Many of today’s headlines indicate more and more health insurance issuers are returning to the ACA Marketplace. As these announcements continue to increase, it’s clear there’s something attractive about the Marketplace to small and large company carriers alike.
So, what’s different now? Are there revenue opportunities today that weren’t there before? The short answer is yes. And as issuers look to expand their offerings, businesses within the industry should prepare for increased participation and competition. This significant shift for many health insurance issuers predates impending growth that can benefit everyone connecting with and providing services to the industry.
Some of the Latest Re-entry Announcements
The health insurance industry has been transforming over the last few years. There have been mergers and acquisitions among issuers, company rebranding efforts, and new coverage products altogether. Some of the latest re-entry announcements demonstrate an increased popularity of returning the ACA Marketplace with consumer coverage products as another growing trend. And those issuers are already seeing real ROI results.
Some sentiments among issuers are that today’s Marketplace represents a bigger pool of consumers. Some of the latest data suggests there are nearly 15 million Americans participating in Marketplace coverage right now. Certainly, the pandemic played a role in creating a new need for health insurance. Consumers faced job layoffs and loss of coverage. The government extended new benefits designed to make the Marketplace more accessible for those who needed it. And the current presidential administration is making revolutionary changes to the former Obamacare platform, making it easier and far more affordable for those who still need coverage. Opening the special enrollment period for the masses alone is making the Marketplace a viable option for thousands of American families over a longer period of time.
Health insurance issuers are also recognizing the Marketplace isn’t just more accessible to individuals; it’s also more stabilized as a platform. It’s possible for issuers to identify and explore more competitive edge strategies, allowing for new revenue channels. Returning issuers, who once abandoned the Marketplace in years past, are flocking to capitalized on this opportunity due to increased stability.
Many Tried to Compete in the ACA Marketplace Before
Some health insurance issuers are new to the ACA Marketplace. But there are also several companies returning to the platform after having already tried competing there before. Issuers originally embraced Obamacare upon its early inception years ago. However, after experiencing skyrocketing costs and instability in participation, there were many large payers that made the decision to pull coverage options from the Marketplace.
The challenges issuers once faced may now be a thing of the past. And as these companies attempt to re-enter the Marketplace, the industry is recognizing the network as a whole is far more conducive to growth and opportunity today. Improvements over time, along with increased incentives and affordability for consumers, are making the Marketplace the hot spot to be. And while there will likely be new challenges, the growth potential is too big to ignore.
A Sign of Bigger Things to Come
Health insurance issuers’ officials continue to cite the attractiveness of the ACA Marketplace today. Over time, the platform itself improved, offering a more stable environment and flow of applicants. And more and more payers are sharing these sentiments internally and publicly.
The individual health insurance market is experiencing significant growth among its payer rosters. Some sources suggest 30 different organizations entered the market already this year. These latest introductions to the Marketplace, or those re-entry introductions, cover 20 various states and include more than 60 or so issuers expanding.
The previous presidential administration sought to eliminate portions of the ACA Marketplace and had plans for a complete dismantle. But with the oval office change to President Biden, the health insurance platform experienced an infusion of renewed interest, funding, and support. The current administration is vowing to expand and support the ecosystem as a whole, injecting additional funds and reducing tax penalties for individuals who enroll. These incentives, along with the pandemic effects on the economy, are driving enrollment numbers significantly, forcing payers and organizations to reconsider the individual health insurance marketplace as a revenue-generating venue.
What the Data Is Projecting
The Kaiser Family Foundation compiled health insurance issuer information to identify growth and trends. Over the last three years, the ACA Marketplace continues to grow steadily in terms of enrollees and participation. Issuers and payers are taking notice and have also returned to the market with product offerings. In one data set, KFF reports 78% of individuals, across 46% of all counties, now have three or more health insurers from which to choose in 2021. More than 200 U.S. counties will have more than five issuers in the pool for 2021.
What issuers look for most, of course, is an opportunity for revenue. It has to make financial sense to the bottom line to offer products via the Marketplace. And despite the pandemic climate, the political firestorm, and economic hardships, existing issuers within the ACA Marketplace continue to see increased margins. Even with the costs of COVID-19 testing and treatment, those bottom lines continue to impress. With the initiation of the American Rescue Plan from the Whitehouse, even more savings at the individual level are driving enrollment and participation numbers. These market conditions represent a renewed stability, like many health insurance company representatives believe, making the individual health insurance segment more attractive and potentially lucrative.
As a business within the ACA Marketplace, these health insurance companies re-entering the arena is a sign of a growing movement. More issuers will likely follow suit across various states and counties nationwide. If your product or service offering isn’t ready to meet the predicted demand, now is a great time to re-evaluate your strategic positioning. Getting your software and connectivity platforms ready requires an industry-savvy partner with robust solutions for every level of digital engagement.
Contact Softheon today to explore your upgrade options, so your business is ready to grow with the countless payers within the ACA Marketplace. From data management to infrastructure, SaaS, and BPaas, Softheon can help your company keep up with growing participation and demand!