August 25, 2016 (San Diego) with AETNA and other large insurers leaving the Afordable Care Act (ACA0 exchanges we are going to see less plans and competitions. According to Avalere, “nearly 36 percent of exchange market rating regions may have only one participating insurance carrier offering plans for the 2017 plan year and there may be some sub-region counties where no plans are available.”
While the worst results will not come to California, as in having only one insurance company in the exchange, this will affect the national system created by the ACA. The system relies on a large number of companies to give the best choice to the customer. Companies, such as AETNA, have said that they are losing money, why they are withdrawing. Avalere has the following suggestions:
- Improve market stability through enhanced risk mitigation programs, including changes to the risk adjustment transfer formula and permanent reinsurance.
- Change current enrollment rules to minimize adverse selection, including tighter special enrollment period standards, lock-out periods for consumers who delay enrollment, reforms to the 90-day grace period for individuals receiving exchange subsidies, and incentives to encourage enrollees to maintain continuous coverage.
- Encourage more individuals to enroll in coverage to grow the risk pool, including additional funding for outreach, enhanced or reformed subsidies, or stronger mandate standards.
- Introduce new insurance products or market rules to make exchanges more attractive to younger, healthier individuals, including changes to the age rating provisions, new and/or lower-cost plan options, or expanded eligibility for other public programs (i.e. Medicare or Medicaid).
California, according to thier analysis is expected to have at least two carriers, with most of the state having more than 2 carriers. The problem is that the program will only succeed nationwide if it does all over. Their analysts write: “Avalere’s analysis indicates that seven states (AK, AL, KS, NC, OK, SC, WY) will have only one carrier per rating region in each rating region in the state in 2017.”
The McKinsey Center of U.S. Health System Reform has similar findings. Though theirs are far more granular and they also foresee a decreased carrier participation in some California counties. These tend to be more rural counties, such as Inyo and Mono Counties. San Diego is still expected to have 5 or more providers.
Less providers will weaken the system, since it requires wide participation for success. The system is starting to show the many issues that critics first voiced when the discussion on the ACA occurred.