A man coloring in "healthcare" in red with a great background

The third year of open enrollment for health insurance exchanges cuts a much different picture than its two predecessors.

In October 2014, the fits and starts of both state and the federal exchange led those of us who follow the industry to muse, “How could HHS be so unprepared?” Healthcare.gov got on track and finished strongly in 2014 open enrollment, leading to cautious optimism for 2015. Plan options grew immensely nationwide, and premiums did not deliver an anticipated spike.

With 2016 open enrollment upon us, it’s hard to know how to feel. The good vibes of 2015 could not last in all parts of the market. No insurer had based premium rates on a full year of claims. In 2016, they have a full view of membership and for many plans, rates rose accordingly, although some insurers held their rates to reasonable increases. Some outlier rates, like BlueCross BlueShield of New Mexico, were rejected by state regulators.

While narrow networks always formed a core of plan designs available in exchanges, few expected the PPO to vanish rapidly. For most carriers, a big network just isn’t profitable anymore. Huge carriers such as BlueCross BlueShield of Texas have struck their individual PPO products. Such moves further entrench narrow networks and exchange shoppers better know what network they want or risk losing their providers for a year.

The biggest change could be competition. Exchange markets are solidifying. New entrants beyond UnitedHealthcare are uncommon this cycle – Medica expanded into some new states, and some holdouts have joined their local exchanges. Some plans that tested their chances as a new line of business are retreating, especially small carriers.

Only two states have exchange markets with one carrier in 2014, West Virginia and New Hampshire. New Hampshire added four carriers in 2015. Now Wyoming joins West Virginia by only having one insurer offering plans. WINHealth Partners, the Wyoming exchange’s lead insurer, quit for 2016 after reinsurance payments fell short, the same fate that wiped out most Consumer Oriented and Operated Plans. At the present rate of collapse, the nation could be down to a half-dozen CO-OPs or fewer in a few weeks.

CO-OPs are part of a larger issue that 2016 exchange shoppers will face – churn. Many of these CO-OPs grew into market leaders, albeit their time at the top was fleeting. They’re gone now, and their members need to pick a new plan by Dec. 15 for continuous coverage. Exchanges from Utah to Minnesota to New York will have large populations signing up with new carriers. New networks, new benefits – by the time people figure them out, open enrollment 2017 will be looming.

Maybe by 2017 open enrollment, it will all seem like a bump or two in a long road. But it is more likely that any exchange open enrollment will be as hard to pin down as the preceding ones.

Twitter: @BillMelvilleDRG

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