The third open enrollment period (OEP) for the public exchanges concluded in January. Many carriers—both early-OEP entrants and “wait-and-see” latecomers—believed this new market would achieve stability and sustainable margins in its third year. However, recent events— including carrier turnover (both entrances and exits), plan terminations, and pricing volatility—suggest the market is still in flux.

One reason for the flux is the variability of individual market financial performance many carriers have disclosed publicly. For some carriers, significant losses are causing marked changes in enterprise-level capital, cost structures, and strategy. Early indications of 2015 performance suggest aggregate negative margins may have doubled; to date, however, only 86% of carriers have released preliminary data publicly. We anticipate that our estimates will evolve as more information is released, such as final 3R results and rebates, as well as 2015 claim run-out and adjustments. Whether carriers’ performance in the individual market will improve in 2016 remains unclear.

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