Commercial enrolment has declined under Affordable Care Act

With three full years of health insurance activity under the Affordable Care Act (ACA), the law has had a significant impact on membership, premiums and medical costs, a new report has revealed.

Commercial enrolment declined 8.6 percent (5.75 million members) to approximately 61 million since the onset of the ACA, according to a new report by healthcare data and analysis provider Mark Farrah Associates.

The report "An Analysis of Individual and Small Group Health Insurance Trends" further stated that profitability across the commercial segments has also been negatively impacted with declines within the small group and individual segments.

However, after multiple years of premium increases, there was marginal improvement in profitability for 2016. Between 2015 and 2016, both the small group and individual segments experienced improvements in underwriting gain/loss of 17 percent and 21 percent, respectively.

The latest analysis brief assessed health insurance trends for enrolment, segment profitability and premiums from the analysis of the National Association of Insurance Commissioners’ (NAIC) Supplemental Health Care Exhibit (SHCE).

The brief included a focus on four year trend data in membership, claims incurred PMPM (per member per month), adjusted premium PMPM and SHCE- reported MLR for the individual and small group comprehensive segment leaders. Health plans in these two segments face the added constraint of a standard (minimum) MLR (Medical Loss Ratio), a key component of the Risk Corridor program, one of three premium stabilization programs instituted by the Affordable Care Act (ACA).

Based on adjusted premiums, the individual segment leaders included UnitedHealth, Anthem, Health Care Service Corp, Guidewell Mutual Holding Group and Aetna. UnitedHealth’s incurred medical claims PMPM experienced a 92 percent increase over the four year period, leading to a reported 70 percent increase in adjusted premium PMPM. In contrast, Aetna saw the lowest overall increase in incurred medical claims PMPM, and consequently reported the lowest increase in adjusted premium PMPM.

For the small group segment leaders, United Health, Health Care Service Corp, Anthem, Aetna and Humana experienced mixed results over the four year period. Aetna saw a large increase in incurred medical claims PMPM leading to a 39 percent increase in adjusted premiums PMPM since 2013. Humana, facing less claims cost pressure in this segment, increased premium PMPM by just 5.5 percent.