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Individual Health Insurance Enrollment Trends and Market Insights

 

July 30, 2020

 

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 14.9 million as of March 31, 2020.  In addition, the Centers for Medicare & Medicaid Services (CMS) reported in the Health Insurance Exchanges 2020 Open Enrollment Report that approximately 11.4 million consumers enrolled in Marketplace plans following the 2020 open enrollment period (OEP).  This includes more than 8.3 million enrolled in the 38 states using the HealthCare.gov platform and 3.1 million enrolled in the remaining State-Based Marketplaces.  In this brief, Mark Farrah Associates (MFA) provides insights into individual health insurance enrollment trends and market developments with state-by-state membership comparisons.

In March 2020, health insurers reported total individual, non-group coverage for approximately 14.9 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).  This represents a 1.43% decline from the 15.2 million members in March 2019.  Although the individual segment experienced a slight year-over-year decline in enrollment, some providers increased in membership. Centene’s enrollment grew by 12.7% since March 2019 and remains the segment leader.  Anthem’s individual enrollment remained relatively the same between 1Q19 and 1Q20 and continues to hold the fourth spot for the third year.  Guidewell Mutual Holding Group (Florida BCBS) and Kaiser Foundation Group both experienced minor enrollment declines.

 

 Individual Segment - Members                                  

  Company   

    1Q19 

    4Q19 

    1Q20 

  Centene

2,008,757 

1,831,458 

 2,263,435 

  Guidewell Mutual (BCBS of FL) 

1,249,945 

1,141,525 

   1,249,772 

  Kaiser

   1,193,147 

   1,035,223 

   1,112,825 

  Anthem 

   1,062,308 

   989,715 

   1,067,570 

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

 

As indicated in the heat map below, California, Florida, and Texas had the highest number of enrollees, with Florida covering nearly 2.3 million members as of 1Q20.  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. These figures indicate 76% of individual medical members were enrolled through Marketplace plans and 24% were enrolled in off-exchange plans.

 

State  

March 2020 Total Individual Enrolled 

2020 On-Exchange Enrolled

Estimated Off-Exchange Enrolled

  AK

15,565

17,696

0

  AL

190,821

160,429

30,392

  AR

329,950

64,360

265,590

  AZ

205,483

153,020

52,463

  CA

2,228,098

1,538,819

689,279

  CO

266,531

166,852

99,679

  CT

117,651

107,833

9,818

  DC

30,335

17,538

12,797

  DE

26,572

23,961

2,611

  FL

2,275,591

1,913,975

361,616

  GA

521,781

463,910

57,871

  HI

36,656

20,073

16,583

  IA

113,662

54,586

59,076

  ID

91,155

78,431

12,724

  IL

384,564

292,945

91,619

  IN

160,626

140,931

19,695

  KS

152,910

85,837

67,073

  KY

72,714

83,139

0

  LA

143,435

87,748

55,687

  MA

442,617

319,612

123,005

  MD

257,504

158,934

98,570

  ME

62,681

62,031

650

  MI

348,793

262,919

85,874

  MN

161,341

110,042

51,299

  MO

256,635

202,750

53,885

  MS

175,103

98,892

76,211

  MT

49,377

43,822

5,555

  NC

542,932

505,275

37,657

  ND

39,112

21,666

17,446

  NE

97,334

90,845

6,489

  NH

49,973

44,412

5,561

  NJ

319,358

246,426

72,932

  NM

50,965

42,714

8,251

  NV

110,959

77,410

33,549

  NY

325,575

272,948

52,627

  OH

255,234

196,806

58,428

  OK

164,892

158,642

6,250

  OR

181,034

145,264

35,770

  PA

609,341

331,825

277,516

  RI

45,516

34,634

10,882

  SC

251,208

214,030

37,178

  SD

56,228

29,331

26,897

  TN

221,662

200,445

21,217

  TX

1,332,273

1,116,293

215,980

  UT

247,347

200,261

47,086

  VA

338,544

269,474

69,070

  VT

32,207

27,335

4,872

  WA

288,408

212,188

76,220

  WI

222,025

195,498

26,527

  WV

21,549

20,066

1,483

  WY

31,587

24,574

7,013

 Total

14,953,414

11,409,447

3,543,967

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

 

Individual Financial Performance

Despite facing steady declines in enrollment, the individual segment has sustained a three-year period of profitability.  According to our strategy brief, “A Brief Analysis of Profitability Trends for the 2019 Individual and Small Group Health Insurance Markets,” plans reported a healthy underwriting gain of $4.2 billion.  However, 2019 marked the first time since 2015 where the growth in medical claims expenses outpaced that of premiums on a per member per month basis.  

In 2019 approximately 68% of insurers reported a net underwriting gain for the individual segment, down from 73% of plans in 2018.  Insurers collectively gained nearly $4.2 billion in the segment last year; a significant decrease from the $7.9 billion reported in 2018.  On an aggregate basis, individual business summed to a net underwriting gain in 43 states. Florida generated the largest total profit, with plans reporting a combined net gain of over $1.1 billion. Pennsylvania and North Carolina reported underwriting gains greater than $200 million each.  Massachusetts led the country in net underwriting loss, totaling nearly $58 million, followed by New York and Indiana.  Take into consideration, these performance indicators include business generated both on and off exchange. 

After years of robust premium growth leading to three consecutive years of overall segment profitability, plans in the individual segment for 2020 are reporting a 2% growth overall in premiums per member per month (PMPM), matching that of the growth seen in 2019.  So far in 2020 the increase in premium PMPM has been outpaced by increased medical expenses PMPM. These two factors have resulted in an increased Medical Expense Ratio in 1Q20, 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 73.8% in 1Q20, up from 72.1% in 1Q19.   In a normal year, the first quarter increase in the medical expense ratio would signal lower levels of profitability for the segment in 2020.  However, 2020 is not a normal year, and the impacts of COVID 19 are not reflected in the first quarter financial reporting.  Therefore, it is possible that health insurance companies will report lower medical expenses for the second quarter.

Conclusion

The individual market continues to face hefty challenges especially amidst the current socio-economic implications of the coronavirus outbreak. However, while individual health insurance business has been experiencing enrollment declines, plans reported a healthy net underwriting gain of $4.2 billion in 2019.  Open enrollment for 2021 coverage starts on Nov. 1st and runs through Dec. 15th, although some states, including New York, California and Massachusetts have permanently extended their open enrollment periods. It is likely the individual segment may experience significant impacts of the pandemic and current economic crisis.  As we await data from the remaining quarters of 2020 and health companies begin to finalize premium rates in preparation for 2021, Mark Farrah Associates will continue to report on important developments and performance metrics.

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™, 5500 Employer Health PLUS, 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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