Decreases in health-care utilization and claims costs have contributed to relatively high gross margins among individual market insurers this year. (Photo: Shutterstock)
Consumers will have more insurance options in the Affordable Care Act marketplace in 2021 for the third consecutive year.
Thirty insurers are entering the individual market across 20 states, and an additional 61 insurers are expanding their service area in states in which they already operate, according to research from the Kaiser Family Foundation. States will have an average of three insurers in 2021, up from a low of three-and-a-half in 2018 but still below the peak of six in 2015. The number of insurers per state ranges from one company operating in Delaware to 13 in Wisconsin.
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The number of consumers with multiple insurer options has steadily grown in recent years. In 2021, 78% of enrollees will have a choice of three or more insurers, up from 67% in 2020 and 58% in 2019. More than 200 counties will have five or more insurers participating in 2021. Only 10% of counties have only a single insurer offering, down from 52% of counties in 2018.
"Despite uncertainties surrounding the ongoing pandemic and its impact on individual market enrollment and insurer viability, insurer participation on the ACA marketplaces is increasing for the third straight year in 2021 and will equal average participation levels at the outset of the marketplaces in 2014," according to the report. "The share of marketplace enrollees with only one insurer option has continued to decrease and will be the lowest rate since 2016."
Insurer performance data to date indicates that insurers remained profitable before and during the pandemic. Decreases in health-care utilization and claims costs have contributed to relatively high gross margins among individual market insurers this year. Even though insurers must cover the cost of testing and many have voluntarily waived cost-sharing for COVID-19 treatment, insurers are on track yet again to owe substantial rebates to consumers based on low medical loss ratios in 2021.
Marketplace premiums are falling from 1% to 4% on average in 2021 despite questions about what the pandemic will look like next year and the potential that the Supreme Court will invalidate the Affordable Care Act in their ruling in California v. Texas.
"Combined with these moderate premium decreases, the steady increase in insurer participation on the marketplaces for 2021 highlights the continued stability and attractiveness of the individual market for insurers across the country," the report concluded.
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Alan Goforth
Alan Goforth is a freelance writer in suburban Kansas City. In addition to freelancing for several publications, he has written a dozen books about sports and other topics.
