The individual health insurance market is highly competitive, offering more consumer choice than ever before. More than 21 million people – including working families, entrepreneurs, early retirees and gig workers – choose their health insurance coverage through the Marketplace. In fact, affordable, stable options in the Marketplace have helped a record number of Americans gain the health, security and peace of mind that comes with quality, affordable coverage.
This growth is vital to the sustained availability of quality, affordable individual market coverage in communities nationwide because when more people are enrolled in a market, risk is spread more efficiently, and premiums will be lower and more stable for everyone.
Here’s how Marketplace coverage is working for millions of Americans, and how it can be strengthened for the future:
Affordability, Choice and Competition
Americans who shop for coverage through the Marketplaces are benefiting from a broad range of choices made available through robust competition.
- Consumers, on average, have a choice of plans from at least six insurers, including plans tailored for specific health conditions, or with $0 deductibles, or plans that can be paired with health savings accounts.
- Coverage is affordable for families and individuals with low and moderate incomes. Eight in 10 consumers are eligible for premiums under $10 per month after tax credits.
- Expanded tax credits have helped more middle-income Americans and small business employees access affordable coverage for themselves and their dependents.
Healthier Communities, Provider Stability and Support for Small Business
Beyond the direct impact on over 21 million people, affordable individual market coverage is vital for healthy communities and a stable health care system, with broader economic benefits in communities nationwide.
Research consistently demonstrates the relationship between having health coverage and experiencing better health outcomes. Having comprehensive health insurance coverage encourages enrollees to engage with a primary care provider and access preventive care, manage pre-existing conditions, close gaps in care and avoid emergency room visits.
A reliable individual market can help reduce the amount of uncompensated care hospitals provide. Most of those costs are then offset by government spending, meaning we all pay a hidden price when Americans are uninsured.
Affordable Marketplace coverage is also an enabler of entrepreneurship – empowering individuals to start a business secure in the knowledge that affordable coverage will be available to them. These coverage options also support small business, ensuring workers at small employers without job-based coverage have access to quality health coverage options. In 2021, one in four Marketplace enrollees were self-employed or small business owners.
Protecting Consumers and Taxpayers Through Accountability and Transparency
Consumer protections and risk adjustment mechanisms ensure that Marketplace coverage is available for all Americans who may need it, including people with pre-existing conditions.
Federal “MLR” rules also require that at least 80 cents of every premium dollar go directly to medical care and quality improvement. If a health plan doesn’t meet this threshold, the difference must be refunded to the consumer. The combination of a highly competitive marketplace and rebate protections ensure high value for consumers and taxpayers. In fact, in 2023, 84% of Marketplace premiums went to medical care alone.
Securing Coverage for the Future
Even with substantial progress, the Marketplaces can be further strengthened to ensure affordable coverage remains widely available to consumers well into the future. These are some common-sense steps to ensure the individual market continues to provide affordable coverage options for consumers and stability for the doctors and hospitals that care for them.
- Health plans need continued flexibility to offer innovative and differentiated coverage options that meet the diverse needs of people in this growing market. Choice and competition are working for consumers and should be built on.
- Current tax policies should be maintained to ensure millions of working families can keep their plans if they like them and to protect providers from the financial instability a sudden spike in uninsured patients would cause.
- It is also critically important that consumers can continue to count on the expertise of ethical brokers and navigators to help them make the health coverage choices that are right for them. CMS has recently taken important steps in this regard. The Insurance Fraud Accountability Act recently introduced in the U.S. Senate would further enhance consumer protections within the Marketplace.