The ACA in 2014: Significant Insurer Losses

The Affordable Care Act (ACA) significantly altered the individual insurance market through a host of new rules and requirements. Among its central changes, the ACA required insurers to offer coverage to any applicant but restricted insurers from charging premiums that properly reflect health status and age. This made health insurance relatively more attractive to older and less healthy people and relatively less attractive to younger and healthier people. For insurers offering Qualified Health Plans (QHPs)—plans certified to be sold on the new ACA exchanges—in the individual market, a key question was whether enough young and healthy people would enroll to create a stable risk pool. Achieving this balance is also the key determinant as to whether the law’s changes are sustainable, or whether they will lead to the deterioration of the individual market for insurance.