The Affordable Care Act (ACA) marketplace is not imploding. As the Kaiser Family Foundation’s Drew Altman pointed out, the ACA stability crisis is a matter of perspective. To understand how the marketplace is doing, you’d need to look state by state or perhaps county by county to more accurately assess. A tweet can’t contextualize this.
In broad strokes, most ACA beneficiaries will go unaffected by 2018 premium hikes and have at least one insurer option. When insurance companies raise 2018 premiums, most ACA beneficiaries will go unaffected due to federal assistance; 8.7 million people on the exchange receive premium subsidies and 5.1 million do not. Of the 3,141 counties in the United States, 17 counties are at risk of having no insurers participate in 2018; that’s 9,595 people. (According to insurance companies, they’ve raised rates largely because the Trump Administration has threatened to withhold subsidy payments and not enforce the individual mandate.)
The vast majority of Americans in the marketplace are looking at a relatively stable experience, but for 9,595 people, Obamacare is imploding. Insurance companies have until the fall to participate. They can quite literally save or sabotage a market until the last possible minute. Even so, the possibility of no ACA plans for 2018 is a very real threat right now. Counties in Ohio, Wisconsin, Indiana, and Nevada are at risk; of the 17 nationwide counties in crisis, 14 counties are in Nevada.
“I think people should be concerned about it. A large swatch of the geographic area will have no insurer,” Nevada’s ACA Exchange executive director Heather Korbulic told ThinkProgress. “When you don’t have access to health insurance, you’re going without care until it’s an emergency.”
If a county has zero insurers, residents are unable to purchase plans with federal assistance—including the tax credits that make otherwise expensive insurance affordable by lowering monthly premium costs. In June, Nevadans learned that 14 of its 17 counties would be without any ACA plan. When Anthem notified state officials it will pull out, the insurer offered to sell “catastrophic plans,” which can be sold off the ACA exchange, dubbed Nevada Health Link, but exclusively to those 30 and younger and without cost sharing reduction subsidies.
The ACA isn’t the only marketplace struggling to attract private insurance companies. Seven ACA bare counties are also without Medicare Advantage (MA) Plans, a conservative darling; MA plans are a federally funded private insurance option for seniors within Medicare.
“Those areas are underserved in general,” said Korbulic. A number of factors can contribute to insurance companies avoiding these markets: These counties have few providers so it’s hard for insurance companies to negotiate prices. These rural populations are small, which makes the health make-up crucial to keeping costs down. People who do purchase plans in these counties tend to be older and use their plans pretty regularly. Essentially, not enough young and healthy people purchase plans in these areas, which is key when insurers assess risk in a marketplace.
Korbulic says the federal government needs to commit to reimbursement to address the adverse selection phenomenon in Nevada. (When insurance is guaranteed, there’s risk imposed on insurers because consumers who are most in need of health care are more likely to purchase their plans.) Reinsurance helps protect insurers by reimbursing them for very high claims. When the ACA marketplace first launched in 2014, there was a temporary reimbursement program and more insurer participation, even in Nevada. The Senate health committee committed to stabilization talks in September, which could include reimbursement negotiations.
“I think it’s too late. I definitely support the market stability effort we are hearing about, and I look forward to working with state and federal colleagues, but it’s too late by September,” said Korbulic.
John Packham, director of the health policy research at the University of Nevada School of Medicine, anticipates all options are on the table to address Nevada’s ACA crisis.
“I don’t think it’s complicated why insurers are pulling out,” Packham told ThinkProgress. “They know the experience of the carriers who left. My impression is that they lost money.”
Packham says the threats coming out of Washington D.C. don’t help insurance companies make decisions in Nevada, and that creative solutions within the state’s reach need to be part of the state’s long term options. The Nevada legislator passed a Medicaid buy-in bill in an attempt to address bare ACA counties. The governor vetoed it because there was not enough data to back the idea; he did green light a “Medicaid buy-in” research committee as part of a piecemeal solution. Packham also flagged a Health Affairs article that would bring Medicare into the fold as a potential solution.
For now, what is Nevada to do about 2018?
“We are engaging in conversations and really again hoping a company will understand that the ACA is still law,” said Korbulic.