By Kelvin Chan, Jeremy Krinsley, Abe Rubenstein, and Cecilia Watt
Health exchanges, established in 2013 under the Affordable Care Act (ACA) and popularly known as Obamacare, help individuals purchase health insurance plans from a central, state-managed, marketplace. This is particularly beneficial for individuals who are self-employed or don't receive insurance from their employer. But beyond such conveniences, ACA exchanges are also meant to promote healthy competition between health insurance companies. Individuals, by having the ability to compare and contrast health plans, should encourage insurers to be competitive.
But health exchanges are in danger of being less competitive than ever. Recently, the Department of Justice blocked the mega-mergers of Aetna-Humana and Cigna-Anthem. In response, Aetna announced its 2017 exit from the health exchanges of multiple states. UnitedHealth Group and Humana, too, have already made similar announcements earlier this year. Essentially, three of the country's top five insurance companies could soon be exiting the exchanges.
The impact could be immense. We calculated that the impact of the announced exits of Aetna, UnitedHealth Group, and Humana in 2017 could put over 400 U.S. counties at risk of having access only one health insurer or fewer (explore the data here). Furthermore, we project that the average U.S. county would have access to 3.3 insurers in 2017, 18% less than the 4.0 average in 2016. Any one insurer leaving may not only reduce competition, but also drastically weaken people's abilities to access and buy affordable insurance plans.
The impact is likely to hurt some states more than others. Alabama, for example, could lose two-thirds of the available health insurance plans in 2017. 134 out of its current 201 plans will vanish after UnitedHealth Group, Humana, and Aetna make their planned exits, leaving only one provider—Blue Cross and Blue Shield (BCBS) of Alabama. And even so, the insurance company plans to drastically hike rates for 2017. Similarly, Florida, Georgia, and Missouri could lose at least 40 percent of their exchange options.
Measures of poverty shine another light on the scale of this shift. On average, the counties experiencing a drop of 40 percent or more in insurer exits are also 20 percent poorer than the national average. [Keep an eye out for a future Enigma visualization overlaying economic indicators and our map of health exchanges].
Lack of competition among health insurers jeopardizes one of the main tenets of ACA exchanges. When one insurer dominates healthcare access for an entire county (let alone state), significant price hikes as was seen with BCBS Alabama and poorer quality of services could lay on the horizon. Furthermore, although Enigma has only captured the exits of top health insurers, additional exits have been surfacing at local levels, leaving counties like Pinal in Arizona at risk with no insurance at all.
We invite our readers to explore the U.S. counties in the map below to visualize the extent to which these mega-insurer exits threaten not only the future of Obamacare, but your access to healthcare.
2017 Projection of Healthcare Exchange Options by County