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New Directions in US Consumer Healthcare Insurance  

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Summary  

According to an analysis by the Center for US Health System Reform, the individual health insurance market in the US has continued to see increased participation by both insurers and consumers. The number of new insurers entering the market has grown by 21% since 2021, marking the highest growth in participation since 2015, while product offerings have nearly tripled in the past four years. Pricing has largely stabilized, and consumer access has grown as newer, tech-enabled insurers bring greater choice to the market. Managed-care plans, particularly health maintenance organization (HMO) plans and exclusive provider organization (EPO) plans have grown steadily since 2014 and now account for 82% of plan-type offerings. Only about 2% of consumers have access to just one insurer, and consumers increasingly have access to more insurer choices and plans in their home counties.  

However, uncertainty remains as the enhanced premium subsidies created by the American Rescue Plan Act are due to expire at the end of 2022. If Congress does not renew these subsidies, pricing and consumer participation may face headwinds in the 2023 open-enrollment period. 2022 has brought healthy participation growth, and insurer participation and new product offerings have accelerated in the past four years with levels near or surpassing their all-time peaks.  

Chart from McKinsey & Co article. Click on the image for the complete article or below.

Predictions & Opportunities  

In the years since the Affordable Care Act's health insurance exchanges launched, the individual market has evolved dynamically year over year. In the 2022 open-enrollment period, it appears that insurer participation and new product offerings have increased since 2014, with levels approaching all-time highs. Managed-care plans, particularly health maintenance organizations (HMOs) and exclusive provider organizations (EPOs), have steadily grown since 2014, accounting for 82% of plan-type offerings. Consumers now have access to more insurer choices and plans in their home counties. The American Rescue Plan Act of 2021's additional subsidies reduced consumer cost burdens, but their expiration at the end of 2022 may affect future pricing and consumer participation. The telltale signs of the healthcare sector continue to build a highly resistant, inventive and progressive industry that matches consumer demand even under   

The healthcare insurance industry trends can only reinforce CMS confidence in the sector and critically support the strategic pillars; expanding healthcare access, advancing continued equity, driving person-centered care innovation to tackle patient needs, and maintaining responsible stewardship of future programs. CMS policymakers, technologists and leadership will have to consider how to address the challenges and opportunities presented by these trends. Here are a few opportunities:  

• Increase manage-care Plans: With the increase of insurer participation and new product offerings for managed-care plans such as HMOs and EPOs there are opportunities for CMS stakeholders to reinforce the benefits and advance patient equity with these popular plans.  
• Location, Location, Location: Consumers gain increasing access to more insurer choices and plans in their home counties, with only about 2% of consumers having access to just one insurer only gives CMS stakeholders the confidence to target strategic locations and partners to extend consumer equity and access, knowing there is pent-up patient demand.  
• Create price stability: Pricing is expected to remain stable, with only slightly higher price increases in 2022, and the consumer cost burden will be reduced by additional subsidies created by the American Rescue Plan (ARP) Act. Proactively CMS needs to strategize with multiple providers, payers and partners to create a watershed plan to reduce the total impact on the sector if the ARP Act is not extended.  
• Technology–Enabled Innovation: Tech-enabled and Medicaid plans, such as Oscar and Bright Health, are narrowing the accessibility gap with substantial growth. This offers CMS stakeholders the opportunity to model and improve new tech-enabled solutions with innovation and technology partners based on established customer lifestyle needs. 

 Topics to Explore 

In collaboration with relevant stakeholders and colleagues explore these short to long-term questions such as: 

• What might be the reasons for Tech-enabled or CO-OPs insurers in maintaining lower premiums in the marketplace? How might you broker equitable features from Tech-Enabled or CO-OP plans to support this growing consumer segment?  
• How might consumer and insurers' behavior change the market, products and services, if the American Rescue Plan Act is not extended?  
• How might you bring more accessible and competitive (Silver and Bronze) insurer plans, in particular to the upper Midwest, central and southern regions and counties with fewer insurer options? 

For the complete article: https://www.mckinsey.com/industries/healthcare/our-insights/insights-into-the-2022-individual-health-insurance-market