and expansion ofshort-term insurance plans did not leave the individual marketsignificantly less healthy,” the authors write.

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For 2020, insurers so far are requesting modest premiumincreases, ranging from an average 3 percent decrease in Marylandto a 13 percent increase in Vermont.

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“With a continuing legal battle threatening the very existenceof the ACA, significant uncertainties remain,” the authors write.“However, earlier concerns that the market would collapse orinsurer exits would lead to counties with no coverage available atall have proven unfounded.”

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