This open enrollment period, residents in many states across the country have only one or two insurer options if they purchase plans on the Obamacare exchange.
In Delaware, residents have only one. After Aetna announced it was exiting the exchange in May — leaving Highmark as the only company insuring residents who don’t get coverage through work — Delaware Insurance Commissioner Trinidad Navarro said that he “would hope that our elected officials in Washington will come up with solutions to guarantee that health insurance in Delaware and elsewhere.”
Six months later, Senior Advisor to the Commissioner Vincent Ryan says “Washington hasn’t gotten their act together.”
Every Republican Senator voted to move their tax bill forward Wednesday. The tax bill is making major changes to every major federal health insurance program, including the Affordable Care Act (ACA). The bill repeals the individual mandate, which incentivizes people to have insurance or pay a tax penalty. The Congressional Budget Office (CBO) estimates that by repealing the mandate, 4 million people will be without insurance by 2019 and 13 million by 2027 — ultimately saving the federal government $338 billion. CBO also says premiums would on average increase by 10 percent.
While some senators argue reinsurance — which would give states $2.25 billion in 2018 and 2019 to reimburse insurers — would offset premiums increases, that’s not enough to make up for the loss of an individual mandate. Health experts are concerned that insurers could leave the Obamacare market altogether if the mandate was repealed.
“A big question mark is whether insurers would be willing to participate in a market with guaranteed coverage of pre-existing conditions and no mandate, even with reinsurance,” said the Kaiser Family Foundation’s Larry Levitt on Twitter. In a letter to Senate leaders, the American Academy of Actuaries also said “insurers would likely reconsider their future participation in the market” due to uncertainty generated by the elimination of the individual mandate.
When ThinkProgress asked Ryan if his office is concerned about Highmark exiting the Delaware exchange, leaving the state with no other options, he said “anything is possible unfortunately.” He added, “for year 2019, they may very well decide to not participate but [there has been] no formal discussion between this office and the company” about this. A Highmark Spokesman told ThinkProgress the individual mandate is a “critical piece of the ACA,” and that the company assess its ability to participate in the marketplace every year.
The Delaware Department of Insurance is going to begin planning for FY2019 in just a month, and the tax bill will make convincing companies to enter the marketplace that much harder, Ryan said. There’s no competition in Delaware, so there are higher premiums. Delaware is trying to change this, but it’s “hard to [attract] companies because of uncertainty and a small risk pool,” he said. By “small risk pool,” he means it’s a small state, fewer people sign up, and a lot of them are more expensive for insurers.
There are some reinsurance proposals in Congress. Sen. Tom Carper (D-DE) proposed a bill in June that would create a permanent reinsurance program. A bill by Sen. Susan Collins (R-ME) would create a temporary reinsurance program, and among her conditions for supporting the G.O.P. tax bill is passing her reinsurance bill along side it. But what is to happen in subsequent years when the money depletes?
“One thing I learned after doing this for four years is what insurance companies hate above all else is uncertainty,” Charles Gaba, an Obamacare statistician and author of the blog ACA Signups, recently told ThinkProgress.
Delaware insurance officials are far from the ones roiling due to uncertainty out of Washington, D.C. right now. Many insurance commissioners have expressed concern about repealing the mandate, including those from red states.
There are eight states where there is only one insurance company providing health plans in every county statewide according to healthinsurance.org: Alaska, Delaware, Iowa, Mississippi, Nebraska, Oklahoma, South Carolina, and Wyoming.
Like the G.O.P. health care reform over the summer, tax reform has been rushed. Because the Senate has held zero hearings with experts to address how repealing the mandate would affect insurer participation, ThinkProgress reached out to insurance companies to see what they think about the Senate repealing the individual mandate.
Every company that responded to ThinkProgress’ inquiry agreed there needs to be an incentive for residents to purchase health care. South Carolina’s Blue Cross Blue Shield and Mississippi’s Magnolia did not immediately respond.
“In 2014 there were five carriers in the market—now there is only one… We continue to advocate on behalf of our customers to state and federal policy makers the importance of creating incentives for people to purchase coverage. We believe this will create a more balanced risk pool and help strengthen the overall market.”
“We understand Congress is once again discussing the elimination of the mandate but, honestly, we will wait and see what they do before we start to speculate on the impact. However, we would like the mandate to stay in place. It goes hand and hand with the idea of guaranteed coverage and getting more people into the risk pool.”
Oklahoma (And also applies to IL, MT, NM, OK and TX); Blue Cross and Blue Shield operated by Health Care Service Corporation:
“One of the most important factors for this market to work for all of our members is having the broadest participation possible. Broad and consistent participation in the individual market helps spread the cost of those individuals with high medical needs, which in turn helps stabilize premiums… If the penalties associated with the individual mandate are eliminated, then additional reforms are necessary to make coverage more affordable and to encourage individual to maintain continuous coverage.”
Wyoming; Blue Cross Blue Shield:
“We’re a Wyoming-grown not–for-profit company and we see ourselves as part of the fabric of this state. We plan to continue participating in the Marketplace in order to serve Wyoming residents, although we recognize the significant impact that repeal of the mandate may have on premium rates in the coming years.”
In addition, there are numerous counties nationwide — from California to Maryland — where residents only have one insurer option because companies commit to providing coverage on the county-level. According to the Kaiser Family Foundation, in 2018, 26 percent of Obamacare enrollees will have one insurer option.
Over the summer, states were able to avoid “bare counties,” a phrase used to describe counties that have zero insurers participating in the Obamacare exchange. Tough negotiations between state officials and insurance companies avoided a nightmare scenario for consumers, but uncertainty over health care law will undoubtedly make this harder for FY2019.
“A federal administration that doesn’t seem to commit to having [Obamacare] work successfully — that is not supportive, it’s a hard sell.” Justin Giovannelli, an associate research professor at Georgetown University Health Policy Institute, told ThinkProgress.