This analysis reflects carrier participation, pricing, and plan type trends for the 2020 individual exchange open enrollment period. Findings are across 50 states and DC.

1. CONFIDENTIAL AND PROPRIETARY
Any use of this material without specific permission of
McKinsey & Company is strictly prohibited
February 2020
Center for US Health System Reform
Insights into the 2020
Individual market –
increased consumer choice
and decreased premiums

2. McKinsey & Company 2
Carrier
Participation

3. McKinsey & Company 3
1. Carrier participation increased in 2019 and 2020,
following 3 years of decline1
Source: McKinsey Center for US Health System Reform analysis of federal and state individual marketplace data
Exchange participation by year
Count of carriers at the state level
Incumbent carriers Carrier exits New entrants
Note: New entrants includes carriers that newly filed individual exchange plans in a given state, as well as carriers that were already participating in a state, but filed plans under
additional and/or different set of entities
1. Carrier considered to exit due to acquisition; the acquiring carrier is participation on exchange, resulting in a net change in carriers to the state of 0
2014 '15
exits
'15
new
entrants
2015 2016 2017 2018 2019 2020
total
'16
exits
'16
new
entrants
'17
exits
'17
new
entrants
'18
exits
'18
new
entrants
'19
exits1
'19
new
entrants
'20
exits
'20
new
entrants
282 19
77 333 49
31 315 90
10 235 49
8 194 1
25 218 1
27 245

4. McKinsey & Company 4
2. Regional/local carriers are expanding participation
more than other carrier types
Exchange participation by year and carrier type
Count of carriers
75 74 73 70 60 64 67
64 73 75
62
51 54 58
37
40 39
37
39
50
64
32
36 37
33
31
37
39
50
85 77
25
24
25
14
2014 15 16 17 18
282
19
12
2020
333
315
234
194
218
245
8
8
Source: McKinsey Center for US Health System Reform analysis of federal and state individual marketplace data
5
7
5
5
Blue Provider Regional/local Medicaid National CO-OP

5. McKinsey & Company 5
3. Managed care plans (including HMO and EPO)
are continuing to make up a higher percentage
of individual marketplace offerings
Plan type trends by year
Percent of exchange plan offerings
8% 7% 9% 8% 8% 8%
50% 49%
36%
27% 24% 19%
16%
9% 8%
12%
12% 19% 26%
30%
33% 36%
43%
52% 49% 47% 48%
1816152014 17 19 2020
5%
Source: McKinsey Center for US Health System Reform analysis of federal and state individual marketplace data
POS PPO EPO HMO

6. McKinsey & Company 6
4. Consumer access to most carrier types is increasing
in 2020
Exchange participation by carrier type
Percent of consumers with access to plan1,2
97 97 95 93
80
84
89
29
34 37
43
49
53
5855 57 57
49 48 49 49
53
71
75
27
9 11 14
36 38 39
35
30
36
52
32 34
17
5 3 3 3
17152014 16 1918 2020
12.7 12.2 11.8 11.4
Source: McKinsey Center for US Health System Reform analysis of federal and state individual marketplace data. Kaiser
Family Foundation.
1. Consumers defined as the population that has enrolled in any type of individual coverage, including both on-exchange and off-exchange plans; enrollment for 2020 is projected
2. Access defined as the carrier type offering at least 1 on-exchange silver plan in a given county
Blue Medicaid Provider National Regional/Local CO-OP
8.0 11.6
Estimated individual market enrollment, millions
To be determined –
federal exchange data
steady

7. McKinsey & Company 7
5. The proportion of counties with a single carrier
decreased from 36% in 2019 to 25% in 2020
Exchange participation by county1
Count of carriers
2019 2020
1 participating carrier 2 participating carriers3-4 participating carriers 5+ participating carriers
Source: McKinsey Center for US Health System Reform analysis of federal and state individual marketplace data
1. For 2020, due to data limitations the analysis excludes 9 NY counties with an estimated 2020 enrollment of 10,932: Herkimer, Montgomery, Orleans, Saratoga, Schuyler,
Tompkins, Washington, Wayne, and Wyoming

8. McKinsey & Company 8
6. ~9% of consumers have a single carrier offered
in their county, and ~66% of consumers can choose
from at least 3 carriers
Consumer choice of carriers
Percent of consumers with a given number of carrier options in their county1,2
32%
53%
48%
22%
15% 15%
26%
42%
36%
38%
37%
35%
44%
40%
20%
9% 12%
23%
26%
25%
25%
6%
17%
25%
16%
9%
172014 15
3%
16
2%
1918 2020
Source: McKinsey Center for US Health System Reform analysis of federal and state individual marketplace data
1. Consumers defined as the population that has enrolled in any type of individual coverage, including both on-exchange and off-exchange plans; enrollment for 2020 is projected
2. Counting carriers that offer at least 1 on-exchange silver plan at a parent company level
1 carrier 5+ carriers3-4 carriers2 carriers

9. McKinsey & Company 9
Pricing

10. McKinsey & Company 10
7. Premiums for all metal tiers except platinum declined1
Change in gross premium by metal tier and year
Median change in gross premium (before subsidies) of the lowest-price plan by metal tier
9
11
24
12
-1
-1
2014-2015
2015-2016
2016-2017
2017-2018
2018-2019
2019-2020
7
15
27
18
10
-2
-1
4
13
25
31
1
-1
5
15
32
12
-1
-1
11
23
22
18
2
3
Catastrophic Bronze Silver Gold Platinum
Source: McKinsey Center for US Health System Reform analysis of federal and state individual marketplace data
1. Premium changes may differ from CMS estimates due to differences in methodology including use of lowest cost plan rather than second lowest cost plan

11. McKinsey & Company 11
8. Across all carrier types, except national,
over half of consumers will see a decrease
in the lowest silver plan offered
Change in lowest price silver plan premium by carrier type
Projected percentage of consumers1 experiencing a premium change from 2019-2020
Source: McKinsey Center for US Health System Reform analysis of federal and state individual marketplace data
1. Defined as the population that has enrolled in any type of individual coverage, including both on-exchange and off-exchange plans. For 2020, this is projected based on 2019 data
9% 7%
13% 14%
40%
37% 30%
27%
43%
19%
36% 51%
50%
28%
33%
62%
16%
8% 13%
32%
10%
19%
ProviderMedicaidBlue Regional/local National CO-OP
0%
10%+ decrease 0-10% decrease 0-10% increase 10%+ increase
3%

12. McKinsey & Company 12
9. Regional/local and CO-OP plans filed the largest
premium decreases in 2020
Change in gross premium by carrier type
Median change in gross premium (before subsidies) of the lowest-price silver plan
Source: McKinsey Center for US Health System Reform analysis of federal and state individual marketplace data
Blue Regional/localProvider NationalMedicaid CO-OP
58 12 39 567 64
7%
12%
21%
28%
0%0%
5%
10%
21%
32%
6%
-5%
2%
8%
18%
28%
1%
3%
5%
10%
36%
38%
-1%
2%
-11%
-1%
6%
37%
1%
-1%
-9%
18%
31%
34%
7%
-8%
2014-2015 2015--2016 2016-2017 2017-2018 2018-2019 2019-2020 Number of carriers

13. McKinsey & Company 13
10. Plans offered by Medicaid or regional/
local carriers will be the lowest premium
option for over 50% of consumers
Price leadership by carrier type
Percent of consumers1 with carrier offering lowest-priced silver plan2
Source: McKinsey Center for US Health System Reform analysis of federal and state individual marketplace data
14
21
26
19
7
10
14
18
21
23
16 16
45
26
26
29 29
33
24
17
8
10
5 7
11 25
3
12
24
35 35 36
32
2014
5
15
2
16
3
17
4
2
18
31
19
31
2020
ProviderRegional/localMedicaid NationalBlue CO-OP
1. Defined as the population that has enrolled in any type of individual coverage, including both on-exchange and off-exchange plans. Enrollment for 2020 is projected
2. Denominator represents all consumers enrolled in individual coverage. Numerator represents consumers whose lowest-price on-exchange silver plan option was offered by a
given carrier type
These changes are driven by
an expansion of non-national
carrier plans into more counties
and the affordability of these
non-national carrier plans
The percentage of consumers
whose most affordable silver
plan option was offered by a
national carrier dropped from
26% in 2015 to 3% in 2020

14. McKinsey & Company 14
11. Premium declines were greater in states with
reinsurance programs
Change in median lowest price silver plan premium by state
Percent premium change from 2019-2020
Source: McKinsey Center for US Health System Reform analysis of federal and state individual marketplace data; Kaiser
Family Foundation - Tracking Section 1332 State Innovation Waivers
1. States with reinsurance programs that experienced premium increases from 2019-20 include NJ (11%), AK(2%) and RI (0.4%)
0-10% increase10% decrease 0-10% decrease 10%+ increase No significant change
Reinsurance program
9 of 12
with insurance
programs will see a decline
in the median lowest price
silver plan premium
Medium premium change for
states with reinsurance
programs was ~4% decrease
versus ~1% increase for states
without such programs
Reinsurance program

15. McKinsey & Company 15
Methodology
Findings in this document are based on publicly available
information. 2014 through 2020 rates come from the McKinsey
Exchange Offering Database, which includes county and plan
level information from publicly available rate filings and
healthcare.gov. The consumer population is defined as the
population that has enrolled in any type of individual coverage,
including both on-exchange and off-exchange plans. Enrollment
for 2020 is projected. For 2020, due to data limitations the
analysis excludes 9 NY counties with an estimated 2020
enrollment of 10,932: Herkimer, Montgomery, Orleans, Saratoga,
Schuyler, Tompkins, Washington, Wayne, and Wyoming
Pricing – All analyses in this document are for exchange plans
only; this report does not include off-exchange pricing data. To
understand the premium changes that individuals will face, we
calculated the weighted-average rate change in premiums
between 2019 and 2020 for the lowest-price silver plan in each
rating area/county combination. First, we established a
distribution of individuals using individual market plans in each
county (FIPs code). Next, we combined this population
distribution with data about 2019 and 2020 lowest-price silver
plan premiums. Finally, we used the 2019 and 2020 premiums
to calculate weighted-average rate changes for 50 states and
DC individually and collectively.
Carrier participation – To calculate the counts of carrier
participation, we analyzed the number of unique carrier names
that are offering plans on-exchange. In the case where a single
parent company offers plans under multiple carrier names, we
count each carrier separately. To calculate the consumer view
of carrier participation, we analyzed the number of unique parent
companies that are offering plans on-exchange, to be reflective
of what a consumer perceives
Plan types – Plan types reported here were taken directly from carrier
rate filings and Summary of Benefits and Coverage (SBC) documents.
Independent assessment of plan types was not part of the analysis
presented in this document. Plan types are defined as follows:
HMO: a health maintenance organization is a plan typically centered
around a primary care physician who acts as gatekeeper to other
services and referrals; it usually provides no coverage for out-of-
network services, except in emergency or urgent care situations
EPO: an exclusive provider organization is a plan similar to an HMO. It
usually provides no coverage for any services delivered by out of-
network providers or facilities except in emergency or urgent-care
situations; however, it generally does not require members to use a
primary care physician for in-network referrals
PPO: a preferred provider organization is a plan that typically allows
members to see physicians and get services that are not part of a
network, but out-of-network services often require a higher copayment
POS: a point-of-service plan is hybrid of an HMO and a PPO; it is an
open-access model that may assign members to a primary care
physician and usually provides partial coverage for out-of-network
services
Carrier types are defined as follows:
Blues: a Blue Cross Blue Shield payer
Consumer-operated-and-oriented plan (CO-OP): a recipient
of federal CO-OP grant funding that was not a commercial payer
before 2014
Medicaid: a carrier that offered only Medicaid insurance prior to 2014
National: a commercial payer with a presence on exchanges
Provider: a carrier that also operates as a provider/health system
Regional/local: a commercial payer with presence typically in a single
state, but may include multiple states