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Current Trends in Individual Segment Enrollment

 

August 20, 2019

In March 2019, health insurers reported total individual, non-group coverage for approximately 15.2 million people, based on statutory financial statements filed with state regulators and the NAIC (National Association of Insurance Commissioners) and the CA DMHC (California Department of Managed Health Care). Additionally, the Centers for Medicare & Medicaid Services (CMS) reported in the Final Open Enrollment Report that approximately 11.4 million consumers enrolled in Marketplace plans following the 2019 open enrollment period (OEP). This includes more than 8.4 million enrolled in the 39 states using the HealthCare.gov platform and 3 million enrolled in the remaining 12 State-Based Marketplaces. These figures indicate 75.4 percent of individual medical members were enrolled through Marketplace plans and 24.6 percent were enrolled in off-exchange plans. In this brief, Mark Farrah Associates (MFA) provides insights into individual health insurance market developments with state-by-state membership comparisons.

Exchange Participation Snapshot

Despite many recent attempts to dissolve the Affordable Care Act (ACA), issuers on the individual market are finally experiencing some stability. According to our industry brief “Profitability Increases for the Individual and Small Group Health Insurance Markets in 2018,” individual segment profitability is at a six-year high. The rise in profits of nearly $1.7 billion in 2017 to over $7.9 billion in 2018 can partly be attributed to premium increases and declining expenses. For 2019, enrollment in the on-exchange market dropped by 300,000 from the previous year to 11.4 million.

In terms of leading competitor exchange participation, UnitedHealth and Anthem considerably downsized their participation in the Marketplace in 2017 and continue to do so. Humana is no longer offering coverage in any state with no announced plans for resuming in 2019 to date.  In contrast, some companies are looking to expand their presence in on-exchange plans while states are openly looking for more insurers to enter their markets. Centene continues to grow in membership and recently announced exchange market plans in 10 more states for the upcoming open enrollment period. Colorado recently applied for a waiver to set up a reinsurance program while California enacted an individual mandate with an accompanying subsidy program.

Individual Health Insurance Enrollment

According to financial statements filed by insurers and estimates by Mark Farrah Associates, enrollment in individual, non-group medical plans, both on and off the exchange, totaled approximately 15.2 million as of March 2019.  This represents a 3.9 percent decline from the 15.8 million members in March 2018.  Although the individual segment experienced an overall decline in enrollment, some providers increased their market presence. Centene enrollment grew by 18.0 percent since March 2018 and remains the lead provider in this segment. Anthem also experienced a positive increase during the same time period but remains in the fourth spot for the second year after scaling back its individual plan offerings in 2017.  Guidewell Mutual Holding Group (Florida BCBS) and Kaiser Foundation Group both experienced declines in membership.

 

 Individual Segment - Members                                  

  Company   

    1Q18 

    4Q18 

    1Q19 

  Centene

1,684,708 

1,488,519 

 1,988,638 

  Guidewell Mutual (BCBS of FL) 

1,301,479 

1,175,683 

   1,249,945 

  Kaiser

   1,362,470 

   1,198,032 

   1,195,439 

  Anthem 

   1,047,028 

   954,415 

   1,062,307 

               
 
 
 
 
 
 
 
 
 
 
 
 
Source: Health Coverage Portal™, Mark Farrah Associates, presenting data from NAIC, CA DMHC

 

As indicated in the map below, California, Florida, and Texas had the highest number of enrollees, with California covering nearly 2.3 million members as of 1Q19.  It is important to note that Mark Farrah Associates (MFA) applied enrollment figures for select carriers not required to report health enrollment on a quarterly basis and made other adjustments based on market analysis.  Furthermore, individual enrollment includes short term plan enrollees and may include Medicaid programs, such as CHIP, as some states include subsidized lines in the individual segment.  These factors may have resulted in moderate understatement or overstatement of enrollment.

 

Source: Health Coverage Portal™, Mark Farrah Associates, presenting data from NAIC, CA DMHC and CMS

 

The following table presents state-by-state breakdowns of the total individual market, separating on and off-exchange membership.  For this assessment, MFA applied the assumption that the difference between total individual enrollment reported by carriers and on-exchange, Marketplace enrollment reported in CMS’s Open Enrollment Period (OEP) public use files is a reasonable representation of off-exchange membership.  This analysis did not include state-by-state research to provide local market insights about exchange positioning nor did the analysts investigate off-exchange plan options.  Nonetheless, the state breakdowns provide a framework for understanding greater market opportunity.

 

State  

March 2018 Total Individual Enrolled 

2018 On-Exchange Enrolled

Estimated Off-Exchange Enrolled

  AK

19,471

17,805

1,666

  AL

197,741

166,128

31,613

  AR

350,273

67,413

282,860

  AZ

204,316

160,456

43,860

  CA

2,216,330

1,513,883

702,447

  CO

246,407

170,325

76,082

  CT

120,683

111,066

9,617

  DC

31,053

18,035

13,018

  DE

24,753

22,562

2,191

  FL

2,154,578

1,783,304

371,274

  GA

519,119

458,437

60,682

  HI

37,599

20,193

17,406

  IA

136,570

49,210

87,360

  ID

107,951

94,430

13,521

  IL

428,069

312,280

115,789

  IN

155,035

148,404

6,631

  KS

160,328

89,993

70,335

  KY

120,884

84,620

36,264

  LA

158,056

92,948

65,108

  MA

435,350

301,879

133,471

  MD

240,144

156,963

83,181

  ME

73,615

70,987

2,628

  MI

360,591

274,058

86,533

  MN

161,943

113,552

48,391

  MO

273,952

220,461

53,491

  MS

153,207

88,542

64,665

  MT

53,865

45,374

8,491

  NC

544,676

501,271

43,405

  ND

44,690

21,820

22,870

  NE

103,104

87,416

15,688

  NH

71,785

44,581

27,204

  NJ

319,901

255,246

64,655

  NM

57,649

45,001

12,648

  NV

129,577

83,449

46,128

  NY

348,252

271,873

76,379

  OH

276,312

206,871

69,441

  OK

164,060

150,759

13,301

  OR

178,999

148,180

30,819

  PA

627,099

365,888

261,211

  RI

45,501

34,533

10,968

  SC

263,182

214,956

48,226

  SD

57,411

29,069

28,342

  TN

249,380

221,533

27,847

  TX

1,331,989

1,087,240

244,749

  UT

259,482

194,570

64,912

  VA

358,622

328,020

30,602

  VT

32,310

25,223

7,087

  WA

275,321

220,765

54,556

  WI

230,043

205,118

24,925

  WV

25,162

22,599

2,563

  WY

33,811

24,852

8,959

 Total

15,170,201

11,444,141

3,726,060

Source: Health Coverage Portal™, Mark Farrah Associates, presenting data from NAIC, CA DMHC and CMS

 

Financial Performance

As we reported on July 22, 2019, in our strategy brief titled “Profitability Increases for the Individual and Small Group Health Insurance Markets in 2018”, in 2018 approximately 73 percent of insurers reported a net underwriting gain for the individual segment, up from 50 percent of plans in 2017.  Insurers collectively gained over $7.9 billion in the segment last year; a significant turnaround from the $1.7 billion reported in 2017.  On an aggregate basis, individual business summed to a net underwriting gain in 43 states. Texas generated the largest total profit, with plans reporting a combined net gain of over $1.1 billion. Florida, Illinois, and North Carolina reported underwriting gains greater than $ 500 million each.  Oregon led the country in net underwriting loss, totaling nearly $152 million, followed by California and New York.  Take into consideration, these performance indicators include business generated both on and off exchange. 

After years of premium growth and a very profitable year for plans in the Individual segment in 2018, plans in the individual segment for 2019 are reporting no growth overall in premiums per member per month (PMPM) along with increased medical expenses PMPM. These two factors have resulted in an increased Medical Expense Ratio in 1Q19, which illustrates the amount of spending on medical costs as a percentage of premiums earned. NAIC reporting health companies reported an aggregate medical expense ratio for the individual segment of 72.1 percent in 1Q19, up from 68.0 percent in 1Q18.   This stagnation in premium growth could point toward lower levels of profitability for the segment for 2019.

Conclusion

Although the individual segment continues to cause market disruption for carriers, things are currently looking up for this erratic healthcare sector, especially for the on-exchange market.  Many insurers are entering or returning to the Marketplace for 2020.  As plans race to firm up rates for the 2020 plan year and prepare for open enrollment beginning on November 1st, Mark Farrah Associates will continue to report on important developments and performance metrics for the individual health insurance market.

About Mark Farrah Associates (MFA)

Mark Farrah Associates (MFA) is a leading data aggregator and publisher providing health plan market data and analysis tools for the healthcare industry.  Our product portfolio includes Health Coverage Portal™, County Health Coverage™, Medicare Business Online™, Medicare Benefits Analyzer™, and Health Plans USA™.  For more information about these products, refer to the informational videos and brochures available under the Our Products section of the website or call 724-338-4100.

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