Exchanges go live: Early trends in exchange dynamics

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Our second brief on exchange dynamics is based on a comprehensive analysis of all exchange offerings across the entire US—more than 21,000 unique qualified health plans filed on the public exchanges in all rating areas.

After three and a half years of forecasting, data is now emerging from the individual exchanges that can inform the likely impact of the Affordable Care Act.1 The McKinsey Center for U.S. Health System Reform has developed a database covering more than 21,000 unique qualified health plans filed on the public exchanges in all 501 rating areas in the 50 states and District of Columbia.

This Intelligence Brief describes five trends emerging from the first few weeks of exchange data:

  • The competitive landscape in the individual market has changed considerably, given the number of new entrants
  • These new entrants are pricing competitively, but are not usually price leaders
  • Premium levels vary considerably, both within and across markets
  • Zero-net-premium products are widely available
  • “Managed-care-like” designs are re-emerging, particularly among the new entrants

We based our analysis of each of these trends on data accessed directly from the public exchanges as of October 15th, 2013.2 The situation remains dynamic, however, as there have been widely acknowledged challenges with the exchanges. Data releases are being refreshed regularly as the public exchanges resolve technical issues, and all analyses are contingent upon the accuracy of the information released. Accordingly, the trends described in this Intelligence Brief should be considered as directional indicators of how the public exchanges are likely unfolding, and not as conclusive proof of industry changes. Nonetheless, the trends can begin to inform both near-term and longer-term strategic actions.

  1. This analysis focuses on individual-exchange products, because they are the only plans that enable income-eligible consumers to receive the federal premium and cost-sharing subsidies. Complete off-exchange filings may not be available in every state until the end of 2013, and thus they have not been included in the analysis.
  2. All data was obtained directly from the public exchanges over the first two weeks of October, by shopping directly on all exchanges as well as through datasets released by the federal exchange.