Enrollment in the Individual Insurance Market Continued to Fall in the First Quarter of 2018, With the 12 Percent Overall Decline Concentrated in Off-Exchange Plans

Enrollment in the individual insurance market continued to shrink in the first quarter of 2018, declining by 12 percent compared to the first quarter of 2017, according to a new analysis from the Kaiser Family Foundation. The decline was concentrated in off-exchange plans where enrollees are not eligible for Affordable Care Act subsidies and have had to pay the full cost of recent premium increases.

At the same time, enrollment in plans sold through the ACA exchanges (also known as Marketplaces) has largely remained stable, increasing by 3 percent in 2018 after declining somewhat from a peak of 11.1 million people in 2016, the analysis finds.  In the first quarter of 2018, 10.6 million people had coverage through the ACA exchanges, including 9.2 million receiving federal premium subsidies. (A modest gain in enrollment among subsidized exchange enrollees was partially offset by a decline among those not eligible for federal help with their premiums.)

The departure of about two million people from the individual market overall in Q1 2018 follows a decrease in total enrollment in 2017. In both years, the steepest declines have been in off-exchange enrollment, which tumbled 38 percent in the first quarter of 2018 relative to the same period in 2017, the analysis finds.

As unsubsidized consumers drop plans or seek coverage elsewhere, people with low incomes who are eligible for ACA premium subsidies and those with pre-existing conditions make up an increasingly larger share of the individual market. Nearly two-thirds of enrollees in the total individual market were subsidized in the first quarter of 2018, the analysis shows. The trend is likely to continue in 2019 with the repeal of the individual mandate penalty and the expected expansion of short-term health plans, both of which would likely siphon away healthy people and push up premiums further.

The individual market comprises coverage purchased by individuals and families. As measured by insurance regulators, the market is in many ways a mixture of very different types of coverage: subsidized policies purchased through the ACA exchanges, ACA-compliant policies purchased on and off the exchanges and non-compliant short-term insurance plans and grandfathered non-compliant policies that were purchased before the ACA went into effect.

Despite the recent decline in overall individual market enrollment, there are still 14.4 million people enrolled as of the first quarter of 2018, compared to 10.6 million people in 2013, the year before the ACA subsidies and market rules protecting people with pre-existing conditions took effect. The biggest decline in individual market enrollment from 2015 to 2017 has been in non-ACA-compliant coverage.