The roller coaster ride of the Affordable Care Act (ACA) continues; in addition to lower overall premiums, more insurers are entering ACA marketplaces for 2020, according to a new Kaiser Family Foundation (KFF) study.

The new report: "Insurer Participation on ACA Marketplaces, 2014-2020," finds that choice in health plan carriers—traditionally a problem for many states, even before the ACA went into effect—will go up in 2020, as 26 new entrants in 18 states have been announced by insurance companies.

"Insurer participation on the ACA Marketplaces will increase in 2020, with an average of 4.5 insurers participating per state, up from 4.0 in 2019. The share of Marketplace enrollees with only one insurer option (10 percent) will be the lowest since 2016 (when 2 percent of enrollees had only one insurer option)," the report states. "As was the case in 2019, there are more companies entering into markets or expanding their footprints within states than there are withdrawals in 2020. Nonetheless, the market overall continues to have lower insurer participation than in the early years of ACA implementation."

Turning a corner?

As KFF's statement suggested, the founding years of the ACA were turbulent ones. The health reform system was originally envisioned as encouraging competition among insurers, but carriers were not always enthusiastic about entering markets they perceived as having sicker and older individuals. However, as time has gone by those fears have been eased somewhat.

As with most large reform programs, the ACA's initial period of adjustment was rocky. New experiments such as ACA non-profit insurance co-ops were largely unsuccessful—a few remain today, but most did not have the financial resources to compete with established carriers. Market uncertainty and changes in policy from Washington, D.C. also were disruptive.

The overall result was a reduction in available health plan choices for many in the individual markets. Small carriers like the co-ops dropped out entirely; larger carriers withdrew from some state or regional markets.

Rates fluctuated as well; as insurers were required to cover more things like pre-existing conditions, premiums in both the private and employer-based markets tended to jump. But after some serious premium increases in recent years, the average ACA premium is set to fall by 4 percent in 2020. However, consumers will see a lot of variability from state to state.

Choice is expanding, but less so for rural areas

One of the takeaways from the KFF report is that the state numbers can be somewhat misleading; although carriers will offer an average of 4.5 plans per states, many carriers do not offer plans statewide, concentrating instead on higher-population areas. The longstanding problem of fewer insurance choices in rural areas continues.

"Despite these expansions and new entrances, there remain a number of areas in the country with just one exchange insurer," the report said. "In 2020, about 10 percent of enrollees (living in 25 percent of counties) have access to just one insurer on the marketplace (down from 17 percent of enrollees living in 37 percent of counties in 2019). Often, when there is only one insurer participating on the exchange, that company is a Blue Cross Blue Shield or Anthem plan. Before the ACA, state individual markets were often dominated by a single Blue Cross Blue Shield plan." The study added that for next year's market, 668 counties are gaining at least one insurer, while 18 counties nationwide will lose an insurer.

The report also noted that financial reports by carriers indicate that, overall, insurers are finding ACA markets to be profitable. "This is one of several indications that the repeal of the individual mandate penalty and expansion of short-term insurance plans did not disrupt the individual market as much as expected," the study added.

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Number of participating ACA insurers increases for 2020

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