More than 1,370 counties may only have one health insurer serving them

More than 1,370 counties now have only one insurer that will sell on the Affordable Care Act exchanges next year, while about 40 have none, an analysis of the latest data by the Robert Wood Johnson Foundation and USA TODAY shows.

The exodus of insurers is due in large part to the uncertainty created by the Trump administration, industry and other health care experts say. And even some insurers that submitted 2018 plans and proposed rates with state insurance commissioners are publicly wavering about whether or not they will follow through and sell them. They have until at least mid-September to change their minds.

Insurers are increasingly exiting the off-exchange market as well, forcing wealthier people who buy unsubsidized plans to rely on the very Obamacare marketplace the administration and Republicans in Congress have pilloried and worked to undermine. And that’s if there are still insurers selling plans at all in some counties.

President Trump has referred often to these people as “Obamacare victims” because of steep premium increases. However, about two-thirds of the rate increases proposed for 2018 are due to the administration’s own actions, the consulting firm Oliver Wyman estimated last month.

The Affordable Care Act (ACA) replacement bill that could come up for a vote after senators return from their July 4th recess includes funding to pay for subsidies that reduce deductibles and co payments for about 7 million people. Trump has refused to commit to continue funding them and his administration has suggested it might not enforce the mandate that people have health insurance.

Insurers support the mandate because healthier people are less likely to buy plans if there’s no penalty and they’re needed to offset the cost of covering sicker people.

Rate hikes proposed so far range from 11% in Vermont to 50% in New York. The national range at this point would be far lower it wasn’t for this “Trump Tax” of insurers pricing with the assumption they won’t be reimbursed for the subsidies or that the mandate to have insurance won’t be enforced, says Charles Gaba, a data expert who runs ACASignups.net.

Medica, Iowa’s reluctant only insurer on or off the exchange, just announced requested rate increases of nearly 45%.

Along with steep losses, insurers including Anthem in Ohio and Aetna cited this uncertainty when explaining decisions to depart states’ insurance markets. Daniel Hilferty, CEO of Independence Blue Cross and Blue Cross Blue Shield of Tennessee are among those publicly saying their filings are not final decisions to stay on the exchanges.

“For the first time, this has to be wait and see,” Hilferty said in a recent interview.

If his company left the exchanges in New Jersey and Pennsylvania, it would leave several counties around Philadelphia without an insurer for people who need to shop on the exchange. Independence would, however, remain in the off exchange market to retain a presence in individual plan sales.

The most vulnerable exchange counties are in Indiana, Ohio and Missouri, but wealthier small business owners and others could be out of luck in other parts of the country where there are only one or two insurers selling on the exchanges.

“In those places, (insurers) are just entirely throwing up their hands and walking away,” says Paul Howard, director health policy at the free market Manhattan Institute.

Due to the uncertainty surrounding the ACA, insurers may be more likely to file and then reconsider the decision this year, says Robert Wood Johnson Foundation senior adviser Katherine Hempstead.

ACA critics say the law is in a “death spiral” and focus on rising premiums and the number of insurers that have dropped off the federal and state exchanges as evidence. But insurers have been increasingly leaving the “off exchange” insurance market, the new analysis shows.

People earning less than 400% of the federal poverty level—or about $97,000 for a family of four—are eligible for tax credits to help pay their premiums, but have to buy on the exchanges to get them. The tax credits increase with the premiums.

Consumers who don’t get financial assistance can buy direct from insurance companies or brokers, but get the full brunt of premium hikes.

Off exchange plans sometimes have better features, such as out-of-network benefits, says Hempstead. Chicago broker Jordan Wishner says buying off the exchange also eliminates the “marketplace headache” of dealing with technical glitches and spotty call center service with Healthcare.gov.

While it may not be necessary to have the government run the exchange, Hempstead says consumers need an unbiased place to shop online to compare products.

“The federal and state exchanges are currently the most important distribution channel for individual coverage,” says Hempstead. “They are critical, not just for those needing tax credits, but for the market as a whole.”

Markets for wealthier people

Until recently, when insurers dropped off the exchanges, they typically remained in the off-exchange market, where higher-income people who tend to have fewer health problems shop. That was sometimes because they wanted to sell other types of insurance in the state or wanted to be able to go back to selling ACA exchange plans later if the market improved.

Now, several have given up that option. Aetna bucked that trend when it began leaving states altogether for 2017.

“I do think it’s a mess,” Charleston, S.C. radiologist Tara Noone says of the individual market.

Noone, who is in private practice with her physician husband, says they pay about $1,600 a month for their family of four for insurance with an $8,000 deductible. There’s only one insurer—BlueCross BlueShield of South Carolina—selling plans that meet the ACA standards.

She describes “basically just paying all providers for care out-of-pocket myself and paying way too much for catastrophic coverage.”

Competition—and subsidies— can keep insurance more affordable. In California, adjunct college professor Elisa Urmston’s subsidized plan went from $150 to $240 with a $5,000 deductible this year and she had 11 insurers to choose from. Before the ACA, she went 10 years without insurance after a cancer battle made plans too pricey, so “I know from terrible. This is not terrible.”

The current political debate is making Urmston very nervous: “I’m looking at this and thinking, ‘Well it was nice while it lasted, but we’ll see.'”

When there’s only one or two insurers left in a state or county, which insurer it is can be as important as the fact they are the only one, says Hempstead.

Big national insurers, such as United Healthcare, Aetna and Cigna are among those that have abandoned the ACA exchanges the most.

Like South Carolina, many southern states have only one insurer, but it’s a non-profit Blue Cross company that only does business in that state and is less likely to leave. Most of North Carolina only has the insurer Blue Cross Blue Shield of North Carolina, but the insurer did threaten to leave the exchange last year for 2017..

Iowa’s predicament makes the opposite point. A much smaller insurer, Medica, was left with the likelihood it would be the only insurer left selling individual politics on or off the ACA exchanges after Wellmark Blue Cross Blue Shield dropped out.

Fears of Medica’s withdrawal prompted Iowa’s insurance commissioner to race to get approval for an ACA waiver that would, among other things, allow insurers there to charge older people more and younger people less than the ACA allows.

Approval is still pending and Medica filed to sell in Iowa, although could still leave the state before mid-September as others across the county can.

Wellmark has said it would remain in the market if the plan is approved by the Centers for Medicare and Medicaid Services.

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Insurers’ exits from states don’t affect people who get their insurance through their employers or government program, such as Medicare or Medicaid.

Insurance companies selling outside of the ACA exchanges tend to be the larger national carriers or Blue Cross Blue Shield, says Hempstead. Smaller carriers including Molina Healthcare and Centene tend to specialize in lower income consumers. Centene said last month that it plans to sell ACA plans in Kansas, Missouri and Nevada and to expand in six other states.

“For people paying out of their own pocket, the risk pool is just bad,” says Howard, referring to the number of healthy vs. sicker patients buying insurance. “There’s not enough competition between providers to get rates down to a more sustainable level for insurers and their populations.”

If all the insurers selling ACA plans left a state or county, there would still be some insurance available to these higher-income consumers; it’s just that many experts say isn’t “real insurance.”

States including Iowa, Virginia and Nebraska allow insurers to sell plans that aren’t comprehensive enough to meet the ACA. These include things like short-term plans, coverage for accidents or specific diseases.

This type of insurance, sold by companies including U.S. Health under brands Freedom Life Insurance and National Foundation Life Insurance, can have higher rates depending on a person’s medical history and age. The ACA prohibits insurers from charging people more—or rejecting them—based on pre-existing conditions and greatly restricts how much more than can charge older people.

They’re “phantom plans,” says Gaba. He reported last year that U.S. Health’s ACA exchange plans typically only covered one person in the states where its pricey plans were on exchanges.

Contributing: Camille Chrysostom, Erin Barry and Kate Covington

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