The Affordable Care Act is entering its second decade of existence. Over the last decade, coverage has doubled, consulting firm Oliver Wyman stated in a recent report. ACA enrollment continues to increase, with the Biden Administration expecting 2024 Marketplace enrollment to reach 19 million people.
However, there has been “considerable volatility” when it comes to the Affordable Care Act (ACA) over the last decade, Oliver Wyman noted. There have been consistent regulatory changes, and the “specter of repeal constantly hangs overhead in a polarized political environment.” But over the next decade, Oliver Wyman expects more stability. Here are five ways the consulting firm anticipates the ACA to evolve over the next 10 years.
With the Rise of AI, What IP Disputes in Healthcare Are Likely to Emerge?
Munck Wilson Mandala Partner Greg Howison shared his perspective on some of the legal ramifications around AI, IP, connected devices and the data they generate, in response to emailed questions.
- Marketplace success will be driven by scale
Oliver Wyman expects that the greatest market share will go to large carriers “with enough scale to handle changing regulations and the ability to take risks in entering new markets.” Carriers with a national presence have a better chance of expanding offerings locally and forming more sustainable partnerships with local health systems. As of right now, Centene has the greatest ACA market share, as its membership has grown 75% year over year.
“Centene attributes its success to pricing discipline, execution on clinical initiatives, and thoughtful risk adjustment calculations,” Oliver Wyman said. “We believe that Centene’s large national footprint also helped it thrive. Scale allows carriers to diversify their risk pool and minimize risk, have greater negotiating power with health systems, take risks with new product offerings, and leverage their brand to increase membership.”
In the future, Oliver Wyman expects the ACA Marketplace to be dominated by one or two major insurers. This is similar to Medicare Advantage, in which UnitedHealthcare and Humana account for about half of the MA market share.
A Personalized Approach to Medication Nonadherence
At the Abarca Forward conference earlier this year, George Van Antwerp, managing director at Deloitte, discussed how social determinants of health and a personalized member experience can improve medication adherence and health outcomes.
- ICHRA could disrupt the industry
Individual Coverage Health Reimbursement Arrangement (ICHRA) membership will further increase, which will move more consumers to ACA coverage. ICHRA went into effect in 2020 and allows employers to provide a tax-free reimbursement to their employees so they can shop for a health plan of their choice (including through the individual ACA market on state exchanges).
ICHRAs have grown about 350% since 2020. About 200,000 to 500,000 people are using ICHRAs, and this is expected to reach 2 million people by 2032.
“Increased ICHRA membership will be fueled by state-specific tax breaks like a $400 tax credit in Indiana, expansion of the benefit by small employers through enhanced awareness, and crossover from traditional group plans. … Adoption is difficult to predict but momentum could be fueled by technology advancements making it easier for employers to build ICHRAs into their benefits platforms, regulatory changes to further promote their use, and adoption by large employers that would lead to a domino effect,” Oliver Wyman said.
- Carriers will create networks designed for the Exchange
About 72% of ACA Exchange plans in 2019 were narrow networks. Many ACA Exchange members are willing to have narrow networks to lower costs and will stick with brands they trust.
“Payers have achieved this in a wide variety of ways, including payer-provider partnered products like Banner|Aetna and co-branding like Cigna + Oscar for small group and Aetna CVS Health,” Oliver Wyman said. “When these plans work well, patients feel more incentivized to stay in network and having a tight relationship with a healthcare system leads to improved care management, better outcomes, and reduced costs. Having a differentiated network or a co-branded plan with a health system can set plans apart and increase enrollment numbers.”
Oliver Wyman noted that since ACA Exchange members have a “wide range of health history and experiences,” tiered network options may be beneficial. For example, insurers can offer both broad and narrow options to support different people.
- More states will move to State-based Exchanges
A CMS proposed rule would require states to work as a State-based Marketplace on the federal platform for a year before they move to their own Exchange. Oliver Wyman anticipates more states moving to State-based Exchanges over the next 10 years. For 2024, there are 19 State-based exchanges and three State-based Exchanges on the federal platform. As states transition to State-based Exchanges, insurers should anticipate expanded open enrollment periods, better Medicaid coordination and expanded subsidies.
“Carriers should expect change during SBE transitions but can use this period to improve enrollment numbers and build goodwill with regulators,” Oliver Wyman said. “As payers expand to new states, it is imperative that they become well-versed in the nuances of each state exchange to be successful in each market.”
- “Seamless member experience” will be essential
Younger generations are expecting “seamless digital experiences, personalization and transparency.” And those buying on the Exchange are often cost-conscious and receive subsidies for their insurance.
“Consumers want to work with an insurer that offers easy-to-use coverage; the ability to shop for the appropriate doctor, including by cost; access to low-cost prescriptions; and that has a hassle-free claims process,” Oliver Wyman said. “Transparent pricing and flexible plan features will keep members happy with their plan, and having a seamless, well-integrated consumer experience will encourage them to stay with their current carrier.”
Photo: kroach, Getty Images
