Erica Hutchins Coe Discusses the Future of the ACA Health Insurance Markets

While some insurers are questioning the sustainability of the Affordable Care Act (ACA) health insurance markets, Erica Hutchins Coe, partner and co-leader of Center for US Health System Reform at McKinsey & Company, said that carriers continue to see new entrants on their exchanges, which she believes makes for a promising future. The presence and awareness of penalties for not signing up for coverage was also an influential factor in getting people to enroll.

Transcript (slightly modified)

Should there be any concerns about insurers questioning the sustainability of the ACA health insurance markets?

I think that in terms of the carrier’s potential view of exchange sustainability, there’s a few things that we can look to. In 2014, even though the majority of carriers lost money, there were about 30% of carriers who made money in the individual market, which does point toward some sustainability.

In addition, if we look at how many carriers are continuing to enter the market, in 2016, close to half of consumers across the country saw a new entrant on their exchange, which is also indicative of some positive views of the potential future of exchanges.

Do you think the increased fine for not enrolling in health insurance coverage played a role in the last open enrollment period?

I do think that it did. In our consumer research, we’ve done surveys of consumers across the country through the last 3 open enrollment periods and we’ve continued to find that the language around presence of penalty and awareness of penalty has a very big impact on who actually signs up for coverage so those folks that are aware of the amount of penalty they would face are much more likely to enroll than those who are not. And I think that as the amount continues to go up, we’ll see this affect be even greater.