Health Issues

The open enrollment period for 2025 ACA (Affordable Care Act)-compliant health insurance is approaching. Let’s explore the significant changes that consumers should note this fall.

For the first time, DACA recipients are anticipated to be eligible to access the Marketplace and qualify for income-driven subsidies, under the same criteria as other applicants. This shift is expected to bring an additional 100,000 enrollees into coverage for 2025.

Nevertheless, attorneys general from 19 states have initiated a lawsuit in a federal district court, aiming to delay and overturn the DACA eligibility rule. Oral arguments are slated for mid-October, and there is a chance that a ruling will be issued just before the commencement of open enrollment. ^{Thus, uncertainty remains regarding DACA recipients’ ability to enroll in Marketplace coverage for 2025.}

This fall, Georgia will operate its own Marketplace platform. Beginning November 1, residents will use Georgia Access – or an approved enhanced direct enrollment entity ^{– for enrolling in or renewing their 2025 coverage. Since 2014, Georgia residents have relied on HealthCare.gov for enrollment, but this option will no longer be available for 2025 and future years.}

Alongside the ACA’s federal premium subsidies and cost-sharing reductions, various states provide additional state-funded subsidies that further reduce premiums, out-of-pocket costs, or both.

For 2025, some alterations to these subsidies include:

• California: A program that launched in 2024 eliminated deductibles and other out-of-pocket costs for applicants with household incomes up to 250% of the federal poverty level (FPL). ^{For 2025, this program is expanding. All Covered California applicants will qualify for plans with zero deductibles and reduced out-of-pocket costs.}
• New Mexico: State out-of-pocket assistance (SOPA) benefits will be expanded, allowing plans with a 90% actuarial value (akin to a Platinum plan) to be available for enrollees with household incomes up to 400% of FPL. ^{In 2024, the income threshold for these 90% actuarial value plans was capped at 300% of the federal poverty level.}
• Colorado: Previously available to enrollees with household incomes up to 250% of FPL, Colorado’s state-funded cost-sharing reductions will see the eligibility limit lowered to 200% of FPL in 2025. Consequently, fewer individuals will qualify; those with incomes between 200% and 250% FPL will be entitled to only the federal cost-sharing reduction, not the state-funded assistance.
• New York: Currently, state-funded Marketplace subsidies are unavailable, but New York has obtained federal authorization to introduce state-funded subsidies starting in 2025. ^{According to the approved waiver amendment, applicants with incomes up to 400% of FPL will qualify for new cost-sharing reductions, plus additional assistance for diabetes care and pregnancy/postpartum support.}

Some enrollees in Oregon may shift to the Basic Health Program

Oregon launched a Basic Health Program – Oregon Health Plan Bridge – in July 2024. Adults with incomes exceeding 138% but not surpassing 200% of FPL are eligible to enroll.

Check our overview of Basic Health Programs.

Marketplace enrollees within this income bracket had the option to transition to the Oregon Health Plan Bridge starting in July 2024, although participation was not mandatory.

When these enrollees update their application (including contact information, projected income, address, family size, or a plan switch during open enrollment), their eligibility for the Oregon Health Plan Bridge will be assessed at that time. Should they qualify for the bridge, they will forfeit eligibility for Marketplace subsidies.

Consequently, individuals who update their Oregon Marketplace account during open enrollment, indicating a projected income eligible for the Oregon Health Plan Bridge, will generally find this coverage to be the best choice for 2025, as they would otherwise incur full costs to maintain their private Marketplace plan.

If an enrollee allows their plan to auto-renew without any updates to the application, they might keep their Marketplace plan up to 2026 (instead of transitioning to the Oregon Health Plan Bridge); however, the state emphasizes that any changes, such as income fluctuations, necessitate updating the application.

Some rates have already been finalized in certain states, while others remain under review. Details for carriers in your state can be accessed by selecting your state on this map.

It’s crucial to note that average rate changes are determined based on full-price (unsubsidized) premiums, and most enrollees do not pay the full amount. As of early 2024, approximately 93% of Marketplace enrollees nationwide were benefiting from premium subsidies that alleviated some or all of their coverage costs.

For subsidy recipients, the net (after-subsidy) premium for 2025 will not only be influenced by changes to their own plan’s premium, but also by fluctuations in the benchmark (second-lowest-cost Silver) plan premium, as the benchmark plan’s cost is pivotal for determining premium subsidy amounts. Review notifications from your insurer and the Marketplace to comprehend how your net premium will shift upon renewing your current coverage.

At least 11 states will experience carrier additions and exits

Each year, transitions occur regarding which insurers participate in Marketplace coverage across several states. While in many areas the list of participating insurers remains unchanged for 2025 compared to 2024, some states will witness new insurers entering the Marketplace, whereas others will see insurers bowing out or ceasing operations in the individual market altogether.

For specifics on 2025 insurer participation and premium adjustments, we maintain individual pages for each state’s Marketplace; here’s a brief overview of carrier movements for 2025:

New Entries:

• UnitedHealthcare – entering Indiana
• HAP CareSource – entering Michigan
• WellSense – entering New Hampshire
• WellPoint – entering Texas, Florida, and Maryland
• Simply Healthcare Plans, Inc. – entering Florida

Exits:

• Celtic – exiting Indiana Marketplace (will continue to offer plans outside the Marketplace)
• Ascension (US Health & Life) – leaving Indiana, Kansas, Tennessee, and Texas
• Cigna – exiting Pennsylvania, ^{South Carolina, and Utah}
• Ambetter/Western Sky – leaving New Mexico
• PacificSource – exiting Washington
• Aetna Life – terminating in Virginia (but Aetna Health will keep offering plans)

If your current insurer is exiting your market at the close of 2024, you must choose a new plan for 2025. You’ll have until December 31 to select a new plan with a January 1 effective date. ^{Depending on your location, the Marketplace may likely automatically assign a replacement plan if you do not choose your own. However, being proactive in choosing your coverage is advisable.}

Changes in insurer participation in the Marketplace will not only influence available plan options but also potentially affect the benchmark plan premium – particularly if new or exiting insurers hold that designation. Variations in the benchmark plan premium will subsequently impact premium subsidy amounts for all in the area who are eligible for subsidies, as subsidy amounts are computed based on the benchmark plan’s cost.

As of September 1, 2024, consumers are now prohibited from purchasing short-term health insurance that lasts longer than four months, including renewals, and non-renewable plans are limited to a maximum duration of three months.

Between late 2018 and August 2024, federal regulations allowed the sale of short-term health policies with durations up to three years. For individuals relying on these longer-term short-term health plans, understanding available options during the 2025 open enrollment period is vital, along with the potential consequences of neglecting to select a new plan during this timeframe.

If your existing short-term policy is set to expire sometime in 2025, you will not be able to obtain another longer-duration short-term policy thereafter. All available options will be capped at a maximum of four months, which could leave you uninsured at some point in 2025. Furthermore, the termination of a short-term policy does not constitute a qualifying life event to trigger a special enrollment period for an individual/family health plan enrollment.

Therefore, if you are currently on a short-term policy that is ending in 2025, consider your Marketplace options during the forthcoming open enrollment period. Enrolling in a Marketplace plan will ensure coverage throughout 2025 and possibly qualify you for federal or state financial assistance with premiums.

Recently, CMS (the Centers for Medicare & Medicaid Services) has taken measures to prevent unauthorized enrollments and plan changes that occurred in states utilizing the federally run Marketplace (HealthCare.gov).

Since July, CMS has put new regulations into effect that prohibit brokers from adding themselves to a person’s HealthCare.gov account without the policyholder’s consent. ^{Previously, some brokers exploited this loophole, receiving commissions for those accounts and modifying plans without the enrollee’s awareness.}

If you wish to assign a different broker to your account, you must either participate in a three-way call with the Marketplace call center and your new broker or log into your HealthCare.gov account to input the new broker’s information. ^{(Here’s how to do that.) This process is necessary for anyone transitioning brokers or who decides to seek assistance after navigating the enrollment process independently.}

Call volume at the Marketplace significantly rises once open enrollment begins. If you know you’ll want to add a broker to your existing HealthCare.gov account or switch to a new broker, consider addressing this ahead of the open enrollment period.

If you reside in a state that operates its own Marketplace (meaning you don’t utilize HealthCare.gov), that Marketplace will have its own guidelines for adding a new broker to your account. The process differs between state-run Marketplaces, but your broker or the Marketplace can clarify the steps needed to accomplish this transfer.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has authored numerous opinions and educational articles about the Affordable Care Act for healthinsurance.org.

This year, family premiums for employer-sponsored health insurance increased by 7%, reaching an average of $25,572 per year, according to KFF’s 2024 benchmark Employer Health Survey. On average, employees contribute $6,296 annually towards family coverage costs.

This marks the second consecutive year of a 7% increase in premiums. Over the past five years, during a period characterized by significant inflation (23%) and wage growth (28%), cumulative premium growth has also been substantial (24%).

While the total premiums for family coverage continue to rise, the average amount workers pay towards their annual premiums has remained relatively stable over the past five years, increasing by less than $300 since 2019, which translates to a total rise of just 5%. This stability may reflect the pressures of a tight labor market.

For workers with an annual deductible for single coverage, the average this year is $1,787, which is comparable to last year’s $1,735 and shows a modest increase of 8% since 2019, when the average stood at $1,655.

Workers at small firms (with fewer than 200 employees) typically face higher deductibles than those at larger firms ($2,575 compared to $1,538). Among all covered employees, around one-third (32%) of those at smaller firms have an average single deductible of at least $3,000.

“Employers are spending an amount equivalent to purchasing an economy car for each worker every year for family coverage,” said KFF President and CEO Drew Altman. “In recent years, the tight labor market has made it difficult for them to pass on costs to workers who are already facing high healthcare expenses.”

Approximately 154 million non-elderly Americans depend on employer-sponsored health coverage, and the 26th annual survey, which included over 2,100 large and small employers, offers a comprehensive view of the trends influencing it. Alongside the full report and summary of findings released today, an article featuring selective findings will be published in Health Affairs, appearing in its November issue.

The survey reveals that many of the nation’s largest employers (with at least 5,000 employees) are implementing measures to protect lower-wage employees from the effects of escalating healthcare costs. Among these large firms, 29% report having a program to lower premiums for lower-wage employees, while 19% provide a reduced-benefit plan with more affordable coverage.

Employer Coverage of GLP-1 Drugs for Weight Loss is Limited and Restricted

In light of the rising interest in expensive GLP-1 medications such as Wegovy for weight loss, this year’s survey examines the prevalence of such coverage in employer plans.

Fewer than one in five large employers with at least 200 employees offering health benefits (18%) report that they cover GLP-1 drugs for weight loss, while half (52%) state they do not provide coverage, and the remaining 31% are uncertain. Among the largest companies with at least 5,000 employees, more than a quarter (28%) cover GLP-1 drugs, and nearly two-thirds (64%) do not.

Among large companies that offer these medications, about half (53%) impose conditions or requirements for coverage. These requirements might include prerequisites like a consultation with a dietician, psychologist, or other professional (24%); requiring participation in a lifestyle or weight-loss program either before (8%) or during (10%) treatment; or other types of conditions (26%).

Providing coverage for these weight-loss medications carries significant cost implications for employers, as a previous KFF analysis estimated that nearly 50 million adults with employer health plans meet the clinical criteria for these treatments, which can incur thousands of dollars annually per individual.

Among large employers covering GLP-1 drugs for weight loss, one-third (33%) indicated that this coverage will have a “significant impact” on their plan’s prescription drug expenditures. Additionally, nearly half (44%) of all large firms believe that covering GLP-1 drugs will be “very important” or “important” for employee satisfaction with their health plan.

Among large companies that do not currently cover GLP-1 drugs for weight loss, only 3% say they are “very likely” to start doing so in the next year, while 23% indicate they are somewhat likely to do so.

“Employers are challenged by the need to integrate these potentially valuable treatments into their already expensive benefit plans,” stated KFF Vice President and study author Gary Claxton.

Other notable findings include:

• IVF and other family-building benefits. About 27% of large employers with at least 200 workers report covering in-vitro fertilization (IVF), with a similar percentage (26%) covering artificial insemination. A larger percentage (37%) cover fertility medications, while fewer (12%) cover egg or sperm freezing. Approximately one-third of employers are uncertain about whether their plans cover these services.
• Rebates from pharmacy benefit managers (PBMs). PBMs manage prescription drug benefits for payers, including employers, and often negotiate rebates with drug manufacturers for favorable formulary positioning. Among the largest firms with at least 5,000 employees, 34% claim they receive “most” of the rebates negotiated by their PBM or health plan, while another 34% receive “some,” and 8% report receiving “very little.” The remainder are unsure about their rebate amounts.
• Abortion. Among large employers with at least 200 workers, 8% report that their plan does not cover legally provided abortions under any circumstances. Additionally, 18% say they only cover such abortions under limited conditions such as rape, incest, or threats to the life or health of the pregnant individual. Most (45%) of other large employers are unsure about the extent of their abortion coverage. These figures have remained stable since 2023.
• Mental health and substance abuse. Approximately 25% of employers offering benefits say their plan’s network for mental health and substance abuse services is “somewhat” or “very” limited, compared to 10% who report the same for their general networks. About half (48%) of large firms with at least 200 employees have enhanced the mental health counseling resources available to their employees through employee assistance programs or third-party vendors like Headspace or Lyra Health.
• Spousal coverage and incentives for not enrolling. Among large firms with at least 200 employees that provide health benefits to spouses, 24% either charge higher premiums or place restrictions on coverage when spouses have health insurance from another source. Additionally, 12% of large firms offering benefits incentivize employees to enroll in a spouse’s plan, and 13% provide additional compensation or benefits to those who opt out of the company’s health plans.

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KFF serves as the independent source for health policy research, polling, and news. We are a nonprofit organization headquartered in San Francisco, California.

An updated collection of charts examines the anticipated growth in health spending over the next few years, focusing on trends in prescription drug costs, out-of-pocket expenses, and other related factors.

In 2024, the growth in per capita health spending is projected to slow down to 4.5%. Expectations indicate a further decline in growth rates for 2025 and 2026, anticipated at 4.2% and 4.3%, respectively. From 2027 to 2032, average annual growth in per capita spending is expected to stabilize at around 5.0%. Throughout this timeframe, national health expenditures are likely to exceed GDP growth, primarily due to rising medical prices.

The insights presented in this chart collection utilize the 2022 National Health Expenditure (NHE) projections provided by federal actuaries. For more analyses and information, visit the Peterson-KFF Health System Tracker, a resource hub focused on monitoring and evaluating the U.S. health system’s performance.

National health expenditure reached $4.5 trillion in 2022, accounting for 17% of the gross domestic product (GDP), and is expected to outpace GDP growth through 2032. This growing expenditure is likely to increase costs for families, employers, states, and the federal government. As policymakers explore various strategies to enhance health care affordability, they are paying close attention to the effects of market consolidation in health care and its potential impact on costs and quality of care. Hospital consolidation is a primary focus because nearly one third of all health care spending is directed towards hospital services. While consolidation could enable providers to function more efficiently and assist struggling providers in underserved areas, it frequently results in diminished competition. A wealth of evidence indicates that consolidation can lead to increased prices, with ambiguous effects on quality.

This analysis investigates the competitiveness of hospital care markets by using RAND Hospital Data, a refined version of cost reports from Medicare-certified hospitals, along with American Hospital Association (AHA) survey data. For conciseness, the terms “independent hospitals” and “health systems” will both be referred to as “health systems.” Competition is quantified in three different ways: the proportion of metropolitan statistical areas (MSAs) dominated by a limited number of health systems, the level of market concentration in MSAs using the Herfindahl-Hirschman Index (HHI), and the evolving share of hospitals associated with health systems. This analysis concentrates on general short-term or general medical and surgical hospitals based on 2022 data, excluding federal hospitals (see Methods for more information).

Key Takeaways

• In 2022, one or two health systems monopolized the entire market for inpatient hospital care in nearly half (47%) of metropolitan areas.
• In over 82% of metropolitan areas, one or two health systems commanded more than 75 percent of the market.
• Almost all (97%) metropolitan areas exhibited highly concentrated inpatient hospital care markets when applying HHI thresholds from antitrust guidelines.

One or Two Health Systems Dominated the Entire Market for Inpatient Hospital Care in Nearly Half (47%) of Metropolitan Areas in 2022

A single health system controlled nearly one in five (19%) metropolitan statistical areas (MSAs), while over one in four (27%) markets were governed by two systems in 2022 (see Figure 1). In more than four out of five metropolitan areas (82%), one or two health systems ruled over more than 75 percent of the market. All these markets classified as highly concentrated according to current antitrust guideline definitions (outlined below). One health system held at least half the market share in three out of four MSAs (75%) and at least a quarter of the market in almost every MSA (98%).

The number of health systems within an MSA generally increases in line with the region’s population. For instance, in 79% of MSAs with populations under 200,000, one or two health systems controlled the market for inpatient hospital care in 2022, as seen in locations such as Muncie, IN; Napa, CA; and Amherst Town-Northampton, MA (Figure 2). MSAs with one or two health systems represent nearly half (47%) of all MSAs but only 12% of the U.S. metropolitan population.

On the other hand, almost all (53 out of 54) MSAs with populations of one million or more had at least four health systems, as is the case for Detroit, Miami, and Phoenix. These MSAs with four or more health systems make up 35% of all MSAs and 79% of the U.S. population residing in metropolitan areas.

However, in nine of these relatively large MSAs with four or more systems, the two largest health systems had control over at least 75% of the market. Moreover, in 37 of these markets, they accounted for at least 50%. For instance, in the MSA encompassing Austin, TX, with a population of 2.4 million, two systems (HCA Healthcare and Ascension Health) dominated 85% of the inpatient hospital care market, even though Austin hosts more than four health systems. The metropolitan area covering Portland, OR, with a population of 2.5 million and also more than four health systems, showcases a slightly less concentrated market compared to Austin’s; however, the two largest systems (Legacy Health and Providence) still collectively hold 56% of the market. (Refer to Methods for a discussion regarding MSAs as hospital market geographies).

Nearly all (97%) metropolitan areas had highly concentrated markets for inpatient hospital care in 2022 based on current antitrust guidelines

Another approach to evaluating market competitiveness involves analyzing concentration through the Herfindahl-Hirschman Index (HHI), which gauges the number of competitors in a market and their market shares. The scale ranges from 0 (indicating perfect competition) to 10,000 (indicating a monopoly). According to current merger guidelines from the Federal Trade Commission (FTC) and Department of Justice (DOJ), markets are categorized as: not concentrated (HHI < 1,000), moderately concentrated (1,000 – 1,800), and highly concentrated (HHI > 1,800). This analysis calculates HHIs for MSAs and classifies these regions accordingly, although alternative market boundary definitions can yield different competition levels (see Methods).

In 2022, nearly all (97%) MSAs showed high market concentration for inpatient hospital care, based on HHI thresholds from current merger guidelines (Figure 3). These guidelines reflect 2023 updates that lowered the HHI thresholds for moderately and highly concentrated markets. Under previous guidelines, a large proportion—though marginally smaller (93%)—of MSAs were classified as highly concentrated markets, corroborating an estimation from a previous study (90%) using 2016 data.

Similar to the findings regarding the number of health systems in MSAs, more populated metropolitan areas generally tended to be less concentrated and more competitive than those with smaller populations, though this wasn’t universally true. All 13 MSAs identified as either not concentrated or moderately concentrated had populations exceeding one million, including places like Cincinnati, Oklahoma City, and Miami. Nevertheless, 41 MSAs with populations greater than one million—including Houston, Denver, and Atlanta—exhibited highly concentrated hospital markets. Overall, 70% of individuals residing in metropolitan areas lived in highly concentrated hospital markets.

The proportion of hospitals affiliated with health systems rose from 56% in 2010 to 67% in 2022, with growth observed in both rural and nonrural areas

As of 2022, approximately two-thirds of hospitals (67%) are affiliated with larger systems, a rise from 56% in 2010 (Figure 4). A lower percentage of rural hospitals than nonrural ones were part of a health system in 2022 (52% vs. 83%), though both rural and nonrural areas have seen an upward trend: from 43% in 2010 to 52% in 2022 among rural hospitals, and from 69% in 2010 to 83% in 2022 among nonrural hospitals.

As of 2022, the majority of system-affiliated hospitals (53%) belonged to systems with at least 15 hospitals, while 22% were part of systems with 50 or more hospitals. Systems with at least 100 hospitals accounted for 13% of system-affiliated hospitals.

Hospital consolidations into larger systems do not always result in diminished local market competition, especially if an independent hospital is absorbed by a larger system that lacks existing facilities in that locality. Nonetheless, mergers across hospitals that serve distinct geographic markets for patient care—termed “cross-market” mergers—may still lead to escalated prices in certain instances.

In 2022, nearly half (47%) of metropolitan areas across the nation had only one or two hospitals or health systems offering general inpatient hospital care, according to a recent KFF analysis.

The analysis explores the level of competition among hospitals amidst a surge of hospital consolidations that has garnered the attention of both state and federal regulators. Approximately one in five (19%) metropolitan statistical areas are served by just one hospital or health system, while more than a quarter (27%) are under the control of two hospitals or systems.

In a vast majority of metropolitan areas (82%), one or two hospitals or health systems accounted for at least three-quarters of all inpatient hospital discharges, thus fulfilling the criteria for highly concentrated markets as outlined by current federal antitrust standards.

The quantity of hospitals or health systems in a metropolitan area commonly increases with the population size of the region. A significant majority of smaller metropolitan areas (fewer than 200,000 residents) have only one or two hospitals or health systems providing inpatient care, while almost all of the largest areas (with at least one million residents) host a minimum of four hospitals or health systems.

Additional findings include:

• Almost all (97%) metropolitan areas exhibited highly concentrated markets for inpatient hospital care in 2022, as measured by the Herfindahl-Hirschman Index, which assesses the market shares of participants in a specific market. This metric is utilized by the Federal Trade Commission and Department of Justice in their current guidelines for evaluating hospital or health system mergers.
• Two-thirds (67%) of hospitals across the country were affiliated with health systems in 2022, an increase from 56% in 2010. This rise in affiliated hospitals impacted both rural and urban areas, despite the fact that nearly half (48%) of hospitals in rural regions remain independent of larger health systems.