In March, Deft Research published its annual Individual and Family Plan Shopping and Switching Study. The study surveyed over 3,600 people who obtain their health insurance directly from health insurers and without the sponsorship or assistance of an employer (no employer group coverage). If we include the uninsured as part of this market (it is here that they might receive premium assistance and are able to find plan options) the population represents over 50 million people, or one in seven Americans.
A primary goal of the Affordable Care Act was to provide health plans and premium subsidies for this market as one of several means of getting every American covered by health insurance. Since its initial implementation in 2014, this goal has not materialized. Federal and state agencies have worked inconsistently to promote and support ACA health plans, the electoral and legal environment has created uncertainty and inhibited commitments to the program, and the private health insurance industry has not been able to develop a viable and sustainable business out of the opportunity the ACA might have offered.
Deft Research’s study opens with a summary of the Individual and Family Plan (IFP) market’s recent history. Below is an overview of the private health insurer participation in the IFP market from 2015 through today.
Trends in Insurance Carrier Participation in the IFP Market
|
2015 |
2016 |
2017 |
2018 |
|
|
Number of distinct carriers participating |
148 |
195 |
148 |
118 |
|
Total Number of Plans Offered |
3,794 |
3,994 |
3,126 |
2,085 |
|
Number of states offering only one carrier |
1 |
1 |
5 |
8 |
|
Percent of counties offering only one carrier |
13% |
7% |
35% |
56% |
Source: Individual and Family Plan Shopping and Switching Study, Deft Research, 2018
The table shows that insurer participation increased through 2016 but then began dropping. One of the most compelling numbers in the table tells us that insurer market exits have brought us today to the point where the residents in 56% of US counties have only one IFP health plan to choose from.
Below is an overview of trends in health plan selection over the same four years.
Trends in Consumer Selection of Health Plan Metal Types
|
2015 |
2016 |
2017 |
2018 |
|
|
Platinum |
5% |
4% |
2% |
2% |
|
Gold |
23% |
22% |
17% |
20% |
|
Silver |
36% |
37% |
42% |
39% |
|
Bronze |
29% |
31% |
32% |
31% |
|
Catastrophic |
6% |
7% |
7% |
8% |
Source: Individual and Family Plan Shopping and Switching Study, Deft Research, 2018
The “metal” levels in ACA health plans represent how much of the actual cost of the insurance is covered by the consumer’s monthly premium and how much would need to be spent out of pocket when the consumer obtains a health care service. The Platinum plan’s premium covers 90% or more of the plan’s cost, leaving less to pay at the point of service. Platinum is considered the “richest” plan.
The table shows that IFP market consumers have remained stable in their preference for plans that have lower monthly premiums (Silver and Bronze). The preference for Silver plans is also triggered by them being the pathway to obtaining additional Federal cost sharing subsidies. Among insurance and regulatory people, Silver plans are considered the standard plans. The IFP market has been set-up so that more consumers choose Silver benefits than any other plan type.
Below is a summary over three years of the average IFP premiums for a single person, 40 years old, who does not receive a premium subsidy.
Trends in IFP Premiums
|
Average Premium for Unsubsidized 40-year-old (Exchange States) |
20162 |
20173 |
20184 |
CHANGE (‘17-’18) |
|
Platinum |
$477 |
$572 |
$767 |
34% |
|
Gold |
$439 |
$563 |
$613 |
9% |
|
Silver |
$361 |
$441 |
$537 |
22% |
|
Bronze |
$297 |
$367 |
$426 |
16% |
|
Catastrophic |
$243 |
$288 |
$334 |
16% |
Source: Individual and Family Plan Shopping and Switching Study, Deft Research, 2018
The table shows that, on average, Platinum plan premiums increased the most – over 60% in two years. Platinum plan increases are followed by Silver plan increases at 49% over the two years. In both cases the benefits attracted consumers who wanted more health services than the insurers had calculated they would. In the case of Platinum coverage, the richness of the benefits may have encouraged health services utilization by consumers and, whether it did or not, left insurers too exposed to high medical claims. In the case of Silver coverage, the volume of people in the plans created the same unsustainable exposure.
Deft Research’s study provides an analysis of consumer shopping activities, consumer experiences with their plans, and other opportunities to serve this market.
Download the Deft Research 2018 Individual and Family Plan Shopping and Switching Study Preview Slides for a sneak peek of these findings.