2016 exchange market remains in flux:Pricing trends

OVERALL

MARKET VIEWPrices at county level

CONSUMER VIEW2

Prices weighted by QHP-eligible population

% SEEING INCREASE IN PLANS BY METAL TIER

Median rate increases across re-filed plans are higher than last year. Premiums of lowest-price silver plans have increased as well.

Median change in gross premium across all re-filed plans1

Percent of consumers who will see change in net premium of the lowest-price silver plan4

Despite higher increases in lowest-price silver plan gross premiums this year, a greater share of consumers seeing less expensive lowest-price silver net premiums this year than last year.

CATASTROPHIC BRONZE SILVER GOLD PLATINUM

10% 12% 15%

7% 8% 11%

7%10% 13%

KEY: 2014-2015

2015-2016

2014-2015 2015-2016

Median change in gross premium across lowest-price silver plans

YEARS:2014-’15

YEARS2015-’16

4.4% increase

13.2% increase

Findings across 50 states and DC

As of 11.04.2015

18%

46%

27%

9%

28%

38%

9%

25%

4%

KEY: Over 10% decrease

Within 10% decrease

Within 10% increase

Over 10% increase

McKinsey Center for U.S. Health System Reform

2016 exchange market remains in flux: Evolution of carriers and offerings I Page 1 of 4

Median change in gross premium across all re-filed plans1

2016 exchange market remains in flux:Pricing trends continued

BY GEOGRAPHY

MARKET & CONSUMER VIEW

QHP-eligible weighted average change in lowest-price silver plans' net premium

In many states, this year's lowest-price silver net premium changes are much different than last year’s.

KEY: 2014-2015

2015-2016

16% 15%

20%

4%

AK AL AR AZ CA CO CT DC DE FL GA HI IA

3%5%8%

4%

14%

6%

12%9%

25%

4%2% 1%

-3%

6%2%

-11%

18%

-10%

3%

12%9%

6%

RI SC SD TN TX UT VA VT WA WI WV WY

22%

4% 4%7%

0%

10% 10%6% 4%

11%11%

-1%

0%2%

-5%

4%

-5%

9%

-1%

13%

2%4%

7%8%

Prices at county level

McKinsey Center for U.S. Health System Reform

2016 exchange market remains in flux: Evolution of carriers and offerings I Page 2 of 4

ID IL IN KS KY LA MA MD ME MI MN MO MS

0%

10%

16%

5%1%0%

9%

2%3%

-7%

7% 8%

-1%

0%0%5%

-6%

18%

2%5% 6%

2%

18%

11%

16%

-1%

MT NC ND NE NH NJ NM NV NY OH OK OR PA

10%12%

1%0%2%1%

9%

26%

-3%

1%

6%

-4%

11%

4%

-2%

22%

6%4%

-12% -14%

1%3%

9%7%

12% 9%

PRICE CHANGES BY CARRIER TYPE

There is considerable price fluctuation in rate changes by carrier type. MARKET VIEWPrices at county level

Median change in lowest-price silver plans’ gross premiums by carrier type

CONSUMER VIEW2

Price leadership weighted by QHP-eligible population3

Percentage of consumers seeing given carrier type offering lowest-price silver plan in their county

Provider and Medicaid plans are gaining silver price leadership across eligible consumers.

BLUE

45%26% 24%

REGIONAL/LOCAL

17%10% 10%

PROVIDER

10% 13% 17%

NATIONAL

20% 24% 18%

CO-OP

5%15%

2%

MEDICAID

3%12%

29%

KEY: 2014 2015 2016

REGIONAL/LOCAL

3.4%

11.0%

PROVIDER

1.6%

6.4%

NATIONAL

6.7%

12.6%

CO-OP

-8.8%

18.5%

MEDICAID

-11.8%

-0.5%

BLUE

6.2%

11.9%

KEY: 2014-2015

2015-2016

McKinsey Center for U.S. Health System Reform

2016 exchange market remains in flux: Evolution of carriers and offerings I Page 3 of 4

2016 exchange market remains in flux:Pricing trends continued

There is considerable price fluctuation in rate changes by carrier type. MARKET VIEWPrices at county level

CONSUMER VIEW2

Price leadership weighted by QHP-eligible population3

Provider and Medicaid plans are gaining silver price leadership across eligible consumers.

MEDICAID

-11.8%

-0.5%

McKinsey Center for U.S. Health System Reform

QHP-eligible weighted average change in lowest-price silver plans' net premium

PRICE CHANGES BY CARRIER TYPE continued

Percentage of QHP-eligible consumers seeing new price leader in 2016

58% silver

51% platinum

49% bronze

55% gold

39% catastrophic

Many consumers will see new price leaders in 2016 and may have to switch plans if they are seeking the lowest-price option.

McKinsey Center for U.S. Health System Reform

2016 exchange market remains in flux: Evolution of carriers and offerings I Page 4 of 4

1. Plan is defined as a health insurance offering in which an individual can enroll, offered by a carrier

2. Consumer defined as all individuals eligible to purchase qualified health plans (QHP)

3. Price leader defined as carrier offering the lowest-price plan

4. Net premium takes subsidy into account based on consumers' geography, family size, age and income; we assume that these factors remain constant in 2016, since consumers have not yet supplied current income information during the open enrollment process

METHODOLOGYThe above findings are based on publicly available, approved 2016 individual market exchange rates as displayed on exchanges for all states and DC, compiled within the McKinsey Exchange Offering Database.

healthcare.mkinsey.com/reform

McKinsey Center for U.S. Health System Reform

2016 exchange market remains in flux:Pricing trends continued