ACA Marketplaces Gain Payers in 2021, Rural Areas Still Struggle

Over three-quarters of Affordable Care Act marketplace enrollees will have three or more payer options in 2021, a Kaiser Family Foundation (KFF) report found.

That represents an 11 percent increase over 2020 and a 20 percent increase over 2019.

In the new year, 30 payers will enter the individual health insurance market in 20 states. Meanwhile, another 61 payers are expanding their footprints. Due to this activity, on average there will be five payers per state in 2021, which is close to the marketplace high of six payers per state in 2015.

Meanwhile, fewer counties will see one-payer markets this year. In 2020, a quarter of all US counties had access to only one payer. In 2021, only 10 percent will have access to only one payer. Conversely, instead of less than 30 percent of counties having three or more payers, 46 percent of counties will have three or more payers now.

Despite this fairly significant influx in payer activity, some counties still have better access to individual health insurance coverage options than others, even within a single state.

Researchers noted that rural counties have always struggled to secure a range of payer options and 2021 is no exception: while metro-area counties will have 3.1 payers each on average, non-metropolis counties will have 2.5 payers per county on average.

Moreover, states still experience a broad range of payer market participation and diversity. For instance, the entire state of Delaware will only have one payer to choose, whereas Wisconsinites overall will have a selection of 13 payers. Additionally, 12 counties nationwide lost a payer on their Affordable Care Act marketplaces.

However, just because enrollees have more choices does not mean they will choose diversely, a report from the Government Accountability Office recently revealed.

For example, Blue Cross Blue Shield companies have been particularly successful in the individual health insurance market. These companies held onto about 50 percent of the market share on Affordable Care Act marketplaces in 2018. This may be poised to change in the near future as greater competition is imminent.

The KFF report indicated that the Blue Cross Blue Shield plans have long dominated the individual health insurance market, a trend stretching back to before the Affordable Care Act went into effect in 2014.

“Often, when there is only one insurer participating on the exchange, that company is a Blue Cross Blue Shield or Anthem plan,” stated the KFF report.

Not only is payer participation on the individual health insurance market increasing, but payer financial health prior to and during the coronavirus pandemic also remained strong. Coronavirus-related deferred care led to higher margins for payers in 2020 and promises high rebates in 2021. Also, premiums were lower in 2020, due in part to CMS actions.

“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 KFF researchers summarized.

In the shadows of these successes, the Supreme Court case regarding the Affordable Care Act’s constitutionality looms as a potential hurdle for the individual health insurance market in 2021.

In the unlikely scenario that the Affordable Care Act is overturned, Robert Wood Johnson and Urban Institute experts have predicted that individual health insurance market costs will escalate due to the loss of federal subsidies. Furthermore, those with pre-existing conditions may lose coverage if the law is ruled unconstitutional.

It is more likely that the court will either uphold the Affordable Care Act’s constitutionality or strike down one or more parts of it without discarding the entire law, according to Manatt Health experts. The decision is expected to be issued near June 2021.