Editor’s note: This is the first segment in a series about how the ACA’s state-based and federally facilitated health insurance exchanges are changing as 2017 open enrollment nears.
Aetna on Aug. 15 announced its exit from 11 Obamacare health insurance exchanges, joining the ranks of UnitedHealth and Humana.1,2,3 That makes three major U.S. health insurance companies in three months that have revealed plans to largely pull out of the state and federal health insurance exchanges established under the Affordable Care Act.
Not only that, Aetna wants to acquire Humana and evidence obtained by Huffington Post reporters shows that Aetna’s departure may have been retaliatory—a reaction to the government’s motion to block the merger.4
The nation’s biggest health insurance players aren’t the only ones bailing to focus on the off-exchange market or dropping individual coverage all together. Scott and White and the health insurance startup Oscar Insurance are among other insurers leaving the certain ACA exchanges.5,6
Across the board, one common reason cited for the bow-outs: Cost. Insurers say they are losing money.7
Limited competition and the impact on self-insured consumers
Surely, these changes will affect those who buy coverage in the individual health insurance market, especially the HealthCare.gov marketplace. At question: How, exactly?
Health insurance carrier and plan options – It’s pretty clear that fewer carriers mean fewer options for consumers who shop the Obamacare exchanges. In some places, such as Knox County, Mo., and Pinal County, Ariz., it means only one choice and possibly none at all.8,9
The 2017 health insurance landscape has yet to be finalized and the total number of individuals affected by pullouts has yet to be seen. Cynthia Cox, associate director of health reform and private insurance at Kaiser Family Foundation, told USA Today that, “roughly four or five states could have just one insurer in the whole state.”10 Cox predicts those living in rural, southern areas will notice the shortage of options more than those living in densely populated areas.
Provider access – With less marketplace competition, some health experts foresee the possibility that insurers may further tighten their provider networks.11 That could mean consumers have fewer in-network doctors and hospitals from which to choose.
Cost of coverage – Benchmark plans are used to establish Obamacare subsidies (i.e., premium tax credits and cost-sharing reductions). If a carrier leaves the market and takes a benchmark plan with it, another plan will be used to calculate subsidy amounts. However, this could happen regardless of insurer departures because a benchmark plan is the second-lowest-cost Silver plan available through the exchange in a given area. As such, that plan can change from year to year based on rate changes.
I have an Aetna plan—or another plan that’s leaving Obamacare. Will I lose my coverage now?
The companies making an Obamacare exit will do so for the 2017 coverage year. That means they will not offer plans when 2017 open enrollment begins Nov. 1, 2016. However, those who currently have exchange-based plans with these insurers will keep paying premiums and retain their coverage through Dec. 31, 2016.