In March, the Centers for Medicare and Medicaid Services (CMS) reported that 12.2 million people had signed up for health insurance using federal or state exchanges. That tally represented about half a million people fewer than in 2016, a clear indicator that political unrest over healthcare reform and a new administration had affected enrollment. On June 9, the CMS released a county-by-county map detailing insurer participation for 2018, and it’s not good news. For nearly 40 percent of the country, health insurance options on the exchanges could dwindle to just one plan next year. Even worse, at least 47 counties representing 35,000 people won’t have any on-exchange options at all.
Limited Options Nationwide
The CMS projection takes into account several announcements from major and minor health insurers who have bowed out of the exchanges on a state or nationwide basis. The map will fluctuate as more insurers decide whether to scale back or end participation altogether. As it stands, several major insurers have opted out. These include:
- United Healthcare, which left the exchanges in 2017;
- Humana, which bowed out early for 2018;
- Aetna, which announced on May 10 that it would be cutting ties with the last remaining states where it sold qualified exchange plans; and
- Anthem, which declared on June 6 that it would be leaving the marketplace in Ohio, effectively rendering 18 counties in that state without any exchange options for 2018.
If the mass exodus of insurance giants wasn’t bad enough, smaller companies are taking cues from their larger peers and leaving the exchanges as well. On May 3, Minnesota-based Medica announced that it might not offer exchange plans in Iowa for 2018. Two major insurers already left the exchange in Iowa for next year (Anthem and Wellmark Blue Cross and Blue Shield), which left Medica as one of two options for residents there. If Medica leaves, most Iowans would face zero options for on-exchange plans next year.
Iowa residents left without exchange plans would join the 47 counties in Missouri, Ohio and Washington State that will also face this problem in 2018. Unless other insurers enter the markets where larger companies are fleeing, thousands of Americans would not be able to buy health insurance on the exchanges. Nationwide, the problem is even bigger. The CMS estimates that about 40 percent of the country could face just one exchange option. That equates to about 1,200 counties across 23 states or 2.4 million customers.
Fear about the Future
The deadline to submit federal exchange offerings is June 21, but some companies are hesitant to weigh in on whether they’ll participate for 2018. Rate filings have been coming in over the last month, and the numbers aren’t pretty for next year. Customers across the country could get hit with skyrocketing premiums. Of the insurers that have submitted rate requests to state insurance departments already, premiums are spiking in places like North Carolina (23%), Maryland (27%), Virginia (31%) and Connecticut (34%).
Rate increases are due in large part to uncertainty over whether the Trump administration will proceed with the Affordable Care Act’s cost-sharing reduction payments (CSRs). Under current law, insurers are supposed to be reimbursed for cost sharing that they absorb on behalf of low-income enrollees to offset the cost of premiums. This year, those payments total $7 billion. Republicans successfully challenged this provision last year, and a case is pending in court – while insurance companies await payment. Without these reimbursements, insurers are unlikely to continue participating in the Obamacare exchanges because they’re losing too much money as it is.
Deep financial losses are keeping major insurers away from the ACA marketplaces in 2018, a trend that has continued over the last year. The Kaiser Family Foundation has been tracking insurer participation since 2014, and while the rate remained steady in 2015 and 2016, there was a sharp decline from last year to now, evidenced by states like Arizona and Texas, which each lost six issuers in 2017.
- Arizona dropped from eight issuers to just two
- Texas went from 16 to 10
- Kentucky, Oregon, and Ohio each lost four issuers
Virginia, the only state to see an increase in participation for 2017, added one more option to its exchange this year. Across the U.S., average issuer participation dropped from six to four on state and federal exchanges. Analysts fear that insurer participation could continue to drop dramatically as healthcare reform raises questions about cost-sharing reduction payments and enrollment. The Senate is currently creating its own version of the American Health Care Act (AHCA or Trumpcare), which could be up for a vote by the end of the summer. Until then, uncertainty is the name of the game.