Individual Enrollment Trends and Market Insights

 

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 1^st, 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 provider of health plan market data and analysis tools for the healthcare industry.  If your company relies on accurate assessments of health plan market share to support business planning, we encourage you to contact us to learn more about our products.  Our portfolio includes Health Coverage Portal™, County Health Coverage^TM, Medicare Business Online™, Medicare Benefits Analyzer™ and Health Plans USA™ —www.markfarrah.com.

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