Tremendous Growth in 2024 Health Insurance Exchange Membership
For the past year, Medicaid has been the predominant topic of conversation for those who monitor insurance market share shifts. Medicaid enrollment peaked at 94.5 million in April 2023, when states resumed eligibility redeterminations after a multi-year pause. In the year that followed, Medicaid enrollment declined 10.4%, and has continued to plummet in recent quarters, with this channel losing nearly 4.9 million beneficiaries from Q3 to Q4 2023.
As a direct result of this decline, membership in health insurance exchange plans is now on the rise. What do these large-scale changes in membership mean for providers, manufacturers, payers and health IT vendors?
Let’s take a look at the data from AIS Health’s Directory of Health Plans, an MMIT product, which recently released its Q1 2024 update for enrollment numbers across all lines of business.
Huge Gains in Health Insurance Marketplace
The update gave us the first clear look at the 2024 public health insurance exchange’s record-breaking open enrollment season. In just one quarter, this segment grew by nearly 3.4 million members. This tremendous jump was driven largely by ongoing Medicaid disenrollments as exchange plans continue to pick up individuals who no longer qualify for Medicaid.
The rise in health exchange plan enrollment has also been driven by higher premium subsidies for a larger subset of individuals. Thanks to the Inflation Reduction Act’s extension of the 2021 American Rescue Plan (ARP), which eliminated the so-called subsidy cliff, premium subsidies are still available to eligible members whose income is more than 400% of the poverty level—at least until 2025.
Next year also marks the end of ARP’s fixed, income-based premiums, which cap the amount individuals can pay for a health exchange plan based on their income. Unless lawmakers vote to extend premium tax credits or pass another healthcare reform act, many predict that millions of health exchange members will become uninsured in 2026. Given the presidential election in November, the likelihood of additional movement in this arena depends on the incoming administration.
As expected, the health exchange behemoth Centene Corporation benefitted the most this quarter, adding 827,000 new exchange members, predominantly in Florida, Georgia and Tennessee. Aetna also fared well, gaining about 572,000 new members—many in Florida, Georgia and North Carolina—following its expansion in numerous markets. And despite a recent membership uptick, this quarter Cigna lost nearly 330,000 members, primarily in Georgia and Texas.
Medicaid Membership Still Falling
This past quarter, Medicaid HMO membership continued its decline at a less precipitous pace, losing 238,000 beneficiaries. This decrease is offset in part by Oklahoma’s entry into managed care, which saw nearly 540,000 beneficiaries enrolled in the state’s new Medicaid HMO plans with Centene, Aetna and Humana.
Membership in Medicaid fee-for-service (FFS) plans also continued to decline, dropping more than 1.1 million members after losing 956,000 in Q4. As many states have delayed reporting capabilities for their FFS plans, we may not see the full scope of this drop-off for several weeks; nonetheless, it’s clear this segment of Medicaid is starting to catch up with the pace of managed care.
States losing the most membership in their FFS programs were Oklahoma (552,000 members), California (461,000 members) and Colorado (85,000 members). As Oklahoma transitioned to managed care in April, however, much of its loss can be attributed to its new HMO program. California also saw many FFS members transition to managed care.
As Medicaid data is highly state-specific, however, some states’ Medicaid HMO or FFS enrollment may actually increase this year due to various factors, including legislative changes and changes in how benefits and eligibility are structured. Ten states have not yet adopted the Affordable Care Act’s Medicaid expansion with enhanced federal matching rate; if any of these states plan an expansion, there will be hundreds of thousands of new Medicaid beneficiaries.
Declining Commercial Plan Membership
Enrollment in commercial group plans has seen significant decreases since Q4 2023. Group risk plans—both employer-based group and individual health plans—dropped nearly 953,000 members, while self-funded plans and administrative services only (ASO) plans lost 1.36 million members, the bulk of them the result of UnitedHealthcare’s loss of a foreign contract.
So far, these market segments don’t seem to be affected by disenrolled Medicaid beneficiaries, but that could change due to the lag between when employees gain insurance and when they appear on enrollment files. Of course, some former Medicaid members may opt to remain uninsured—especially if their employer coverage is deemed inadequate or too expensive.
Notable changes in the commercial market include Humana, which continues to wind down its commercial plans in order to focus on government-funded programs and specialty businesses. Humana lost 229,000 group risk members (a 67.6% decrease) and roughly 180,000 non-Tricare ASO members. UnitedHealthcare also lost members in both the risk and non-risk categories, dropping 1.57 million ASO/self-funded members and almost 165,000 in group risk lives.
On the upside, the quarter’s biggest gainer was Blue Shield of California, which made significant gains in both group risk (279,000 added members) and ASO membership (204,000 added members). These increases don’t include the insurer’s recent contract win as sole health plan on the California Public Employees’ Retirement System (CalPERS) contract, which is effective in 2025.
Enrollment Shifts Key to Ensuring Access, Identifying Growth Areas
For providers, understanding how these enrollment shifts will affect patient access is critical. Hospitals and health systems must stay on top of which therapies are covered by their patients’ plans and make policy and process changes accordingly to ensure access and maintain treatment continuity.
For health IT vendors, understanding enrollment shifts is also essential for identifying potential growth areas for clients. Market fluctuations must be monitored at the insurer level—not just the state level—to ensure that there are no missed opportunities. As different insurance channels have different coverage and network implications, it’s important to know exactly where members are in order to target the right markets.
Manufacturers also need to monitor large-scale enrollment shifts to determine access issues for their patient populations. Which channels are your patients moving into, and why? Are the majority of your patients moving from Medicaid to a health exchange plan, or are there large regional variations? Anticipating the access barriers your patients are likely to face this year—from inadequate coverage to the inability to schedule specialist appointments—is key to maintaining or improving the utilization of your therapy.
To track enrollment trends and payer affiliations, subscribe to MMIT’s Directory of Health Plans.
