How ObamaCare is splitting in two–23gh, 13.14
There’s the one in coastal and northern areas, where the marketplaces include multiple insurers and plans. And there’s the one in southern and rural areas, where there is often little competition, a situation that can lead to higher premiums.
“There’s really two kind of stories that are playing out,” said Cynthia Cox, who studies insurer competition at the Kaiser Family Foundation (KFF).
The trend is likely to be accelerated by the departure of Aetna and UnitedHealthcare from ObamaCare marketplaces in 2017. The loss of those insurers won’t affect all parts of the country equally, experts say.
“The combined effect of these exits is mostly concentrated in southern states and particularly rural counties within those states,” Cox said.
According to an analysis from the consulting firm Avalere, as of now, there will be just one insurer offering ObamaCare coverage next year in seven states: Alabama, Oklahoma, South Carolina, Wyoming, Alaska, North Carolina and Kansas. It is possible that more insurers could enter these markets before next year.
In one county in Arizona, there might not be an ObamaCare plan available at all.
Aetna had been the only insurer offering a plan in Pinal County. Unless federal and state officials can find another insurer to fill the void in 2017, the county’s 400,000 residents will not be able to buy coverage on an ObamaCare exchange.
The dearth of options in rural, sparsely populated areas is a far cry from what Democrats promised when selling the Affordable Care Act.
Obama talked at the time about how the law would create a “one-stop shop” for insurance, comparing it to websites where people can look for airline tickets.
“Just visit healthcare.gov, and there you can compare insurance plans, side by side, the same way you’d shop for a plane ticket on Kayak or a TV on Amazon,” Obama said in 2013. “You enter some basic information, you’ll be presented with a list of quality, affordable plans that are available in your area, with clear descriptions of what each plan covers, and what it will cost. You’ll find more choices, more competition, and in many cases, lower prices.”
In states like Oklahoma, the reality is different, with just one insurer to choose from in the online marketplace.
“We certainly see this as an issue,” said Mike Rhoads, Oklahoma’s deputy insurance commissioner. “With only a single carrier out there, there is no competition.”
“I think competition drives price sensitivity by these carriers,” Rhoads said.
Adding to the geographic disparities under ObamaCare, many of the same states where insurance competition is lacking declined the health law’s expansion of Medicaid. Because of that, many lower-income people have no insurance option at all.
Still, many rural areas had few insurance options before ObamaCare came along. Back then, individual plans were pricey and difficult to find, and insurers could reject people with preexisting conditions.
Under ObamaCare, insurers cannot deny coverage for health conditions, and lower-income people receive financial assistance to offset the cost of premiums.
Cox, the Kaiser Family Foundation expert, said the main consequences of insurers leaving ObamaCare next year will be enrollees having to switch plans. The cost to the federal government of providing ObamaCare, meanwhile, could rise if premiums increase.
In Oklahoma, Rhoads said he has been trying to recruit more insurers to join the ObamaCare marketplace, but found no takers.
“We see no other carriers willing to come in,” he said. “We certainly have had conversations with some of the national players.”
Rhoads said he spoke with two insurers that participated in ObamaCare’s first year about returning. They declined, citing the financial losses they suffered before.
“There’s a little bit of giggling in the background when we ask this question, and we understand that they’ve been there, they’ve done that, they’ve taken their lumps,” Rhoads said.
“As we discussed with one of the CEOs of a large HMO, who had competitive rates, they had their losses and their board of directors was just incensed that they hadn’t made money, and it caused some turmoil within the organization,” he added.
Relying on just one insurer to offer coverage runs the risk of having ObamaCare disappear, should that insurer bail from the marketplace.
In areas with just one insurer, it is almost always a Blue Cross Blue Shield plan. While those plans have generally expressed their commitment to continuing to offer ObamaCare coverage, they have also pressed the Obama administration for policy changes like tightening up the rules for extra sign-up periods that sick people can use to game the system.
source–peter sullivan, cynthia cox, avalere, mike rhoads