The ACA individual market is on the verge of its biggest shakeup since inception. With the elimination of enhanced subsidies, a shorter Open Enrollment window, and sweeping reforms under the “One Big Beautiful Bill,” health plans are facing a market that will look and operate very differently heading into 2026.

In this episode of Regulatory Joe, Joe Boyle sits down with Wesley Sanders, founder of Evensun Health, to talk about what these changes mean for carriers, members and the sustainability of the individual market.

ACA Membership Shifts and Targeting Sustainable Growth

Wesley predicts the ACA market will shrink as price-sensitive members drop coverage. While this presents challenges, it also opens the door for plans to refocus on the members who will bring long-term value—those who:

• See ongoing benefits in their coverage
• Have healthcare needs that align with the plan’s strengths
• Are more likely to renew year after year

Driving ACA Member Retention Through Proactive Engagement

In 2025, nearly 60% of members were passively renewed. But with higher premiums and a shorter enrollment period ahead, that number could drop significantly.

Wesley stresses that carriers need to:

• Proactively reach out to members well before open enrollment
• Remove friction from payment processes
• Clearly communicate why staying on the plan is the best choice

Operational Readiness: Networks, Rates and Compliance Alignment

The best strategy won’t work without the operational infrastructure to support it. Plans should be prepared to address:

• Network accuracy and adequacy, especially as members shop based on provider access
• Competitive but sustainable rate filings that avoid the “winner’s curse” of underpricing
• Alignment between compliance, finance and marketing to ensure consistent messaging to members.

Regulatory Joe Recommendations from Wesley Sanders

• Know your target member and attract intentionally. Define which segments align best with your network, cost structure and long-term strategy, and tailor your offerings accordingly.
• Double down on retention. Build pre-OE outreach plans, simplify payment options and reinforce your value proposition before members shop elsewhere.
• Work with your regulators. Establish open lines of communication now to address rate adequacy, network requirements and market stability concerns before they become roadblocks.
• Get your operational house in order. Maintain accurate provider data, prepare for rapid plan document updates and ensure your teams—from compliance to marketing—are working in sync.
• Be willing to make hard calls. If a market isn’t financially sustainable, exiting early may be better than a costly withdrawal later.

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Episode Transcript

Joe: Hey everybody. Welcome to Regulatory Joe. I’m Joe Boyle, president of ClearFile, and I’m pleased to introduce our newest guest, Wesley Sanders, of Evensun Health.

Wesley, we know you wear many hats at Evensun, including being a CFO, a consultant and a risk adjustment expert. Tell us a little bit about yourself, your background, and about Evensun.

Wesley: Yeah. Hey. Hey Joe. Thanks for having me. Yeah. So, I founded Evensun about three years ago after spending some time as the CFO of a regional health plan. And founded this start starting out as a consulting firm.

But then, found that there was a big gap in firms that were servicing, serving health plans and other stakeholders in the ACA market in particular. And so we started developing products and services focused on ACA plans ’cause what we found was there were a lot of vendors out there who serve the ACA market, and also ran compared to their Medicare advantage or commercial strategy.

And so we decided to really focus on the specific and, you know, idiosyncratic needs of the ACA market. We again mostly work with health plans, primarily provider-sponsored plans.

We’ve also worked with some of the publicly traded plans and blues and such, trying to help them think about their strategy in the ACA market. And then we offer some various, you know, products and services around that area.

And yeah, it’s been a busy couple of months. I mean, I, my phone has been ringing really nonstop, over the last couple of months, and especially this last month in light of, a lot of the publicly traded firms are drawing their earnings guidance, some of the, you know, so the changes in finalization in the Big Beautiful Bill, the regulatory changes that continue to come down the pike.

Joe: Well said. And so this will be a very relevant episode too, and thank you for sharing some background, more about yourself and what you’re doing to blaze the path, for these issuers.

So for the purpose of today’s topic, I mean, blending together enrollment, re-enrollment strategies for the ACA for plan year 2026, with the layered One Big Beautiful Bill that was just dropped, you know, very recently, now more than ever, we need more strategic advice in leaning into the individual market to understand, what does this mean for not just issuers, but for members and that experience. So, in, you know, following the work that you’ve been doing in the industry. It’s very clear that there are a couple big drivers, especially what our team’s looking at first, starting with the elimination of APTCs, and financial subsidies and financial assistance for members impacting huge pockets of ACA membership across the nation. so life will be very different. And even trying to think about, what does this mean for the sustainability of health plans? can we even sustain membership in the individual market? Will we see carriers go more towards the off exchange market or different alternative products such as ICHRA? would

love to just hear your thoughts on how you’re preparing your clients, your issuers, and maybe give some sound advice on what folks should be looking out for.

And then, what you think will happen.

Wesley: Yeah, so I think back to my time, as a, you know, as a, as a CFO and Finance executive at a health plan in 2017, 2018, when honestly, a lot of the same kind of existential questions were being faced by carriers in the individual market. And you know, there you have like, oh, well is this gonna be repealed or what’s gonna change?

You know, we had Trump, you know, changing, in October of 2017. I remember when CSR funding got pulled and everybody had to react to that. And at the same time, you had lots of carriers exiting the market. It was a very unstable time, but for the carriers who stuck around 2018, actually was one of the most profitable years on a per member basis for the individual market.

And so I certainly do think it is going to be a smaller market next year that is, that is un unquestionable. I think, and I think carriers, honestly, the last couple of years, they’ve been able to use what I’ve just called the field of dream strategy where, you know, if you, if you put a, if you put a plan out there’s so much money, there’s so much federal subsidy flowing into there that like, you will get enrollment and in and in general, you know, and plans were, you know, fairly successful financially from that.

But I think the challenge was, and I think this is a challenge for members in particular, and some of my critiques during the Biden administration that I, that I shared were around the way that they set up the regulatory framework was, you know, enrollment was the goal.

And so removing any kind of barriers to enrollment and I think particularly the 150% FPL perpetual sep, which in non-Medicaid expansion markets, that’s half your population can enroll at any time and disenroll at any time. I think that meant that the carriers who were most successful were ones who had narrow networks and who were really trying to attract the price sensitive members who didn’t have significant health conditions. And so, because if you were a carrier who was offering a PPO or offering a broad network, well, you were hugely exposed by the fact that like, smart providers, frankly, and I saw this firsthand, would, you know, we would see people who were just about to get a transplant and would suddenly switch from, you know, from a plan that was paying the provider less to it plan that was playing, paying the provider a lot more.

And then suddenly, you know, and then, you know, midway through the year that happens, then they just enroll and switched to the cheaper plan once the provider gotten their cash. I think this actually opens some opportunities for plans to be thinking about, well, if the price sensitive members are going to go away or at least be reduced, who are the people who are definitely gonna stick around?

Whether they’re still, you know, the lower income members for whom as long as CSR remains defunded, there’s still a very high value proposition because of the nature of price linked subsidies that are still a, gonna be a decent amount of price sensitive consumers. But then there’s also gonna be the consumers who really need access to healthcare for whom, you know, these programs are really important.

And I think health plans can figure out, well what are those members that we are, that we can serve well and also be financially sustainable on. And that’s where our risk adjustment strategy really comes into play. And that’s where I spend a lot of times talking with my, issuer clients on is, well, you’ve gotta look at member level profitability.

And so I think the strategy becomes a little more complicated ’cause it’s not just. Stick a plan out there. And because, you know, there’s the, there’s so many people out there, you’ll get enough enrollment. It’s like, okay, well now you have to think about, well, who am I actually trying to attract? ’cause that’s gonna look very different.

And then I think the other thing is around the renewal strategy. ’cause the passive re you know, last for 25, almost 60% of members either passively renewed or renewed at least to the same plan, that they were on, prior years. And that was a huge increase from earlier years. And I think that’s part of what may be driving some of the unusual enrollment, experience that some of the public carriers have flagged.

And so going into 26, that kind of gets supercharged because even people who, somebody who passively renew as well, if you don’t do something to make sure that they want to stay on your plan and they have to take some action, pay a premium, or do something, you’re gonna lose them. And so I think it really becomes important for plans to be thinking about, well, how are we.

How are we communicating with our members? If it’s a member we haven’t heard from in three years, well, we should probably, we might be nervous that member may not even be real. You know, that, or that they might, may not be aware that they’re enrolled, in which case you’ve got, you know, a pretty big risk that if once they do figure it out, potentially they could, you know, have their coverage.

They could go to CMS and say, Hey, you know what? This was not me and the carrier. Somebody has to give back two or three years worth of premiums. But even for the people who are lightly engaged, it’s like, okay, well, like. Why would they wanna stick? Like is there a value prop? And I think for a lot of plans, I mean five, this $5 premium rule is gonna be a thing like, okay, $5, it’s usually, you know, that is the, I don’t want to downplay the financial barrier that is in place for some people, but a lot of times it’s, you know, it’s an administrative barrier.

What are the, what are the places in your markets that people pay their bills? And I think this is one of the areas that plans really do have to pay attention to their, to their local markets and figure out what are the, what are the stores that we need to get into to make payments easier?

I mean, I think that’s gonna be, so there’s both the strategic side of who do we want to attract, but then of the people that we have, how do we make sure that they know what they need to do and make it as easy as possible for them to take care of that.

Joe: Wow. I mean, you hit on so many valuable notes, Wesley, and so I mean the big message here alongside healthcare literacy is, I mean, you’ve just walked us through. A nine to 10 year timeline. You took us from 2017 all the way through 2026 through the highest profitability years of issuers. Now down to, you know, who knows what’s gonna happen this year.

The common theme though, I mean from a risk adjustment perspective is profitability of members.

Now, I think what you mentioned is so valuable because there’s a lot of pessimistic, I guess you could say, perception about the One Big Beautiful Bill and what it means for healthcare and the members. But what you just did is you highlighted the optimism and what there could be, opportunity for both payers and for the member.

But to your point, there’s a lot of work to do, right? It’s, it’s August, so how many more months until enrollment when you talk about August, September, October, November. Four months to go. even with a shortened enrollment period this year, first year in the history of the ACA have less time to enroll.

Like you said, passive or active enrollment. And even my team, when we’re actually doing our plan ID crosswalks by HIOS Id like you mentioned, we can do a one-to-one renewal or some issuers will map to like plans that are not the same actual health coverage that they received last year.

So if they go to their PCP, their copay may be different, they may not be aware of that.

Right. So, even down to CMS and certain, state, based exchanges allowing rate changes all the way up until September, we’re seeing, before those rates get codified and approved and even divisions of insurance are lining insurers up outside of the courtroom for rate hearings to make making sure, hey, your rates are actually too low.

Wesley: I think honestly really important because, and I don’t envy regulators who, you know, whether they’re appointed or elected. It’s a, you know, fundamentally it’s a political role and nobody runs on the platform of, I’m gonna make sure insurers raise their rates enough to, you know, to cover their costs.

But that’s, that’s just as important, you know, the actuarial term is, you know, the rates are neither excessive nor deficient. We saw what happened with Friday and Bright when their rates were deficient, and, you know, I’m frankly like anybody who saw. their rate filings initially could have spotted that they were deficient and they were trying to buy business.

I mean, I gave, but it’s a thing where regulators don’t have a strong incentive to say something about that, but I think they’re now more aware of the risk of, I’ve talked about with carriers of the big risk in, of the winner’s curse with, which is an auction theory concept. That, and I always do a little demonstration when I’m, either when I’m on a webinar, I also, teach philosophy part-time and we’ll sometimes talk about game theory. but what I, what I do is I, you know, I get a mason jar full of coins that I’ve counted up and I say every, okay, everybody bid on this. The highest bidder wins the jar of coins and the coin, it’s usually worth around between 20 and $30. And inevitably there’s somebody who bids way above that. So it’s like, okay, you’ve bid a hundred dollars, so pay me a hundred dollars and I’ll give you this jar that has $22 worth of coins.

And I think the winner’s curse risk is a big one for carriers where they’re way. If they do not, if they, if their morbidity assumption going into 26 is way below everyone else is in the market, well they’re gonna get all the membership, but it is not gonna be priced appropriately. And they will either.

And this is where Carrier, this is where regulators, I think now recognizing that is a market wide risk because of the risk adjustment problem that we saw with Bright and Bright Aid defaulting on the risk adjustment payments. And, you know, I’m still, sore that Bright, got away with it, that they managed to, they basically managed to bankrupt their subsidiaries and their parent company, you know, was able to, you know, was able to go private without having to pay off its obligations to the other issuers.

And I think regulators are aware that’s a big problem. And so I think carriers certainly need to be thinking about, to the extent that, you know, some states release more data than others, they need to think about what their relative positioning is, because that’s really gonna drive what their you know, what their strategy is for renewal and retention.

Joe: When you mentioned SERFF too, like, I mean, issuers may not even have the resources or the organization staff on hand to actually complete this research and put a strategy in place because, for example, if carriers are redacting their rates, not all the available like projected membership or information may be available or easily accessible. So, you know, if it’s not in SERFF, carriers can go to the HIOS the public use files, the PUF files. If it’s not there, we’re gonna have to wait for weeks for FOIA requests for the Freedom of Information Act.

Some states, more particularly with state-based exchanges, require standard plans or additional standard plan options, which include HDPS or HSA compatible plans. And even our team is in the midst of significant rework right now with issuers who are updating not just their plan designs, but it cascades down to not dozens, hundreds of plan documents when you have to update evidences of coverage, EOCs, summary of benefits, SBCs, sobs, all the policy riders, dental, vision, and so on.

Just to simply remove the designation or add the designation. HSA. So now.

Health plan literacy.

So are you seeing plans making the extra effort to communicate this and to say, Hey, you know, how is this going to work? Like actually post

enrollment? Like do you have any thoughts on that?

Wesley: You know, and I think that’s a really good point. ’cause a lot of what I’m seeing is, I mean, plans are responding to stuff so quickly that I think in a lot of ways they are focused, they’re focused on compliance, they’re focused on meeting whatever the latest rule is. And there’s, you know, less, there’s been less of a focus this cycle on the member impact of some of these changes.

Just frankly, ’cause things are moving too fast and it’s like, okay, well we need to make sure that this passes, whatever this regulation is. That’s the focus. The focus. I mean, it’s not even, sometimes it’s not the conversation just getting passed, it’s compliance and finance that are having these conversations to figure these things out.

The cascading down to marketing and those sorts of things are maybe aren’t happening yet. And so I think plans, you know, need to be thinking about, okay, if we make these changes, how do we do it?

Where when you have all these pieces, you know, the version control on the documents, like, okay, well you have one thing you submitted to a regulator.

How do you make sure that the 30 different places, you know, your member app and your website and wherever it goes, that also gets updated.

Joe: Oh, of course. Well, so I mean, so savings, I mean, so efficiencies don’t just come from financial savings, but operational efficiencies, time savings, reduced rework, version control.

so our team, I mean, outside issuers manage this right now off the side of their desk, sticky notes, excel spreadsheets,

Microsoft Word Doc, and just their knowledge of what

they’ve been doing this whole time.

You know, this is how we’ve done it. Always.

So I think, you know, our team has done a great job, obviously introducing health technology into the

space to help from a pre-submission filing process as well as an ongoing, I guess you could say, review and objection deficiency process. but we’re actually, I mean, outside of our Consolidated Appropriations Act, CAA, form filings, we’re still patiently awaiting our regulators to actually approve our binders, forms, and

most importantly rates.

So, it’s gonna be a big push, I think in the next, 30 to 60 days. issuers will be locked in for the next 12 months, so that’s 12 months of. you know, measurement 12 months of market research and to your, I think the message that you made very clear to all of our listeners today is, population health.

Understand who your members are, specifically within that 150% of FPL, because that’s going to be your sweet spot to be opportunistic, not

pessimistic. So hone in and understand your member’s conditions, morbidities, and I believe you said, co comorbidities. So the better you know your member, the better you’re gonna be able to serve them and actually survive through the

next 12 months.

Wesley: yeah. ’cause, because one, like one of the reasons why I, why I love doing risk adjustment work in particular is that. You know, risk adjustment done well, has it, is just like all the incentives are aligned for every party. You know, like you want your member, like if you manage a condition well, you are profitable and that member, which means you want to keep them.

So you want to, you know, serve, you want to serve their needs well, you want to control costs that are, that are associated with it. But again, you know, the longer they stay on your plan, the, as a general rule, you know, renewing members are more profitable than new members and the longer members on is on a plan or is with an issuer, I should say, you know, the more profitable they tend to be.

And so if a carrier’s executing their strategy well, you know, it’s not just gonna be code fishing expeditions, you know, that’s sort of the lowest common denominator of risk adjustment stuff. And that, you know, that really doesn’t. You know, I don’t think it’s, it could give you a short term bump on risk adjustment revenue, but it doesn’t really help you on in the long run.

Think in the long run, carriers are thinking about, well, how do we serve these members? Well, and then also who again, who are we targeting? Because the way, like I often get brought in on risk adjustment engagements way too late where somebody is February and somebody is February of, you know, 27 and they’re like, they’re looking at their 2026, you know, data and they say, oh my gosh, we’re gonna have to pay in all this money.

And what I would say is, you know, most of risk adjustment is actually already locked in before open enrollment even starts. Because the way, like most of risk adjusters is gonna be driven by who do you attract to your plan and anything else that you know. And so that’s gonna be driven by your pricing and your offerings and anything else that happens after that.

You know, there’s marginal things you could do to make sure you’re accurately, you know, capturing your conditions, and then getting stuff recoded, making sure the members are getting the care that they, that they need so that their, you know, their costs are stable. But again, none of that matters if you didn’t attract the right member.

Joe: I have to ask in your, in your opinion, you know, there’s three primary drivers for enrollment. So members can shop based on price. They can shop based on brand recognition, or they could shop based on quality of product. So now from a member behavior or shopping behavior perspective, in addition to Aetna’s exit and withdrawal as a strong leading brand in the individual marketplace, how do you think the member behavior will be impacted this year?

In terms of, I guess just selecting the right plan for the right reasons in that additional million members that’s just kind of hanging out there in limbo for the next 60 days.

Wesley: Yeah. Well, and of course you’ve got the CMS as far as far as I know, anyway, is still planning to do the alternate enrollment process that they’ve done in prior years with an exiting issuer where the members will be crosswalked, through, there’s no, you know, template, but, you know, there’ll be crosswalk based on some hierarchy and criteria that CMS has.

What’s interesting is they privilege network type over metal level, which I always found kind of interesting. So if you are, so for example, if you’re on a bronze HMO with Aetna and in the market there’s a bronze EPO, but then the other HMO is only selling a silver plan, you’ll actually get crosswalk to that silver HMO rather than the bronze EPO.

Joe: Is that the UBM criteria, uniform benefit modification. It’s like the plus or minus AV percentages and they must have some type of like AV calculator methodology. Right. That’s actually telling them which is the right plan.

Wesley: No, if you’re switching from one carrier to another, it’s just purely, it’s network then metal level, then price, and so it’s the lowest cost metal level. No lowest cost at the like metal level you’re assigned to, but they privilege network first. So if there’s not a, if they’re not a bronze plan to go to and you’re gonna go to the silver on that same metal level, it’ll be the lowest cost one at that metal level.

Joe: And that receiving carrier is to manage that network that the primary network or a rental network, whatever it may be.

Wesley: Yeah. Well, it’d be whatever network they’ve got, they’ll get it. They’ll get those at the member. Now again, like they don’t, they get the 834s in October, the same as all the other passive renewals. But of course the member has throughout, over enrollment to shop. It’s just the backup. Is that okay if they didn’t make any selection, they will passively renew onto this new issuer. Now, of course, the five rule is gonna apply. So the issuer still has work to do, but I think that’s one of the things carriers need to be looking at. And CMS does send the carriers. Once the rates are finalized, they send them first just a spreadsheet says, Hey, here’s how many exiting members there are by, I think it’s by rating area that you’re gonna receive from an exiting issuer.

And then they get those files and carriers need to think about how to, how to react to that at the very least. Like, and how are they working? You know, they have this gift of all these members who are being auto-enrolled to them. How do they make sure that they, you know, should they choose to do nothing, or choose to remain on the plan, how do they make sure that they actually get enrolled? and especially if it, if it’s a carrier who’s not a, you know, who’s not a known brand, they may need to have a really. Specific communication strategy with these members because I’ve, I’ve worked with some of the smaller regional plans that maybe people don’t know, especially in the individual market.

And when some of these exits happened in the prior years. Well now members are getting invoices and letters from a company they’ve never heard of, and well, they kind of assume it’s a scam. And so it’s like, well make sure if you’ve got some of these members, the first communication from you probably shouldn’t be an invoice.

You should make sure that there’s something explaining what’s going on. But then the other thing being, you know, I tend to think that, you know, yeah, price is usually the first driver. And I think that honestly, the biggest proxy for quality is usually around network. I think that’s, that’s the thing that is most easily salient to people that they, that they understand.

You know, I think the brand recognition is important to some degree. But, you know, I always tell since I’ve worked with a lot of plans who are very, who are, who are very, you know, proud of their customer service. And I say that’s a big differentiator, but what I often find is like, well, and what people mean by customer service is they mean you paid my last claim.

And you can be as nice and great as possible as soon as you’ve denied a claim or caused a problem, people aren’t loyal to you anymore. And, you know, and I’m oversimplifying it a little bit, but I, you know, but I do think that people are more and more aware of the importance of provider networks.

And I think network is often, if people are not shopping purely on price, that the network is super important. And again, this comes back to just some of the operational blocking and tackling that, you know, if they’re, if you’re on healthcare. gov, you know, there’s a file that you submit that CMS crawls once a day to pull your network information, you better make sure it’s right and you better make sure it reflects things like all the locations.

I mean, I’ve seen carriers who have. Who I know have a good network, but they’re only submitting the primary address for a particular provider or whatever. So if a member searches for the doctor that they know works in their area, but for some reason, you know, the address is associated as you know, at some hospital that they’re, you know, they have privilege, is that member thinks that provider isn’t in network.

Joe: I mean, so even if a provider has 10 NPIs or 10 offices or locations, but we’re listing one, our filing team even had, you know, in influx of issues, rework and errors based on CMS moving, a lot more functionality and validation,

guardrails into MPMS, the HIOS system.

So as we’re adding in individual ECPs facilities specialists, I mean, there’s big gaps in rural counties where we

need to meet adequacy still. So we’re actually still working with regulators right now as we speak to make those contracts. Or if we can’t make them good faith efforts, especially for

American Indian Alaskan natives, right?

So for those tough hospital systems to actually push across the finish line with those

premium rates, you need those to have a

compliant network. What this goes into is we file rates for a full 12 months, the next

calendar year. But what still occurs is semi-annual and quarterly reporting. We have to report to our state, we have to report to the government. So the influx of membership by network, tell me your thoughts on this because we file reports that are called PCP turnover reports. We do PCP wait time reports. So now how long are members gonna be waiting at the doctor’s office to even get care that they need?

Are they going to be turned away? providers, yeah. Great opportunity. They can make a lot of money. But so from a reporting and actual management perspective, sustainability, and this may be one of

my last and final questions. Sustainability of the big beautiful bill and enrollment strategies you’ve highlighted on the optimistic pieces of this where carriers can like harness their strategy and get ahead. But operationally speaking, we can talk strategy all day long, but if we can’t execute. there’s, you know, three and a half more years to go, you know, under the new political office.

Is this sustainable?

Wesley: Yeah. And that, it’s, it’s a good question. And, you know, and admittedly like I’ve definitely, gotten out of the prognostication about what’s gonna happen politically, business.

I do think it’s, it’s fair to say this is going to be a challenging time and I try to be optimistic about it, but carriers do need to be thinking about, there are certainly headwinds there. You know, I think on the, on the provider side, given that there are gonna be a lot fewer members, you, I think to some degree that’s gonna help.

Resolves some of it. But of course, the members who are leaving are gonna be tend, are gonna tend to be the ones who are not utilizing to begin with. And I think, you know, this is a problem that for the industry to, you know, to try to face overall. And honestly, I, but I wouldn’t be surprised to see if the, if the Trump administration eventually rolls back some of the network adequacy stuff that was pushed through during the Biden administration.

And honestly like, I, you know, I think network adequacy, you know, is important. But I think the challenge is that I think network adequacy is honestly sort of, it’s sort of the same thing as, you know, Potter Stewart said about what is obscenity, you know, you know it when you see it.

And I think it’s very, it’s easy for carriers to create networks that meet adequacy on paper, but that anybody who interacts with healthcare system like you know, who the good physicians and good facilities are. You can meet time and distance and all this stuff, but still have a network that is not really meeting the needs of people who have particular conditions.

And so, you know, I, my hope is that CMS starts to hear some of the, start starts to listen to some of the critiques that I’ve shared around, like how they’re managing risk adjustment that create disincentives for broad networks. Because I think that’s actually the problem is that as long as there are economic disincentives to offering broad networks, carriers will figure out how to manage their network in a way that does not attract the risk that they want. And so, you know, you, and so I think, but I think honestly, for carriers, the bigger risk I see right now is around, the no Surprises Act and IDR and just how much that is, not favoring how much of, you know, the IDR cases are overwhelmingly favoring the providers.

And I think a lot of providers are soon gonna figure out like, well, why would I be in somebody’s network? Because I can get paid a hell of a lot more going out of network.

There’s a tough incentive in a MLR regulated market where it’s like, okay, well as long as every carrier accepts some egregious rates from a provider who figures out that they’re, you know, a must have in order to meet network adequacy. Well, carriers don’t really care. You know, like as long as everybody is getting charged the same thing. You know what do I care if I’m not paying 300% of Medicare if everybody else is for the same view of the service?

And I think that’s gonna be a thing that regulators are gonna have to figure out how do we solve some of that problem for providers who are, you know, who that favors on the flip side? Well, you know, you also need, I mean, we, you know, criminally underpay PCPs, which is a area that we need a lot more PCPs and until PCPs, you know, are compensated as they should be, we’re gonna continue to have those challenges there.

And I think as CMS tries to push some of this network adequacy stuff and realizing, you know, like in a state like I live in Georgia where there are 159 counties and sometimes there’ll be thinking like, well, you don’t have any OBGYNs in this county.

It’s like, well, there are 900 people who live in that county and they’re none of them. Not one of those 900 people is an ob gyn. I don’t know what to tell you. And again, like some of these frameworks that are just dealing with things like county is not a meaningful. Like is certainly on a nationwide basis, you shouldn’t measure anything by counties because counties are so very different.

Joe: I think you, I mean, so the other message here too is, so in addition to harnessing a strategy quickly and planning for the future, so knowing who your members are and what their conditions are. Advocacy. So you’ve said numerous times throughout our interview, connect with your state, work with your regulators because they will have a significant weight in, well, what

will happen in the future.

So forging those relationships, even like you mentioned, the state of Georgia, converting to a state-based exchange or considering that possibility other states such as Michigan doing the same.

You know, so we’re gonna see a lot of change in so local government, you know, not to be afraid of them.

You know, introduce yourself, make the phone

calls, set up the meetings, and have the

conversation.

Wesley: Yeah. I mean, I mean, when I, when I was a CFO and Georgia was implementing their 1332 waiver, that, you know, they did the reinsurance component first, and I, and I did the math, and originally the state was planning to just pay the entire reinsurance payment after the end of the cycle.

So you would’ve paid out all your claims, you know, in one year and you would get paid in like June of the following year. And I just kind of did the math and said like, okay, well that’s gonna be a problem for cash flow because now, you know, carrier’s gonna lose basically 25% of their premium revenue and it’s gonna hit even harder.

The way Georgia structured theirs was in rural counties, the 1332 waiver paid an even higher amount. And so in rural counties, like premiums are going down by 30, 40%. Okay, we’re losing 30, 40% of our revenue, but not gonna see any payment from it for, you know, potentially 18, 21 months afterwards, laid out that concern, did the math, and the state actually responded.

I think sometimes carriers are afraid to talk to the DOI or, you know, only like, try to be reactive or wait for a complaint or whatever. It’s like just, you know, have the dialogue.

I mean, that is, that is the, that is the nature of a regulator who has to approve things that you don’t, you know, that they don’t always think that they should approve. And, you know, there’s the reality of that. But if you’re, you know, a partner for like, Hey, we want the market to work, you know, I think that, you know, that certainly it’s a thing that carriers need to be doing.

And then I guess the last thing I would say is carriers also need to be. You know, they do have to constantly reevaluate their strategy and sometimes the, sometimes there is a market that they shouldn’t play in.

And that’s, and that’s okay. You know, not everybody can be good at everything, you know, and sometimes I think you have to make that determination.

If you don’t have, you know, things like, particularly on the contracting side, you know, their contracts do tend to be cheaper in the individual market. And if you are a carrier who hasn’t been able to pull off getting contracts that are comparable to what your competition is, I mean, now with all the transparency data that’s out there, it is, I won’t say easy, but it’s easier to figure out what your baseline is.

And if you, if you can’t get there, like risk, nothing can fix a pricing dislocation if you are paying 30% more to providers than your competitor. That’s, if you can’t fix that, you probably can’t play in this market. But I think some of that comes back to well, having conversations with your providers and making sure they understand what the alternatives are.

when I would have these conversations with providers and we’re, we’re talking about, Hey, we need a rate reduction. Often the way they would perceive it is like, well, you’re just, you just want to take, you know, the alternative is, I have two options.

Either keep all this money that you’re giving me or let you give me less. And helping them understand, well, no, the alternative is I leave and now you’re left with, whoever that is, that you are receiving less money from. And now all of my members will now go to them.

And so you actually, you know, the counterfactual to this negotiation is not the status quo where I keep losing money and paying more than what everybody else in the same market is. The counterfactual is, I have to leave. And carriers have to be willing to be a credible threat with that too.

Just again, from a like game theory perspective, if you always say, oh, well, you know, this might, but then you’re never willing to leave. Well, people will figure out that like, well, you know, you don’t meet it. So I think that’s the other thing is carriers have to be having these conversations with providers because I know, you know, providers are becoming more, the individual market has grown and providers are aware that it is more important than it was.

And even if it shrinks, it’s still gonna be decent size. And again, I think most of the shrinking, it’s gonna come from members who are not, you know, huge utilizers of the, of those providers anyway. And so carriers need to recognize that, you know, they only have so much control over their rates. You know, they, if they like, you know, it’s, it’s all a function of your costs.

And if you can’t do anything about your costs, you may need to, you may need to exit. And I think. You know that’s, that’s never a fun thing to do to le to leave a market. But I think, you know, it’s, it’s always, well the alternative is we leave in a spectacular way

Joe: I deeply appreciate your perspective, specifically also from a business and a financial perspective because it offers, you know, a different viewpoint from operationally how to approach this. And so I think with that being said, I mean, this has been a great discussion, Wesley, and, tell everybody where can we find you?

Wesley: Yeah, so you can visit our website at evensun. Com. We have a, we have a blog there where I post, lot, lots of different kind of market analysis. We also, we try to share a lot of, we try to share as much information as we can with the, with the market. We have a DIY SQL version of the ACA risk adjustment model that’s open source that we publish and ma and maintain. we have the 2026, risk adjustment factor. We already have that model built out, even though CMS won’t release their DIY for probably another, you know, year for 2026. you can find me on LinkedIn at Wesley Sanders.

I’m also on Blue Sky, although I don’t, I don’t post very often there. but yeah, you can, you can find us@EvensunEvensun. com and. and I’m always willing to, always love chatting with people about the ACA and about risk adjustment.

Joe: Thank you for all that you do and for everything for our members. That’s a wrap.

Thanks everybody for listening in. Give us a,

like, give us a share and we’ll see you all next time.

Wesley: Thanks so much for having me.