1、Healthcare PracticeThe individual health insurance market in 2023This represents an outsize year for insurer and enrollment growth.More than 3.6 million new consumers entering the market are choosing among an average of 88 plans.by Edith Chan,Brandon Flowers,Himani Kohli,and Isaac SwaimanApril 20232

2、The individual health insurance market in 2023The year 2023 marks the tenth year of operation for the US health insurance exchanges since they launched as part of the Affordable Care Act in 2014.The individual market has remained fluid during this time,with insurer participation,pricing,and plans ch

3、anging from year to year.Consumer participation increased 25 percent to approximately 16 million from 2020 to 2022,1 coincident with extended enrollment periods2 and enhanced subsidies implemented under the American Rescue Plan Act of 20213 and extended through 2025 by the Inflation Reduction Act of

4、 2022.4 We have collected and analyzed data from every health insurance exchange in the country across the 33 marketplaces on the federal platform and the 18 state-based marketplaces at the county level(see sidebar,“Methodology”).This document includes several insights into the individual market for

5、 2023 that are relevant to stakeholders,including insurers,providers,private equity firms,policy analysts,and consumers:1 McKinsey Enrollment Projection tool,with estimates based on 2021 insurer-reported financials,2022 open-enrollment-period results,and 2022 Unified Rate Review Template data.2“CMS

6、extends open enrollment period and launches initiatives to expand health coverage access nationwide,”Centers for Medicare&Medicaid Services(CMS),US Department of Health and Human Services(HHS),September 17,2021.3“H.R.1319:American Rescue Plan Act of 2021,”117th Congress,March 11,2021.4“H.R.5376:Infl

7、ation Reduction Act of 2022,”117th Congress,August 16,2022.5“Bright Health Group announces it will withdraw from the individual market in every state,including California,at the end of 2022,”Covered California,October 18,2022.6“Fact sheet:HHS Notice of Benefit and Payment Parameters for 2024 propose

8、d rule,”CMS,December 12,2022.7“Fact sheet:Marketplace 2023 open enrollment period report:Final national snapshot,”CMS,January 25,2023.8“Unwinding the Medicaid continuous enrollment provision:Projected enrollment effects and policy approaches,”Issue brief HP-2022-20,Office of the Assistant Secretary

9、for Planning and Evaluation(ASPE),HHS,August 19,2022.Participation continues to grow across almost all insurer categories,as it has since 2018,although the growth rate has slowed in 2023.Participation in 2023 increased most in the national insurance carrier(nationals)category,while participation in

10、the insurtech category declined,driven primarily by the exit of Bright Health.5 Consumers continue to have increased choice in product offerings in 2023,given increased insurer participation and an increase in the number of plans offered by participating insurers.Beyond 2023,this trend could be affe

11、cted by regulations recently proposed by the Centers for Medicare&Medicaid Services(CMS)for federally facilitated marketplaces(FFM),which would limit the number of plans each insurer can offer starting in 2024.6 Plan premiums have increased modestly in 2023(a median increase of 4 percent for the low

12、est-price silver plan)following four consecutive years of almost no premium changes.These increases have occurred across insurer categories and metal tiers,although insurtechs increased premiums the most.National insurers are offering more competitively priced silver-level plans compared with last y

13、ear.They currently offer the lowest-price silver option available to 20 percent of consumers,up from 6 percent in 2022.Medicaid insurers and Blue Cross Blue Shield insurers(Blues)continue to provide the lowest-price silver plan option for the largest share of consumers on the individual market(30 pe

14、rcent of and 25 percent of consumers,respectively).Looking ahead,consumer participation could continue to grow.Open enrollment results from November 1,2022,through January 25,2023,show 13 percent growth from 2022.7 The upcoming resumption of Medicaid redeterminations,which states may begin as early

15、as April 2023,could result in an estimated additional 2.7 million individuals becoming disenrolled from Medicaid coverage and eligible for individual market premium subsidies.8 Introduction3The individual health insurance market in 2023Findings in this document are based on publicly available inform

16、ation.Rates for 2014 through 2023 come from the McKinsey Exchange Offering Database,which includes county-and plan-level information from publicly available rate filings and healthcare.gov.The consumer population is defined as the population that has enrolled in any type of individual coverage,inclu

17、ding on-exchange and off-exchange plans.Full-year enrollment for 2022 is projected.The data for prior years in this article is slightly different from the data in last years article1 because we undertook some additional preprocessing steps(for example,cleaning,quality assessment,validation,and addin

18、g missing data).We also refreshed the data to consistently account for M&A activity over the years.Due to data availability limitations,the analysis excludes the following counties in New York:2020:Herkimer,Montgomery,Orleans,Saratoga,Schuyler,Tompkins,Washington,Wayne,and Wyoming(combined estimated

19、 enrollment 12,969)2021:Chemung,Erie,Montgomery,Orleans,Saratoga,Washington,Wayne,and Wyoming(combined estimated enrollment 20,427)1 Stephanie Carlton,Mike Lee,and Arjun Prakash,“Insights into the 2022 individual health insurance market,”McKinsey,August 3,2022.Pricing.Pricing analyses in this docume

20、nt are based on on-exchange plans only;this report does not include off-exchange pricing data.For consistency,premiums were obtained for a 27-year-old nonsmoking individual without family or partner coverage.To understand the premium changes that consumers will see(before the impact of subsidies),we

21、 calculated the weighted average rate change in premiums from 2022 to 2023 for the lowest-price silver plan in each rating area and county combination.First,we established a distribution of individuals using individual market plans in each county based on Federal Information Processing Standards(FIP

22、S)codes.Next,we combined this population distribution with data about premiums for lowest-price silver plans in 2022 and 2023.Finally,we used the 2022 and 2023 premiums to calculate weighted average rate changes for all 50 states and the District of Columbia individually and collectively.Insurer par

23、ticipation.To calculate insurer participation,including the consumer view of insurer participation,we analyzed the number of unique insurer parent companies that are offering plans on exchanges.Insurer categories.Insurer categories are defined as follows:Blues:insurers that are members of the Blue C

24、ross Blue Shield Association Consumer operated and oriented plan(CO-OP):a recipient of federal CO-OP grant funding Medicaid:an insurer that also operates as a managed care organization(MCO)and whose main line of business outside of individual coverage is in Medicaid National:a multistate,non-Blue in

25、surer with a nationwide commercial footprint(for example,Aetna CVS Health,United HealthCare,Cigna)Provider:an insurer that also operates as a provider or health system Regional/local:a nonprovider,non-Blue insurer with a presence typically in a single state,but that may include a collection of state

26、s with regional focus Insurtech:a venture capitalbacked insurer,typically with an innovative,tech-first value proposition(for example,Bright Health,Friday Health Plan,Oscar Health)Methodology4The individual health insurance market in 2023Plan types.Plan types reported here were taken directly from i

27、nsurer rate filings and summary of benefits and coverage documents.Independent assessment of plan types was not part of the analysis presented in this document.Plan types are defined as follows:HMO:A health maintenance organization is a plan typically centered on a primary-care physician who acts as

28、 a gatekeeper to other services and referrals.It usually provides no coverage for out-of-network services,except in emergency or urgent-care situations.EPO:An exclusive provider organization is a plan similar to an HMO.It usually provides no coverage for any services delivered by out-of-network prov

29、iders or facilities except in emergency or urgent-care situations;it generally does not require members to use a primary care physician for in-network referrals.2“How to pick a health insurance plan:The health plan categories:Bronze,Silver,Gold&Platinum,”healthcare.gov,accessed March 11,2023.3“How t

30、o pick a health insurance plan:Catastrophic health plans,”healthcare.gov,accessed March 11,2023.PPO:A preferred provider organization is a plan that typically allows members to see physicians and get services that are not part of a network;out-of-network services often require a higher copayment.POS

31、:A point-of-service plan is a hybrid of an HMO and a PPO;it is an open-access model that may assign members to a primary care physician and usually provides partial coverage for out-of-network services.Level of plan coverage.Metal levels indicate the share of covered medical costs paid by the plan v

32、ersus the share paid by consumers in the form of deductibles,copays,and coinsurance.Generally,premiums are higher when the plan covers a larger share of expenses.2 Platinum:Plan pays approximately 90 percent of covered expenses.Gold:Plan pays approximately 80 percent of covered expenses.Silver:Plan

33、pays approximately 70 percent of covered expenses.Some consumers with lower incomes(between 100 and 250 percent of the federal poverty limit)qualify for cost-sharing reductions,which increase the proportion of expenses paid by the plan at no extra cost to the consumer.Bronze:Plan pays approximately

34、60 percent of covered expenses.Catastrophic:Plan has very low monthly premiums and very high deductibles,providing protection for high-cost medical situations.Only individuals under 30 or with an exemption based on affordability or other hardship are eligible to purchase catastrophic plans.35The ind

35、ividual health insurance market in 2023201420152016201720182019202020212022101315171918151416605850534949474442161519754445866777875478141718212218225814The individual marketplace grew to approximately 16 million enrollees in 2022Heading into the 2023 open enrollment period,consumer participation in

36、creased to more than 16 million in 2022.Approximately 42 percent of members were enrolled with Blues in 2022,down 18 percentage points from their high in 2014.Insurtechs enrolled 14 percent of members,a 12-percentage-point increase since 2019.6The individual health insurance market in 2023Insurer pa

37、rticipation continued to grow in 2023,although at a slower rate Insurer participation increased in 2023 for the fifth consecutive year to 303 insurer participants at the state level,nearly matching the all-time high of 306 in 2015.Twenty-six new insurers entered at the state level in 2023(a 9 percen

38、t increase in participation),compared with 48 and 35 new entrants in 2022 and 2021,respectively.This increase was offset by the exit of 20 insurers(a 7 percent decrease)at the state level.The overall net increase of six insurers(a 2 percent increase)in 2023 is lower than the increases observed in th

39、e previous four years,which ranged from 11 to 16 percent.2493062882191812022272552973038437946027620652510821273548267The individual health insurance market in 2023National insurers expanded participation the most from 2022 to 2023,and insurtechs were the only insurer category to see declines Althou

40、gh insurtechs have been a major contributor to participation growth in recent years,they experienced a retrenchment in 2023,with Bright Health exiting the market and Friday Health Plan pausing operations in some states.9 All other insurer categories were stagnant or grew in 2023,with national insure

41、rs driving the largest increase in participation.As of 2023,59 percent of consumers have access to a plan from a national insurer,up from 47 percent in 2022.Blues(98 percent)and Medicaid(76 percent)insurers still provide access to the most consumers nationwide.9 Priscilla Waggoner,“Friday Health Pla

42、ns scaling back from 7 states to 5,”Valley Courier,November 4,2022.20142015201620172018201920202021202220236269716150525660606360605858495254596062407971269111422395035363430283133353943283536323137404150562325147555555124591425334424201420162018202020220204060801008The individual health insurance m

43、arket in 2023Consumer choice of insurers and products has increased substantially over the past five yearsConsumer access to multiple insurer options has increased along with insurer participation over the past five years,with 87 percent of consumers having access to three or more insurers in 2023.T

44、his is unchanged from 2022 but up from 49 percent(an increase of 38 percentage points)since 2018.Just 4 percent of counties had access to only a single insurer in 2023,down from 52 percent in 2018.Additionally,consumers continue to have more choices,with insurers offering 17 percent more plan option

45、s in 2023 than in 2022 and more than three times the number of offerings in 2018.On average,a consumer can choose among five insurers and 88 plans in 2023,compared with three insurers and 27 plans in 2018.With the goal of simplifying the shopping experience for consumers,CMS included regulations as

46、part of the HHS Notice of Benefit and Payment Parameters for 2024 proposed rule that would limit insurers in FFM states to offering two nonstandardized plans(in addition to one standardized plan,which insurers are required to begin offering starting in plan year 2024)per product network type(for exa

47、mple,HMO,PPO)and metal tier.10 We estimate that if this rule had been in effect for plan year 2023,the average number of plan options available to FFM consumers would be 34 percent lower overall,with a 45 percent reduction in nonstandardized plan options.10 Standardized plans have a standard actuari

48、al value,maximum out-of-pocket cost,deductible,and cost sharing for a given metal level of coverage.In 2022,nine states required Health Insurance Marketplace insurers to offer standardized plans,and six limited the number of nonstandardized plans on their state-based marketplaces.“HHS Notice of Bene

49、fit,”December 12,2022;Rose C.Chu et al.,“Facilitating consumer choice:Standardized plans in health insurance marketplaces,”Issue brief HP-2021-29,ASPE,HHS,December 28,2021.9The individual health insurance market in 2023201420152016201720182019202020212022202350493628251917141414333644524847474747538

50、799885544981211192630343629PPO1HMO2POS3EPO4201420152016201720182019202020212022202386677875432929313131333435373733363841403838413835252322171818181719246633432211CatastrophicBronzeSilverGoldPlatinumGrowth in product availability has varied by plan type and metal tierAlthough overall product offerin

51、gs have increased substantially,this growth has not been consistent.In 2023,82 percent of plans available to consumers are HMO or EPO plans that generally do not provide out-of-network coverage,with the proportion of HMOs relative to EPOs increasing in 2023.In 2014,HMOs and EPOs represented a combin

52、ed 42 percent of offerings,with the increase coming at the cost of PPO and POS offerings,which have declined from 58 percent in 2014 to 18 percent in 2023.A higher proportion of plans available to consumers in 2023 are gold plans(24 percent,compared with 19 percent of total product offerings in 2022

53、).Proportions across other tiers in 2023 are largely consistent with recent years,including a six-percentage-point increase in availability of bronze plans since 2018,with proportional decreases in platinum and catastrophic plans.10The individual health insurance market in 20235051015202530352014152

54、01516201617201718201819201920202021202122202223CatastrophicBronzeSilverGoldPlatinumRates for plans increased in 2023 across metal tiers and plan categoriesGross premiums in 2023 increased across all metal tiers after four years of relative premium stability or declines.Platinum and catastrophic plan

55、s saw the highest rate increases in 2023,at 10 percent and 5 percent,respectively.Increases for gold plans were relatively modest at 2 percent.Premiums for the lowest-price silver plan also increased across all plan categories,with the highest increases coming from insurtechs.11The individual health

56、 insurance market in 202310010203040100102030401001020304010010203040ProviderBlue1MedicaidInsurtech2100102030401001020304010010203040Regional or localNationalCO-OP3Premium changes varied by insurer typeFrom 2022 to 2023,83 percent of all consumers enrolled across all insurer categories saw at least

57、some increase in lowest-price silver premiums.The insurtech category had the largest increases in 2023,with a median increase of 8 percent,compared with 4 or 5 percent for Blues,nationals,Medicaid,and regional insurers,and 2 percent for provider plans.A greater share of national insurers had decline

58、s in silver premiums from 2022 to 2023,compared with other insurers;but on average,the provider and CO-OP categories had the most stable premiums.12The individual health insurance market in 20232014201520162017201820192020202120222023914182020141415161645262629303323322725222621943356208343787635514

59、2321111111162736363831282830213211418220142015201620172018201920202021202220232523252828262524202124202026272624232020162625125569131714121214151515141314985332222211111315171818161718112571113158National insurers improved their price position in 2023Nationals now offer the lowest premiums for silve

60、r plans for 20 percent of consumers in the individual market,an increase of 14 percentage points from 2022.This increase is offset by a similar decrease in price leadership for insurtechs from 2022(price leader in silver for 18 percent of consumers)to 2023(price leader in silver for 2 percent of con

61、sumers).Medicaid and Blues plans maintain the highest proportion of price leadership in 2023,offering the lowest-cost option for 30 percent and 25 percent of consumers,respectively.Edith Chan is an associate partner in McKinseys New York office;Brandon Flowersis a partner in the Washington,DC,office

62、;Himani Kohli is a consultant in the Delhi office;and Isaac Swaiman is a senior expert in the Minneapolis office.The authors wish to thank Stephanie Carlton,Ankit Jain,Mike Lee,Amy Li,Avantika Mishra,and Zoe Williams for their contributions to this article.Copyright 2023 McKinsey&Company.All rights reserved.Scan Download PersonalizeFind more content like this on the McKinsey Insights App