FAQs: How Aetna's move will affect consumers
Aetna, citing heavy losses, this week announced plans to pull out of the Affordable Care Act’s exchanges in 11 of 15 states where it currently offers plans. The company said it will reduce its individual public exchange participation from 778 to 242 counties for the 2017 plan year, maintaining an on-exchange presence in Delaware, Iowa, Nebraska and Virginia. The company will continue, however, to offer an off-exchange individual product option for 2017 to consumers in the vast majority of counties where it offered individual public exchange products in 2016. UnitedHealth Group and Humana have also said they plan to reduce offerings on the exchanges.
What's worth noting, according to Linda Blumberg, a senior fellow at The Urban Institute, is that the vast majority of those insured by Obamacare receive a subsidy. As of March 2016, 84.7% of marketplace enrollees, or 9.39 million out of 11.08 million, were receiving premium tax credits, according to Kaiser.
So what does all this mean for consumers given that open enrollment for Obamacare insurance plans for 2017 begins Nov. 1 and ends Jan. 31, 2017? Cynthia Cox, associate director of health reform and private insurance at Kaiser Family Foundation in Washington, D.C., answered our questions by email.
Q: How many people will be affected by Aetna and other insurers dropping or reducing Obamacare insurance?
A: The vast majority of states will have multiple insurers next year. We don’t know with certainty yet, but roughly four or five states could have just one insurer in the whole state. What we are seeing, though, is at the county level and mostly in rural, southern areas. I suspect that about one in four counties are at risk of having just one insurer on the exchange next year. These are largely rural counties, though, so relatively few people will be affected. People who live in more densely populated areas generally have several insurer options on the exchange.
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Q: How will it hit them financially?
A: For the most part, people in this market are getting financial assistance to purchase their coverage, so as long as they have at least one exchange insurer, they can still get subsidies and will be able to continue paying about the same amount for coverage that they are now. People may need to change plans, though, which can be disruptive, particularly for those who are undergoing care and may need to switch doctors.
A new issue has arisen with the Aetna announcement, which is that there could be a county (Pinal County, Ariz.) that has no exchange insurer. If regulators and plans are not able to come to an agreement to cover that area, then the only option for people buying their own insurance there will be to buy it directly from insurers offering outside of the exchange market. People in this county would not be eligible for financial assistance, and since this is a mostly lower-income group of people, insurance probably wouldn’t be affordable without subsidies. If insurance is unaffordable for these folks, which would likely be the case if they don’t have an exchange subsidy, then they won’t be held accountable if they go without coverage and won’t have to pay a penalty. However, they could end up getting sick or in an accident and wouldn’t have coverage to protect them from costly medical bills.
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Q: What are their options?
A: Most people will still have multiple exchange plans to choose from, but they may need to switch insurers if their company is no longer participating on the exchange. If they decide to enroll directly from Aetna off of the exchange, they won’t be eligible for financial assistance. For her part, Blumberg suggested that 64% of those insured by Obamacare would have the same number of health insurance providers in 2017, 24% would have at least four insurers from which to choose, and 10% would have two to three insurers from which to choose.
Q: What other insurers may be considering doing the same thing as Aetna?
A: Humana is another company that has expressed hesitation about continued participation, though we don’t know yet in which states they may or may not participate. We won’t know full information about plan participation until open enrollment starts in early November.
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Q: How can consumers compare health care insurers' ACA plans to find the policy that’s right for them?
A: In my view, the main questions to ask yourself in deciding whether to stay or switch plans are: Can you afford the monthly premium? (Be sure to check how your premium changes in November by re-entering your financial information on Healthcare.gov, as financial assistance can change.) How important is it that you stay with the same doctors? (Check to see whether they are in network in either plan in November.) What prescriptions or procedures do you expect in the next year, and how are those covered in each plan?
Q: What’s the best way to navigate the ACA health care exchanges, and what can consumers expect for 2017 ACA open enrollment season?
A: Going to healthcare.gov is the first step. From there, shoppers will be sent to the appropriate website or can get help in person if they need it. It’s important to go back on the exchange every year and shop for coverage. Even if you are able to and want to stay with the same plan, it is still a good idea to check how much your plan will cost relative to other plans on the market. Just because it was the best option last year does not mean it is necessarily the best option for you this coming year.
Robert Powell is editor of Retirement Weekly, contributes regularly to USA TODAY, The Wall Street Journal and MarketWatch. Got questions about money? Email Bob at rpowell@allthingsretirement.com.