Association for Public Policy Analysis & Management

Panel: Policy Options for Stabilizing the Individual Health Insurance Markets

(Health Policy)

The individual health insurance market has faced considerable upheaval over the last four years, first through implementation of the Affordable Care Act and more recently through recent efforts to dismantle premium stabilization efforts.  Between 5-7% of the individuals purchase health insurance coverage on the individual market including the self-employed and those not eligible for either an employer-sponsored or government plan.  The ACA required all individuals to have health insurance coverage, established a required list of essential services that must be coverage, changed rating rules and prevented insurers from denying coverage to those with pre-existing conditions.  In addition, premiums subsidies were provided to income eligible individuals purchasing coverage through government-sponsored health insurance exchanges.  Due to a combination of regulatory uncertainty and not fully funding the ACA’s premium stabilization programs, the individual markets in many states have been plagued by large and increasing premiums, increasing use of narrow networks, and a large number of insurer exits.   Recent efforts under the new Administration and Republican Congress have added to the regulatory uncertainty.  These actions have included not funding the Consumer Cost Sharing reductions, significantly shortening the enrollment periods, reducing funding for enrollment and outreach activities and most significantly including a provision in the tax bill to repeal the individual mandate.  This panel provides the results of recent quantitative and qualitative research on trends in the individual market and efforts to stabilize their markets.  The first paper documents insurer exits and entrants by state over time and provides a framework for modeling the factors influencing exit strategies by insurers.  The second paper will present results on a qualitative report on state efforts to stabilize their health insurance market including how the political and policy context at the state level has influenced these discussion.  The third related paper addresses the specific use of the 1332 waiver mechanism to fund state-based reinsurance programs focusing on case studies in the three states with approved 1332 waivers – Alaska, Minnesota and Oregon.   The fourth paper uses data form the Medical Expenditure panel survey and data from the CPS on state characteristic to estimate the costs of federal insurance program and reinsurance in four large-sample states.  We conclude with a discussion of the future of the individual market and ways to monitor current state efforts using the 1332 reinsurance provisions to stabilize their individual health insurance markets.