An estimated 20 million Americans have gained health insurance as a result of the Affordable Care Act (ACA), President Barack Obama announced in March. But coverage options are not consistent across the country, with some regions offering a menu of choices and others only one.
This trend will be exacerbated as major insurance companies back out of markets, according to a new analysis by Avalere Health, a Washington-based consulting firm.
Aetna, Humana, and UnitedHealth Group announced this summer that they will significantly decrease the number of areas where they will sell individual health plans in 2017, citing financial losses on those plans.
Health Plan Desert
Aetna announced on Aug. 15 that in 2017 it will reduce its individual public exchange participation from 778 to 242 counties.
The provider reported pretax losses of more than $430 million since January 2014 on individual products. It will only maintain an on-exchange presence in Delaware, Iowa, Nebraska, and Virginia.
With the departure of Aetna, Arizona’s Pinal County—a region next to Phoenix with a population of about 400,000—may become the first county in the nation to have a public exchange but no health plans to choose from in 2017. It’s conceivable more may follow.
“More than 40 payers of various sizes have similarly chosen to stop selling plans ... collectively exiting hundreds of rating areas in more than 30 states,” said Aetna in its statement.
“As a strong supporter of public exchanges as a means to meet the needs of the uninsured, we regret having to make this decision,” the company said. Aetna has been trying to merge with Humana, but the U.S. Department of Justice filed a lawsuit last month to block the move.
Currently, Blue Cross Blue Shield of Arizona is participating in the state, but it also announced plans to move out by 2017. Regulators must now look for another insurance provider to fill in the gap before the next enrollment season begins.
“This is a heartless decision at a time when big insurance companies are raking in millions and their stock prices are through the roof,” Congresswoman Ann Kirkpatrick (D-Ariz.), who represents Pinal County, said in a statement. Kirkpatrick said she has called on the U.S. Department of Health and Human Services (HHS) to develop a plan to attract more competition in rural counties and vowed to increase “pressure on the administration, state agencies, and insurance companies to work together to find a solution.”
Americans Without ACA Plans
While Pinal may be the first rating region to have no insurers at all, other areas will also see their options shrink.
Rating regions are the geographic areas used to set insurance premiums. Individuals are only allowed to buy plans offered within their rating region. Almost 36 percent of exchange market rating regions may be left with only one participating insurance carrier for 2017, up from 4 percent in 2016, according to Avalere Health. Other sub-region counties might end up with zero plans.
A total of 55 percent of the country will likely have two or fewer insurers to choose from. And some enrollees may need to choose another plan to continue having coverage.
“Lower-than-expected enrollment, a high-cost population, and troubled risk mitigation programs have led to decreased plan participation for 2017,” stated Avalere President Dan Mendelson in a statement.
Avalere’s analysis shows that seven states—Arkansas, Alabama, Kansas, North Carolina, Oklahoma, South Carolina, and Wyoming—will have only one carrier per rating region in 2017.
