VII. Key Issues: Regulation & Reform >> C. Health Reform >> Affordable Care Act (ACA) >> ACA Repeal >> Components of ACA Not Working Well >> Health Exchanges >> Problems Related to Choice of Coverage (last updated 10.20.16)
- 1 Annual Plan-Switching
- 2 Quantity of Plans Available
- 3 Quality of Plans Available
- Shopping for Health Insurance Is New Seasonal Stress for Many. Over the past two years, the Affordable Care Act has created entirely new markets for health insurance, and a new way of buying it, via online exchanges that allow comparison shopping. They have brought coverage to nine million people, many of whom could not afford it or were rejected by insurers before. But these new markets have also seen sharp price swings, or changes in policies, that are driving many consumers to switch plans each year (New York Times, 12.4.15).
- Many Need to Shop Around on HealthCare.gov as Prices Jump, U.S. Says. “‘It really shocks me to see these plans with $5,000 deductibles, Belinda Greb, 56, of Vida, Ore., said in an interview. ‘It becomes an area of stress as opposed to making me feel secure.’ …only one insurer is offering coverage in the marketplace in Wyoming, and consumers have a choice of just two insurers in Alaska, Hawaii, Oklahoma, South Dakota and West Virginia. And that data, current as of Oct. 19, did not reflect the recent collapse of nonprofit insurance cooperatives in South Carolina and Utah.In Minnesota, officials approved increases averaging 49 percent for Blue Cross and Blue Shield of Minnesota, the largest insurer in the market. Even with the increases, the company said, ‘Blue Cross is likely to experience continued significant financial losses through 2016.’…The Iowa insurance commissioner, Nick Gerhart, approved rate increases averaging 29 percent for Wellmark Blue Cross and Blue Shield, the state’s dominant health insurer, and 20 percent for Coventry Health Care. The higher rates, he said, were justified based on the plans’ experience…in Hawaii, the insurance commissioner this month approved rate increases averaging 27 percent for the Hawaii Medical Service Association and 34 percent for Kaiser Permanente health plans.” (The New York Times, 10.30.15)
- Best Deals Require Plan Switching. The administration says that 86 percent of people who currently have coverage through the federal exchange can find a better deal by switching. In 2015, about half of returning HealthCare.gov customers at least shopped around before settling on a health plan, and about 25 percent switched — far more than many experts predicted. Those who switched insurers but kept the same level of coverage ended up saving about $490 over the course of the year in premium costs, according to a report by the Department of Health and Human Services.
- Annual Switching Stressful and Time-consuming. For many consumers, the volatility in the markets has been a source of anxiety and disruption. To have any choice at all is a welcome development, many say. But switching plans is also becoming an unwelcome ritual, akin to filing taxes, that is time-consuming and can entail searching for new doctors and hospitals each year.
- Potential Adverse Effects on Continuity of Care. Some experts have raised concerns that frequently switching doctors could result in worse health care, though carefully controlled research on the issue is sparse. Dr. Joseph Ladapo, a physician and health policy researcher at New York University School of Medicine, said it could be problematic in part because new providers often cannot get a patient’s old medical records. Doctors also may feel less invested in the health of patients they believe are with them only for the short term, he added. “It’s going to be a challenging issue to really parse out,” Dr. Ladapo said. “But it’s a very important one, and in general, any breaks in continuity that happen as a result of these narrowing networks or plan changes are probably not in the best interest of patients.”
- For Some, Annual Switching Preferable to Pre-ACA Market. As much as they dislike switching plans, people like Ms. Galen, who has a history of skin cancer, say it is far preferable to what they faced before the health law took effect. Then, many people with medical conditions could not get insurance or had to pay much more for it, and they clung to whatever coverage they could get because if they tried to switch to a different insurer, they would most likely be rejected.
- Plan To Simplify 2015 Health Care Plans May Backfire. “Insurance exchange customers who opt for convenience by automatically renewing their coverage for 2015 are likely to receive dated and inaccurate financial aid amounts from the government, say industry officials, advocates and other experts. If those amounts are too low, consumers could get sticker shock over their new premiums. Too high, and they’ll owe the tax man later. Automatic renewal was supposed to make the next open-enrollment under President Barack Obama’s health care overhaul smooth for consumers. But unless the administration changes its 2015 approach, ‘they’re setting people up for large and avoidable premium increases,’ said researcher Caroline Pearson, who follows the health law for the market analysis firm Avalere Health.” (Associated Press, 7.27.14)
- Frustration Runs Deep For Customers Forced To Change Marketplace Plans Routinely. “Doctor and hospital switching has become a recurring scramble as consumers on the individual market find it difficult or impossible to stay on their same plans amid rising premiums and a revolving door of carriers willing to sell policies. The instability, which preceded the health law, is intensifying in the fourth year of the Affordable Care Act’s marketplaces for people buying insurance directly instead of through an employer. ‘In 2017, just because of all the carrier exits, there are going to be more people making involuntary changes,’ said Katherine Hempstead, a senior adviser at the Robert Wood Johnson Foundation, a New Jersey philanthropy. ‘I would imagine all things being equal, more people are going to be disappointed this year versus last year.’ Forty-three percent of returning consumers to the federal government’s online exchange, healthcare.gov, switched policies last year.” (Kaiser Health News, 10.17.16)
Quantity of Plans Available
Competition on the Exchanges
Research and Analysis
Items are in chronological order.
- Kaiser Family Foundation (2014). Cynthia Cox, Rosa Ma, Gary Claxton, and Larry Levitt. Sizing Up Exchange Market Competition (3.17.14). Updated: Mar 01, 2014. An analysis of 7 states concluded: “early indications suggest that some exchange markets are more competitive than their states’ individual markets before the ACA. In particular, the two largest states, California and New York, have significantly more competitive exchange markets compared to their individual markets in 2012. Two states (Connecticut and Washington) that have also been successful at enrolling consumers seem to have less competition than in their 2012 individual markets. Results from the remaining states generally show either similar levels of competition as their pre-ACA markets or mixed signs.”
- Urban Institute (2014). John Holahan and Linda Blumberg. Marketplace Competition & Insurance Premiums in the First Year of the Affordable Care Act (August 2014). This study of 10 states concluded:
- 4 States With Limited Competition. These included AL, AR, RI, WV. “Each state market has a Blue Cross Blue Shield (BCBS) plan with a large market share; this scenario has long pre-dated the ACA…In general, these are dominated by a major insurer, typically Blue Cross Blue Shield, but even in these markets, the dominant insurer is still faced with the need to negotiate with providers. This is problematic in a state such as Rhode Island that has two dominant hospital systems that face little competition. In small towns and rural areas of some states, the limited number of providers gives the providers leverage even relative to a dominant insurer.”
- 6 States With Vibrant Competition. “In the other six study states, markets are far more competitive; there are many carriers, including large national plans, local commercial carriers, Medicaid managed care plans, and co-ops. More competitive markets are often characterized by limited or tiered provider networks.”
- U.S. Government Accountability Office. (9.29.14) “The U.S. Government Accountability Office found in a study made public earlier this week that in 40 states the largest insurers either maintained or boosted their market share through the health exchanges established by the Affordable Care Act. The GAO analysis is the first federal study published focusing on how competition within the health insurance market has been affected by Obamacare. The study also found that small-insurer offerings nearly vanished from the exchanges. In 2012, consumers in the individual insurance market on average could choose among 36 small-market company carriers in their state, each holding a market share of five percent of or less. But by 2014 those consumers could on average choose from only three insurers in their state exchanges, a decline of more than 90 percent.” (Washington Examiner, 10.2.14)
- Beilenson, Peter. (2.10.16) Risk Adjustment’ Threatens Obamacare. [Opinion] “While well-intended, the implementation of this safeguard has had the unintended consequence of a ‘reverse Robin Hood effect’— taking money from predominantly new, small, innovative plans (the new competitors that the ACA hoped would add both choice and innovation to health insurance markets around the country) and giving it to the big, established insurance carriers. The enormous risk adjustment windfall that went to the big multi-state insurance corporations is partly responsible for the current merger frenzy that will certainly result in less choice for Americans in insurance markets nationwide.”
- Wall Street Journal: Insurance Options Dwindle in Some Rural Areas. “Health-insurance customers in a growing number of mostly rural regions will have just one insurer’s plans to choose from on the Affordable Care Act’s exchanges next year, as some companies pull out of unprofitable markets. The entire states of Alaska and Alabama are expected to have only one insurer on the health law’s signature online marketplaces next year, according to state regulators. The same is expected to be true in parts of several other states, including Kentucky, Tennessee, Mississippi, Arizona and Oklahoma, state regulators said. So far, more than 650 counties appear on track to have just one insurer on the exchanges in 2017, according to the Kaiser Family Foundation, which is tracking withdrawals as they become public. That would be up from 225 in 2016.” (Wall Street Journal, 5.15.16)
- In The United States, ACA Marketplaces Lack Network Adequacy. “In the price-competitive ACA Marketplaces, plans with relatively narrow provider networks have proliferated. To find out how this affected access to care, Simon Haeder of the West Virginia University and coauthors used a ‘secret shopper’ survey of 743 primary care providers from five of California’s 19 insurance Marketplace pricing regions in 2015. They found that inaccurate and outdated provider information and a resistance to new patients were commonplace, both inside and outside California’s Marketplace, with only about 30 percent of efforts to make an appointment with a specific primary care physician ending in success. The authors conclude that more frequent updating (California currently requires quarterly updates), potentially coupled with incentives and penalties for both providers and insurers, might be the only path to improved access for patients.” (Health Affairs, 7.6.16)
- Obamacare’s Markets will be Less Competitive Next Year. Here’s Why. “‘Under any likely scenario, there will be less insurer participation in the exchanges in 2017 than there was in 2016,’ says Michael Adelberg, a senior director at FaegreBD Consulting who previously worked in the Obama administration helping to manage the marketplaces’ launch. ‘It seems pretty clear at this point there will be less competition in the marketplaces next year, particularly in rural areas,’ says Larry Levitt, senior vice president for special initiatives at the Kaiser Family Foundation… A recent analysis shows that Obamacare’s marketplaces will have twice as many exits as entrants in 2017… it’s not clear how well Obamacare will deliver on the president’s promise of ‘more competition.’… The Kaiser Family Foundation estimates that 664 counties will have a single marketplace insurer in 2017, up from 225 of these counties in 2016… So it is possible that what we’re seeing right now is that the more expensive plans — the ones that offer wide networks of doctors, low deductibles, and brand-name hospitals — are getting edged out of the market. And that the type of insurance sold through Obamacare will be much more homogeneous than we realized.” (Vox, 8.4.16)
- Last Obamacare Provider in Alabama Announces 39% Average Rate Hike for 2017. “Blue Cross Blue Shield of Alabama is the last remaining company offering individual plans on the Obamacare exchange in the state… UnitedHealth announced it was pulling out of most Obamacare markets in April. An analysis concluded that UnitedHealth’s retreat would significantly reduce competition, especially in more rural areas. Humana announced it was leaving behind most of its exchange business last month. The company will go from offering plans in 1,351 counties down to just 156 counties. (HotAir, 8.8.16)
- Health Insurers Trying To Survive The Obamacare Wasteland. “Larry Levitt of the Kaiser Family Foundation has been quoted as saying, ‘Something has to give. Either insurers will drop out or insurers will raise premiums.’ And that’s exactly what we’re seeing. Nationwide, there was a 12 percent decline in plans in 2016 as compared to 2015, and that includes a 40 percent decline in PPO plans. There will be even more exits in 2017. Prior to Obamacare there were 18 insurers offering individual coverage in Kansas. Today there are three. The Obama administration initially praised health insurance competition in Maricopa County, Arizona. This year there were eight plans available on the Obamacare exchange; next year there will only be four—unless Aetna drops out, too. And insurers that choose to remain are increasing premiums. Texas Blue Cross has requested an increase of up to 60 percent for its 2017 premiums, and Arizona Blue Cross requested a 65 percent increase.” Matthews, Merrill. (Forbes, 8.8.16)
- Is It Time To Acknowledge That Obamacare Is Collapsing? “People joked for a while about how insurers were pulling out of Obamacare markets so fast we might end up with areas in which there were no insurers at all. It’s no joke anymore: with Aetna’s massive withdrawal yesterday from the Affordable Care Act marketplace, Pinal County, Arizona, the third most populated county in that state, currently has no insurers selling policies on the Exchange. The issue isn’t so much whether people will be subject to the individual mandate tax of up to 2.5% of their income when there are no policies available… The issue is that Pinal County, although a bit of an outlier for now, is a harbinger for fundamental problems with the ACA now manifesting themselves with greater clarity across the country. When an insurer covering over 7% of those in the Exchanges and previously hoping to expand instead drops out, we better look at what is going on.” Chandler, Seth. (Forbes, 8.16.16)
- Arizona’s Pinal County Gains Health-Law Exchange Insurer. “Blue Cross Blue Shield of Arizona will offer plans on the Affordable Care Act exchange in Arizona’s Pinal County next year, resolving a situation that drew a national spotlight… Blue Cross Blue Shield of Arizona Chief Executive Rich Boals said in a statement that his company will be the sole exchange insurer in 13 of Arizona’s 15 counties in 2017. However, he said, ‘regulators and policy makers must find a way to stabilize the market and put long-term fixes in place.’… Neighboring Maricopa County is also now expected to have just one insurer, Cigna Corp., after Tenet Healthcare Corp.’s Phoenix Health Plans recently announced that it will withdraw from the exchange in the county. Phoenix Health Plans said in a statement that it had decided to discontinue the exchange plans ‘based on the economic challenges and underlying risks of the products.’ That would represent a sharp drop-off for Maricopa, which has had a large selection of exchange insurers.” (Wall Street Journal, 9.8.16)
- Think Your Obamacare Plan Will Be Like Employer Coverage? Think Again. “A typical Obamacare plan looks more like Medicaid, only with a high deductible. The typical marketplace plan covers a small number of low-cost doctors and hospitals, and offers fewer frills than employer plans. The recent high-profile exits of many of the national insurers from markets around the country will only heighten the shift… According to analyses by two consulting firms — Avalere Health and McKinsey — the number of plans that offer a wide choice of doctors and hospitals is on a steady decline. Two-thirds of plans were health maintenance organization plans that offer care from only a limited choice of doctors and hospitals this year, according to an analysis from McKinsey’s Center for U.S. Health System Reform. And even plans that offer out-of-network benefits were limiting the doctors who would be covered as in-network. ‘With recent carrier exits, this trend is only growing,’ said Erica Coe, a McKinsey partner.” (New York Times, 8.19.16)
- Obamacare Options? In Many Parts of Country, Only One Insurer Will Remain. “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. According to an analysis done for The Upshot by the McKinsey Center for U.S. Health System Reform, 17 percent of Americans eligible for an Affordable Care Act plan may have only one insurer to choose next year. The analysis shows that there are five entire states currently set to have one insurer, although our map also includes two more states because the plans for more carriers are not final. By comparison, only 2 percent of eligible customers last year had only one choice. A similar analysis by Avalere Health, another consulting firm, also highlighted the increase in areas with only one insurance carrier.” (New York Times, 8.19.16)
- Washington Post. Health-care Exchange Sign-ups Fall Far Short of Forecasts.(8.27.16) “Enrollment in the insurance exchanges for President Obama’s signature health-care law is at less than half the initial forecast, pushing several major insurance companies to stop offering health plans in certain markets because of significant financial losses. As a result, the administration’s promise of a menu of health-plan choices has been replaced by a grim, though preliminary, forecast: Next year, more than 1 in 4 counties are at risk of having a single insurer on its exchange, said Cynthia Cox, who studies health reform for the Kaiser Family Foundation. Debate over how perilous the predicament is for the Affordable Care Act, commonly called Obamacare, is nearly as partisan as the divide over the law itself. But at the root of the problem is this: The success of the law depends fundamentally on the exchanges being profitable for insurers — and that requires more people to sign up.”
- One Million Reasons Obamacare Made Things Worse. “There are five states whose Obamacare exchanges offer precisely one choice: Alabama, Alaska, Oklahoma, South Carolina, and Wyoming. The lack of competition in these states will inevitably produce rate increases that dwarf the hike decried by Minnesota’s governor. In Oklahoma it has already happened. The average increase for the hapless enrollees of that state will be 76 percent. Alabama enrollees will be hit with a mere 36 percent increase. The final rates aren’t in for the other three states on the single-insurer list, but they will make news. In addition to these states, there will be several others that are likely to have significant numbers of single-insurer counties next year. The Kaiser Family Foundation reports, ‘States with significantly more single-insurer counties in 2017 will likely include Arizona (87% of counties in 2017, compared to none in 2016), Mississippi (80% vs. 0%), Missouri (85% vs. 2%), Florida (73% vs. 0%), North Carolina (90% vs. 23%), and Tennessee (60% vs. 0%).’ The only county that appears likely to remain with no insurer at all is Pinal County, Arizona, the travails of which are discussed above. All of which means that more than a million Americans are going to lose their health plans — again.” Catron, David. (American Spectator, 10.17.16)
UnitedHealth Care May Exit After 2016
On 11.19.15, UnitedHealth, the country’s largest private health insurer, said that because of the “continuing deterioration” of its profits from Obamacare, it may quit offering coverage through the system by 2017. According to Reuters (12.1.15) “enrollment on the exchanges is about 9 million this year and is expected to grow to 10 million next year, half the size of earlier estimates. Insurers have said that weak enrollment and high medical costs have taken their toll on profits, but only UnitedHealth has said it might drop out in 2017…The company tried to keep costs down by selling plans with small doctor networks, and priced competitively, he said. It also signed up members with better health than the overall exchange population, but it still lost money, he said…Members enroll starting in November, but can also pick up coverage during the year based on life changes, like losing a job, and UnitedHealth said those members were the most costly. Hemsley said the company had formed its view of the issues based on its own business, but indications were that other insurers in the marketplace were seeing similar dynamics. He told investors that in order to stabilize, the market needs a bigger, more stable pool of enrollees.”
Also see Insurers Signaling Withdrawal from the Exchanges under ACA and Private Health Insurance.
- Potential Motivations for Announcement. LA Times reporter David Lazarus asserted: “Will the company really quit the individual insurance market? Most experts I spoke with said this would be unlikely.” “They’re probably just sending a message,” said Timothy McBride, a healthcare economist at Washington University in St. Louis. “They may be saying that to stay, they want to see higher premiums.”
- Short Term Impact. If United Healthcare decides to stop offering plans via Obamacare’s exchanges, approximately 500,000 people will need to find new plans, and potentially new primary care physicians, in 2017. The insurer also noted that it would stop actively advertising to potential Obamacare enrollees in order to minimize its losses.
- Long Term Impact. In response to this announcement: “We should be worried,” said Dana Goldman, director of the USC Schaeffer Center for Health Policy and Economics. “The long-term sustainability of the Affordable Care Act requires a functioning market with lots of players. If this is what the largest insurer is thinking, other insurers are probably thinking the same,” he said. “If the number of players shrinks, it will be a less functional market.” However, a Bloomberg View editorial (11.19.15) reported that “UnitedHealth’s decision — which is tentative — doesn’t mean much. The company covers less than 6 percent of the exchange population; if it does pull out, those people will be able to get other coverage.” According to the Huffington Post (11.20.15), “‘the news about United does not presage a death spiral,’ [Jon] Kingsdale said.”
- Higher Volume Has Not Offset Lower Margins. Sean Williams concludes: “No one exactly expected insurers to rake in high margins under Obamacare, but the presumption had been that a high volume of new members would more than make up for the drop in margins from Obamacare plans, ultimately becoming a positive for insurers in the end. Yet based on UnitedHealth’s quarterly results and its threat to leave Obamacare, it’s clear that this presumption hasn’t been correct.”
- Can Smaller Insurers Replace UnitedHealth? Sean Williams further observes: The real concern here is this: if UnitedHealth Group, the largest insurer in the U.S., and an operator in two-dozen Obamacare exchanges, can’t make money on the Obamacare exchanges, then who can? If UnitedHealth Group follows through with its threat to leave Obamacare, it would fall on smaller insurers to pick up the slack. Without much help from the risk corridor, these insurers would need to be on solid footing by the end of the year, or we could have a mess on our hands.”
- Other Large Insurers May Follow.
- Sean Williams notes that “Cigna and Aetna haven’t fared much better than UnitedHealth, and it’s not out of the question that they, too, could wind up pulling out altogether for the sake of their margins.”
- The Wall Street Journal reports that while Anthem and Aetna said on 11.20.15 that “individual commercial businesses have performed within expectations lately,” “the companies’ exchange-related business isn’t without troubles—Aetna said on an earnings call earlier this month that individual business for its public-exchange and consumer efforts remained challenging. It plans to participate on individual exchanges in 15 states next year, down from 17 states in 2015…Anthem said in October that its exchange membership declined in the latest quarter.”
Large Plan Mergers Pending
Anthem recently announced a $54 billion deal to acquire Cigna, and Aetna announced an agreement to acquire Humana for $37 billion. These companies would control nearly half of the United States commercial health insurance market, according to Decision Resources Group.
- Justin Holland, an insurance agent in San Antonio with Texas State Financial & Health, reacted with “That’s shrinking the carriers. That’s not good for the consumer right off the bat.”
- “But Richard Frank, HHS assistant secretary for planning and evaluation, says the proposed mergers face a long regulatory approval process, so it’s difficult to know how they will ultimately affect competition and premiums on the federal exchange.”
- Also see Insurance Company Mergers under ACA and Private Health Insurance.
Limited Availability of Large National Plans
The law requires at least two national plans in every state within four years, overseen by the federal Office of Personnel Management (OPM), which will negotiate rates and contracts. As of early July 2013, Blue Cross/Blue Shield plans had submitted their intent to offer a national plan that would be in 31 states next year. But potentially, that may still leave 19 states without any national plan leaving residents with fewer options and possibly higher premiums.
- Who’s Charging More for Obamacare Plans? Surprise … “A new analysis found that the largest insurer in each of the states served by HealthCare.gov raised their prices in 2015 much more sharply—by an average of 10 full percentage points—than smaller competitors on that federal Obamacare marketplace…The Harvard study’s results come after a separate piece of analysis released by HealthPocket earlier this month came in ‘contrary to expectations.’ The insurance comparison company found that in a dozen major counties across the U.S., a popular kind of health insurance plan tends to be significantly more expensive—by an average of 12 percent—when offered by health-care providers such as hospitals, as opposed to traditional insurers.” (CBNC, 8.28.15)
CO-OP plans initially were to have been available in at least 25 states. See main page for a discussion of the impact of CO-OPs on plan choice. See Failed CO-OPs for a discussion of the impact of the failure of CO-OPs in 14 states on the number of plans available in various states.
Quality of Plans Available
Exchange Plans Becoming More Medicaid-Like
- Is Obamacare Failing? “Obamacare was meant to be the beginning of America’s transition to a new health care system — it was common in those days to hear the law spoken of as a ‘platform’ or ‘a first step.’ Instead, Obamacare is proving to be something much more familiar, and much more limited. The marketplaces’ failures to attract a robust group of health plans to many areas suggests that Obamacare’s insurance expansion is on the path to looking like other safety net programs we know, offering limited services to a predominantly low-income population. ‘The exchange population — 85 percent of which qualifies for financial assistance — looks a lot like the Medicaid population,’ says Michael Adelberg, who previously served as the administration’s acting director of the exchange policy. ‘And with it, we’re seeing the start of the ‘Medicaid-ization’ of exchange plans: narrow networks with no frills.’” (Vox, 8.24.16)
- UnitedHealth’s Warning Shows How Medicaid Is Taking Over Obamacare. (Gottlieb, 11.19.15). “It’s the Medicaid managed care companies that are growing the number of plans they market on the exchanges. They are also offering the best prices. The cheap health plans that they end up selling on the exchanges mirror what they offer in Medicaid – in terms of the skinny doctor networks, the closed drug formularies, as well as the basic design of the austere health coverage.”
- Medicaid Managed Care Companies Dominating Exchange Market. “One of the untold elements of the rapid decay underway in the Obamacare exchanges is the massive shift toward the Medicaid managed care companies, and away from the traditional commercial insurers like UnitedHealth Group and Aetna.“
- Non-Medicaid Commercial Insurers Reducing Exchange Involvement. “Aetna, Anthem, and Cigna have all reduced the number of counties where they are offering plans this year. These commercial carriers are also offering some of the worst pricing, according to data compiled by the managed care analysts at Morgan Stanley MS +0.00%. Aetna, for example, increased its rates an average of 20% over last year. Anthem increased its rates 10% on average, and Humana 11%. Nationally, United hiked the price of its cheapest “Bronze” offerings 10% on average.”
- Only 1 Non-Medicaid Carrier Planned to Expand, but Now May Exit. “Of the commercial (non-Medicaid) carriers, only United was the exception this year, expanding the number of markets where it was offering Obamacare plans. But United is now saying that it may exit the exchanges entirely.”
- Medicaid HMOs Growing Footprint. “In 2015, the Medicaid HMOs like Centene and Molina have grown their footprint. These Medicaid carriers are also offering some of the best pricing on the exchanges. Molina’s pricing for its Obamacare plans will decline 5% from last year. Cenete cut the price on its ‘Gold’ product by 2%. Unlike the commercial carriers, the Medicaid HMOs have said that they plan to grow their Obamacare footprints.”
Reductions in PPO Offerings
- PPO Plans Being Displaced by HMO Plans. “Obamacare plans have all but ended PPO offerings. Most of the plans this year are closed network ‘exclusive provider organizations’ that are the most restrictive HMOs structure possible.” (Gottlieb, 11.19.15)
- PPOs are Disappearing from Obamacare. Why? “The fading of PPOs from the exchanges may very well be a reason why the ACA continues to experience public-perception issues, even as the number of Americans without health insurance has fallen dramatically since the enactment of the law. ‘This is a serious problem if you think one of the purposes of the Affordable Care Act is if you like your doctor, you can keep your doctor. That’s no longer true in many areas of the country,’ Seth Chandler, a law professor at the University of Houston’s Health Law and Policy Institute, told me.
- As of this year in New York City, individuals can’t sign up for a PPO either on or off the exchange; out-of-network coverage is only available through an employer plan.
- In the Houston area, according to the Houston Chronicle, there were 19 PPO plans available on the federal exchange in 2015; in 2016, there will be none available on the exchange and very limited access off the exchange for individuals.
- All together, the online insurance site GoHealth told CNBC it tracked a 41 percent decrease in PPO offerings on the federal exchange between 2015 and 2016.
- Even the PPOs that continue to be offered on the exchange markets are often pared back versions of the model. In Illinois, for example, Blue Cross Blue Shield of Illinois canceled a popular and rather expansive PPO in favor of one with more limited coverage. Prominent hospitals like the University of Chicago and Northwestern Memorial are no longer in the network.
- In addition, the Chicago Tribune reported, the out-of-network deductibles also increased, with no out-of-pocket hard stop, potentially leaving users on the hook for massive bills should they get ill. This is also a growing practice. The Robert Wood Johnson Foundation found the number of silver-level—that’s midtier—PPOs on the marketplaces with no maximum out-of-network pocket limit increased from 14 percent this year to 30 percent for 2016. (Salon, 12.14.15)
Disparate Essential Health Benefits
- Essential Health Benefits: 50-State Variations on a Theme. “All qualified health plans under the Affordable Care Act must cover a package of essential health benefits (EHBs) equal in scope to a typical employer plan. The law laid out 10 general categories of services that EHBs must cover, but did not itemize those services. As an interim policy for 2014 and 2015, the Department of Health and Human Services allowed each state to identify an existing plan as a benchmark for these EHBs. The result of this policy is that EHBs vary from state to state, often because of a legacy of different state-mandated benefits (such as treatments for autism, infertility, or temporomandibular joint disorders).” (Robert Wood Johnson Foundation, October, 2014)
- The ACA’s Pediatric Essential Health Benefit Has Resulted In A State-By-State Patchwork Of Coverage With Exclusions. “The approach used to establish the Affordable Care Act’s pediatric essential health benefit has resulted in a state-by-state patchwork of coverage with inconsistent exclusions, particularly with regard to services for children with mental or developmental disabilities.” (Health Affairs, December, 2014)