Insights into the 2022 individual medical insurance market

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It has been eight years for the reason that Reasonably priced Care Act’s medical insurance exchanges launched in 2014.

During that point, the person market has been highly fluid, with insurer participation, pricing, and plan types evolving dynamically from yr to yr. The 2022 open-enrollment period (OEP) allows for an assessment of the most recent movements in the person medical insurance market.

Several salient features have emerged, particularly in light of the substantive changes created by the American Rescue Plan Act of 2021. Using data scraped from nearly every medical insurance exchange within the country, McKinsey’s Center for US Health System Reform has uncovered critical insights relevant to consumers, payers, providers, private equity sponsors, and policy analysts.

The Center for US Health System Reform’s evaluation of the 2022 OEP led to the next conclusions:

  • Insurer participation and latest product offerings have accelerated prior to now 4 years (the halfway point for the reason that marketplace launched), with levels near or surpassing their all-time peaks.
  • Managed-care plans—particularly health maintenance organization (HMO) plans and exclusive provider organization (EPO) plans—have grown steadily since 2014 and now account for 82 percent of plan type offerings.
  • Consumers increasingly have access to more insurer decisions and plans of their home counties; only about 2 percent of consumers have access to only one insurer.
  • Across all plan tiers, prices (premiums) remained largely stable, with only barely higher price increases in 2022 than in 2021; consumer cost burden was also reduced by additional subsidies created by the American Rescue Plan Act.
  • Annual premium growth of plans within the 15 states with section 1332 innovation waivers was observably lower than similar plans within the 35 states plus Washington, DC, without waivers.

Overall, the person market has continued its recent trajectory of increased participation by insurers and consumers. Pricing has largely stabilized prior to now several years, and consumer access has grown as newer, tech-enabled insurers bring greater alternative to the market.

But uncertainty stays, partly because the improved premium subsidies created by the American Rescue Plan Act are attributable to expire at the tip of 2022. If Congress doesn’t renew these subsidies, pricing and consumer participation may face headwinds within the 2023 OEP.

2022 brought healthy participation growth

In 2022, 55 latest insurers entered the market (a 21 percent increase over 2021), marking the best growth in participation since 2015, when participation grew 26 percent.

Participation prior to now two years has exceeded the 252 insurers that originally entered in 2014, with 305 total insurers in 2022.

Insurer participation has nearly reached its 2015 high of 310 insurers.

The person market has continued its trajectory of increased participation by insurers, with 55 insurers entering the market in 2022.

Insurer offerings proceed to extend

Over the past 4 years, product offerings have nearly tripled, with roughly half of that growth happening between 2021 and 2022 alone.

In-market growth represented about 50 percent of total product growth between 2021 and 2022, accounting for a bigger share of total growth than during any of the previous 4 years, highlighting insurers’ strategy of competing on the number and number of offerings out there.

50% of 2021–22 growth driven by in-market growth

Insurer types generally increased their participation

Participation by variety of insurers is approaching its 2015 peak and has increased for 4 years straight.

Tech-enabled and Medicaid plans, reminiscent of Oscar and Vibrant Health, have seen substantial growth since 2014, contributing essentially the most to overall participation growth, while other types have declined or stayed relatively stagnant.

Conversely, participation amongst Consumer Operated and Oriented Plan (CO-OP) insurers has largely declined since 2016.

Tech-enabled and Medicaid plans have contributed essentially the most to overall participation growth since 2014.

Growth in some plan types comes on the expense of others

Since 2014, participation of exclusive provider organization (EPO) plans has quadrupled to 36 percent as a share of all plan type offerings.

Preferred provider organization (PPO) plans have sharply declined by 36 percentage points in the identical timeframe.

Health maintenance organization (HMO) plans have grown steadily since 2014 as a share of plan types, displacing PPO offerings.

82% of all plan type offerings are managed-care plans.

Plan tier options are evolving

Silver and bronze plans account for the vast majority of market offerings in 2022, representing 75 percent of accessible options nationally.

Bronze plans have seen essentially the most growth of any tier type for the reason that creation of the market.

Catastrophic and platinum plans, conversely, have regularly change into less available since 2014.

37% of 2022 plan type offerings are bronze, which have seen essentially the most growth of any tier type.

Accessibility by insurer type

Blues have been essentially the most accessible insurer type annually since 2014, with no less than 80 percent of consumers consistently having such a plan available to them.

Medicaid and tech-enabled insurers have been narrowing the accessibility gap since around 2018, with about 75 percent and 50 percent of consumers, respectively, getting access to such a plan in 2022.

CO-OP plans have precipitously change into less available to consumers since 2017 as these insurers have reduced their participation out there overall.

Consumer access has grown as newer, tech-enabled insurers bring greater alternative to the market.

In 2022, fewer counties offered just one plan

Residents in lots of areas of the country that had access to only a single insurer in the person market in 2018 (52 percent of counties) can now choose from multiple insurers.

Counties with high insurer participation (defined as greater than five insurers) remain within the minority.

94% of counties have multiple insurer participating out there.

Well greater than half of consumers can select from five or more plans

Counties with one participating insurer account for just 2 percent of the general consumer population in 2022, down from one-quarter of consumers in 2018.

The proportion of consumers with access to 5 or more insurers jumped 17 percentage points from 44 percent in 2021 to 61 percent in 2022, indicating that the relatively few counties with such high participation levels still represent a majority of the market population.

61% of consumers in 2022 have access to 5 or more insurers.

Plans have gotten increasingly inexpensive

Largely stable or reduced gross premiums in 2022, combined with enhanced subsidies from the American Rescue Plan Act, suggest that many enrollees faced a meaningfully more predictable out-of-pocket cost burden than in prior years.

Gold plans specifically saw average price reductions in 2022—the biggest reductions of any plan tier for the reason that marketplace launched in 2014.

Also in 2022, platinum plans became inexpensive for the primary time, capping off years of decelerating price increases.

Premiums remained largely stable or saw reductions in 2022, and consumer cost burden was reduced by additional subsidies created by the American Rescue Plan Act.

Price changes varied by insurer type

Consumers in CO-OPs and Medicaid plans were almost certainly to see decreases in premiums (within the lowest-priced silver plan), while Blues consumers were almost certainly to see premium increases.

Enrollees in national plans were greater than two times as prone to be exposed to premium increases of greater than 7.5 percent (within the lowest-priced silver plan).

15% of enrollees in national plans were exposed to a big increase (7.5 percent or more) in premiums.

Price changes by insurer type in 2022

CO-OPs experienced essentially the most significant price decreases but have the bottom insurer presence out there by far.

Tech-enabled plans offered substantial price decreases while also maintaining a meaningful presence out there.

Blue and regional plans were the one plans with median price increases across the lowest-price silver plans.

3% price increase in Blues plans.

Consumers have access to increasingly inexpensive plans

In 2018, tech-enabled plans reminiscent of those carried by Vibrant Health, Friday Health Plans, and Oscar were essentially the most inexpensive silver options for 1 percent of consumers. That share rose to twenty percent in 2020 and 18 percent in 2022.

Blues and Medicaid account for 36 percent of participating insurers in 2022 and are almost certainly to supply the lowest-priced plan option.

The share of consumers whose most inexpensive silver plan option was offered by a national or CO-OP insurer dropped from 40 percent in 2015 to six percent in 2021 and 4 percent in 2022.

These shifts are driven partly by participation; 33 percent of insurers on the state level in 2015 were national or CO-OP, compared with only 15 percent in 2022.

Reinsurance improves on affordability

Annual premium growth for the median county’s lowest-priced silver plan was 5.2 percent within the 15 states with a bit 1332 innovation waiver, compared with 8.3 percent within the 35 states plus Washington, DC, without one.

Annual premium growth of silver plans within the 15 states with reinsurance programs was observably lower than similar plans within the 35 states (plus Washington, DC) without programs, most often.

Methodology

The findings on this document are based on publicly available information. The 2014–22 rates come from McKinsey’s Healthcare Insights exchange tracking tool, which incorporates county- and plan-level information from publicly available rate filings and from HealthCare.gov. The patron population is defined because the population that has enrolled in any sort of individual coverage, including each on- and off-exchange plans. Enrollment for 2022 is projected.

Because of information availability limitations, the evaluation excludes some counties:

  • 2020: Herkimer, Montgomery, Orleans, Saratoga, Schuyler, Tompkins, Washington, Wayne, and Wyoming counties in Latest York (combined estimated enrollment is 12,969)
  • 2021: Chemung, Erie, Montgomery, Orleans, Saratoga, Washington, Wayne, and Wyoming counties in Latest York (combined estimated enrollment is 20,427)
  • 2022: All Latest Mexico counties because their state-based exchange limits data scraping (combined estimated enrollment is 43,018); population not available for Kalawao County, Hawaii, in 2021 and 2022 (three estimated individual market enrollees in 2020)

Pricing: All analyses on this document are for exchange plans only; this report doesn’t include off-exchange pricing data. For consistency, prices were obtained for a 27-year-old nonsmoking individual without family or partner coverage. To grasp the premium changes that individuals face, we calculated the weighted average rate change in premiums in each relevant yr for the lowest-priced silver plan in each rating area or county combination and combined those data with the distribution of people using individual market plans in each county, as designated by Federal Information Process Standards (FIPS) county codes.

Insurer participation: To calculate insurer participation counts, we analyzed the variety of unique insurer parents which are offering plans on exchange, either by state or by county, depending on the evaluation. To investigate access, we combined those data with the distribution of people using individual market plans in each county (designated by FIPS codes).

Plan types: Plan types reported here were taken directly from insurer rate filings and summary of advantages and coverage documents. Independent assessment of plan types was not a part of the evaluation presented on this document. Plan types are defined as follows:

  • HMO: A health maintenance organization typically centers around a primary-care physician who acts as gatekeeper to other services and referrals; it often provides no coverage for out-of-network services, except in emergency or urgent-care situations.
  • EPO: An exclusive provider organization is analogous to an HMO. It often provides no coverage for any services delivered by out-of-network providers or facilities except in emergency or urgent-care situations; nonetheless, it generally doesn’t require members to make use of a primary-care physician for in-network referrals.
  • PPO: A preferred provider organization typically allows members to see physicians and get services that are usually not a part of a network, but out-of-network services often require a better copayment.
  • POS: Some extent-of-service plan is a hybrid of an HMO and a PPO; it’s an open-access model that will assign members to a primary-care physician and frequently provides partial coverage for out-of-network services.

Insurer types are defined as follows:

  • Blue: A Blue Cross Blue Shield payer
  • Consumer Operated and Oriented Plan (CO-OP): A recipient of federal CO-OP grant funding that was not a business payer before 2014
  • Medicaid: An insurer that offered only Medicaid insurance prior to 2014
  • National: A business payer with a presence on exchanges
  • Provider: An insurer that also operates as a provider or health system
  • Regional or local: A business payer with a presence typically in a single state, but could also be in multiple states
  • Tech-enabled: Any payer from the parent corporations Vibrant Health, Friday Health Plans, or Oscar

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