Urban Institute: ACA exchanges set for a stable year after turbulent 2018 

Document titled, Affordable Care Act
A new report suggests that the 2019 plan year should be a stable one for the ACA exchanges. (Getty/Designer491)

Thanks to a quieter 2018 on the health policy front, the Affordable Care Act exchanges are set for a more stable year in 2019. 

A new report from the Urban Institute found that premium increases for 2019 were modest compared to the year before, and in some cases premiums went down. In addition, more insurers were more willing to reenter some ACA marketplaces, the study found. 

Contributing to these trends, according to the report, is that 2018 was a far less tumultuous year for healthcare law and health policy compared to 2017, in which the Republicans attempted to repeal the ACA and the Trump administration also suspended cost-sharing reduction (CSR) payments. Though this policy upheaval drove payer behavior heading into the 2018 enrollment period, enrollment numbers for that year were relatively stable, decreasing by about 3.7%.

In addition, John Holahan, a fellow in the Urban Institute’s Health Policy Center and one of the report’s authors, said that though enrollment rates did again decline for 2019—by about 4%, according to data from the Centers for Medicare & Medicaid Services—the numbers weren’t as bad as some feared following the individual mandate repeal.

Payers may have overcompensated for the elimination of CSRs by raising premiums substantially in 2018, and thus increases for this plan year are notably smaller, he told FierceHealthcare

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“We could be at some sort of an equilibrium,” he said. “Premiums are higher than we would like, there’s not as many insurers as people would like and so on—but it’s enough. It’s sustainable.” 

The premium rates also led to more people signing up for gold and bronze plans compared to previous years, as payers stacked much of the premium hikes following the end of CSRs on silver plans—a process called “silver-loading”—to boost federal subsidies 

The institute’s research also dives into some of the trends in plan design for the ACA exchanges. Plans offered in the marketplace skewed significantly toward those with narrow networks, which are less costly. 

Holahan said that narrow provider networks can work for enrollees in urban areas with a bevy of options for care. In rural areas, however, they can pose cost challenges, as there’s a dearth of doctors or hospitals for patients to choose from, and local providers may not be in-network. 

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Though the outlook for the exchanges has improved, Holahan said it’s not enough to lure back some of the biggest insurers who’ve left the markets, such as Aetna and Humana. 

Another trend to watch, he said: finding an alternative to the mandate. Though such a replacement may not take the form of a tax penalty, Holahan said policymakers may explore a similar incentive to drive people to sign up for exchange plans. 

“I think if there’s a lot of political enthusiasm for it then this market will continue to strengthen, and if there’s not, then it could flounder,” Holahan said.