Several health insurers, including United Healthcare and Aetna, are scaling back their participation in the Affordable Care Act (ACA) health insurance marketplaces, and in some cases exiting the broader individual market, due to substantial losses in these markets. A commonly cited reason for these losses is a sicker-than-expected risk pool, meaning that on average enrollees in this market may have been sicker or higher-cost than insurers expected or priced for. There are a number of related factors that could contribute to losses for insurers in the individual and exchange markets, including competition to offer a low-cost plan and lower-than-expected benchmark premiums, changes to risk corridors payments, and some insurers having less effective cost control than their competitors.
It is also possible that state policy decisions – in particular, on Medicaid expansion and allowing transitional (“grandmothered”) plans to continue for a period of time – have had an effect on the risk pool …
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Data Note: Effect of State Decisions on State Risk Scores