Health Affairs August 7, 2017
The status of the market for individual health insurance has attracted considerable scrutiny recently. Premiums are high and rising, and insurers are exiting the market. Some believe that this is evidence of a death spiral in the market, reflective of inherent problems with the Affordable Care Act (ACA). Yet, other recent reports suggest a turn toward insurer profitability and market stability. Where does the truth lie?
The typical hallmarks of a death spiral are risk pool deterioration and declining enrollment, which drive rising premiums, which in turn drive greater beneficiary disenrollment. However, deterioration of the risk pools has been modest—on the order of 5 percent, on average, between 2014 and 2015—though this varied widely, with risk increasing by as much...
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