Industry giants Aetna (AET), UnitedHealthcare (UNH) and Humana (HUM) are scaling back their presences on the exchanges. And smaller insurers, including more than a dozen co-ops funded by the federal government to foster competition, have gone out of business or are dropping out of the program.
Nearly 36% of markets may have only one insurer participating on the exchanges, up from 4% this year, according to an analysis by Avalere Health, a consulting company. And nearly 55% may have two or fewer choices, up from 33% in 2016.
Tennessee’s insurance regulator approved hefty rate increases for the three carriers on the Obamacare exchange in an attempt to stabilize the already-limited number of insurers in the state.
The rate approvals, while a tough decision, were necessary to ensure that consumers around the state had options when open enrollment begins in November, said Julie Mix McPeak, commissioner of the Tennessee Department of Commerce and Insurance. BlueCross BlueShield of Tennessee is the only insurer to sell statewide and there was the possibility that Cigna and Humana would reduce their footprints or leave the market altogether.
So much for choice. In many parts of the country, Obamacare customers will be down to one insurer when they go to sign up for coverage next year on the public exchanges.
A central tenet of the federal health law was to offer a range of affordable health plans through competition among private insurers. But a wave of insurer failures and the recent decision by several of the largest companies, including Aetna, to exit markets are leaving large portions of the country with functional monopolies for next year.
Aetna’s sudden decision to quit most of its Obamacare insurance markets was the latest mess in the health law’s rockiest stretch in almost three years. It’s Kevin Counihan’s job to clean it up.
Counihan, CEO of the federal insurance marketplace, told POLITICO’s “Pulse Check” podcast that Aetna’s flip-flop — the company announced Monday it will exit from 69 percent of counties it now serves through Obamacare, just three months after committing to stay and even expand — doesn’t alter the administration’s strategy.
Health insurer Aetna Inc. will stop selling individual Obamacare plans next year in 11 of the 15 states where it had been participating in the program, joining other major insurers who’ve pulled out of the government-run markets in the face of mounting losses.
It will exit markets including North Carolina, Pennsylvania and Florida, and keep selling plans in Iowa, Delaware, Nebraska and Virginia, Aetna said in a statement Monday. In most areas it’s exiting, Aetna will offer individual coverage outside of the program’s exchanges.
Barred from restaurants, banned on airplanes and unwelcome in workplaces across America, smokers have become accustomed to hiding their habits. So it’s no surprise many may now also be denying their habit when they buy health coverage from the federal health law’s insurance exchanges.
Insurers, who can charge higher rates in most states to admitted smokers, are steamed.
As some of the nation’s largest health insurance companies grapple with mounting claims from the sickest Americans buying individual coverage under the Affordable Care Act, the Obama administration said today it is “exploring options” to help health plans adjust for these patients.
Health Insurance Marketplace CEO Kevin Counihan is looking at ways to improve the “permanent risk adjustment program” that helps insurers cope with the sickest of patients. Insurers including Aetna, Anthem, Humana and UnitedHealth Group are complaining they are losing hundreds of millions of dollars because there are an extraordinary number of sick patients with greater needs than they anticipated.
Obamacare has provided health insurance to some 20 million people. But are they any better off?
This has been the central question as we’ve been watching the complex and expensive health law unfurl. We knew the law was giving people coverage, but information about whether it’s protecting people from debt or helping them become more healthy has been slower to emerge.
A few recent studies suggest that people have become less likely to have medical debt or to postpone care because of cost. They are also more likely to have a regular doctor and to be getting preventive health services like vaccines and cancer screenings.
Joe Cortelli, a health insurance expert from the nationwide consulting group HIG, explains:
“We have done nothing to improve the outcomes of the 10% of the population that drives 80% of our claims costs. We have merely pumped billions of dollars into these [ObamaCare] exchanges masking the real problems. Unless the government can continue to pump money into these exchanges, the end result is not that hard to imagine. It is not a question of how, but when, this will all come home to roost.”
The facts support this. Millions of previously uninsurable sick people are flooding the insurance market, driving premiums sky high. As noted in the Fiscal Times, “The combination of market forces and limitations imposed by the [ACA] will put enormous pressure on insurers to up their premiums.” The pressure on insurers is undeniable, including the $650 million losses recently reported by UnitedHealth.
Investor’s Business Daily in an editorial says that the following predictions from Obamacare critics actually came true: Young people would opt to pay the penalty instead of getting insurance, premiums and medical claims would increase, people would wait until they got sick to buy insurance and cancel the plan after the bills were paid and insurers would leave Obamacare after they lost money.