Published on August 6th, 2022.

It has been eight years since the Affordable Care Act’s health insurance exchanges launched in 2014.

During that time, the individual market has been highly fluid, with insurer participation, pricing, and plan types evolving dynamically from year to year. The 2022 open-enrollment period (OEP) allows for an assessment of the latest movements in the individual health insurance market.

Several salient features have emerged, particularly in light of the substantive changes created by the American Rescue Plan Act of 2021. Using data scraped from nearly every health insurance exchange in the country, McKinsey’s Center for US Health System Reform has uncovered critical insights relevant to consumers, payers, providers, private equity sponsors, and policy analysts.

The Center for US Health System Reform’s analysis of the 2022 OEP led to the following conclusions:

• Insurer participation and new product offerings have accelerated in the past four years (the halfway point since the marketplace launched), with levels near or surpassing their all-time peaks.
• Managed-care plans—particularly health maintenance organization (HMO) plans and exclusive provider organization (EPO) plans—have grown steadily since 2014 and now account for 82 percent of plan type offerings.
• Consumers increasingly have access to more insurer choices and plans in their home counties; only about 2 percent of consumers have access to just one insurer.
• Across all plan tiers, prices (premiums) remained largely stable, with only slightly higher price increases in 2022 than in 2021; consumer cost burden was also reduced by additional subsidies created by the American Rescue Plan Act.
• Annual premium growth of plans in the 15 states with section 1332 innovation waivers was observably lower than similar plans in the 35 states plus Washington, DC, without waivers.

Overall, the individual market has continued its recent trajectory of increased participation by insurers and consumers. Pricing has largely stabilized in the past several years, and consumer access has grown as newer, tech-enabled insurers bring greater choice to the market.

But uncertainty remains, in part because the enhanced premium subsidies created by the American Rescue Plan Act are due to expire at the end of 2022. If Congress does not renew these subsidies, pricing and consumer participation may face headwinds in the 2023 OEP.

Insurer offerings continue to increase

Over the past four years, product offerings have nearly tripled, with approximately half of that growth happening between 2021 and 2022 alone.

In-market growth represented about 50 percent of total product growth between 2021 and 2022, accounting for a larger share of total growth than during any of the previous four years, highlighting insurers’ strategy of competing on the number and variety of offerings in the market.

Insurer types generally increased their participation

Participation by number of insurers is approaching its 2015 peak and has increased for four years straight.

Tech-enabled and Medicaid plans, such as Oscar and Bright Health, have seen substantial growth since 2014, contributing the most to overall participation growth, while other types have declined or stayed relatively stagnant.

Conversely, participation among Consumer Operated and Oriented Plan (CO-OP) insurers has largely declined since 2016.

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