Individual Health Care Marketplace Faces Serious Hurdles

There is good news and bad news on the individual health care front. Today it’s much more difficult for individuals in certain parts of the country to purchase federally subsidized health care coverage on the Affordable Care Act (ACA) marketplaces. Many major insurance companies, such as United- Health Group, Humana and Aetna — tired of operating at a loss — have announced their intention to pull out of the marketplaces. Another provider, Anthem, plans to leave the Ohio marketplace in 2018.

Observers worry that without choices, lower-income individuals will be faced with higher health plan costs or no coverage at all. The ACA set up the marketplaces so individuals who don’t have access to employer sponsored health coverage could get easy access to insurance – and in many cases subsidized insurance. Subsidies are available to people who earn less than 400 percent of the poverty level, which is about $48,240 for an individual and $98,400 for a family of four. Insurers, however, have found that many of the regulations affecting ACA-compliant coverage often is too expensive for them to operate at a profit. In November 2016, the Kaiser Family Foundation reported that 32 percent of U.S. counties only have one insurer available for residents looking to buy subsidized health insurance through the ACA online marketplace.

In several states, including Alabama, Alaska, Oklahoma, South Carolina and Wyoming, there’s only one participating insurance provider in each state’s online marketplace in 2017. Just a few months earlier in those states, only seven percent of counties — and the entire state of Wyoming — were limited to one insurance provider on the online exchanges. Worse yet, the New York Times estimates that as many as 45 counties could have no insurance carriers available in 2018. In short, of the approximately 9.2 million people enrolled in Affordable Care Act exchanges in 2017, about 1.9 million can only purchase insurance from one company.

They do have the ability to purchase coverage outside of the marketplace, but they won’t have the ability to apply for federal subsidies to help with the cost. The price of an average plan on the exchange already has risen substantially since 2014. The U.S. Department of Health and Human Services reports that a family of four, with a household income of $60,000, paid 38 percent more in premiums on the second lowest- cost Silver plan. Costs could continue to rise, since some insurers are threatening to leave the Marketplace unless they get double- digit premium increases.

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