Post-ACA we've seen significant changes in the form of switching carriers, discontinued plans, narrow "neighborhood" networks, fewer plan choices, increased premiums, elimination of commissions and reduction of carriers available. Individual and family rates are now more expensive and we are left with little to no compensation in this market.
How did we get here?
Here's a simplified look at some of the events that led us here, including:
- There were more claims with higher cost of treatment than anticipated, creating unplanned expenses for carriers.
- The marketplace and some insurers did not require proof of a qualifying event after open enrollment ended, leading to consumers purchasing coverage in anticipation of a need, then dropping coverage after treatment.
- Carriers priced their individual and family products with the anticipation of financial support from the law's Risk Corridors (that would allow carriers that were left financially vulnerable to be made whole). Unfortunately, only approximately 12% of the funds promised were paid.
- Carrier plan and rate changes created an atmosphere where consumers were compelled to switch carriers. This negated the carrier's ability to aid population health management (ex. getting a newly insured individual started on a chronic treatment then having them change carriers and start the process over again).
- The Tax Penalty for not purchasing qualified coverage is not substantial enough to change consumer behavior.
- Expansion of Medicaid. States that have expanded Medicaid have increased the enrollment in Medicaid by less than 4%, however their spending will increase this year due to the Federal Government's responsibility being reduced in 2017.
Where do we go next?
There is no magic solution for this mess, however there is an opportunity! The extremely high individual and family rates are forcing these employers to look at returning to employer-sponsored coverage that could help them save money and reap tax benefits.
Look at this real example:
|Age of Employee||2016 Individual Rates||2017 Individual Rates||2017 Carrier A Rates||2017 Carrier B Rates||2017 Average SHOP Group Rates|
Do you have a group client like this? Contact them to compare group rates with their 2017 individual rates. In today's competitive market we are here to help you with these opportunities. Use our resources below to get started.