Major Insurers Pull Back From Obamacare — My 2¢

On Thursday, August 18 2016, Diane Rehm aired her show on National Public Radio entitled Major Insurers Pull Back From Obamacare. Her guests consisted of a healthcare reporter from the WSJ, a scholar with the American Enterprise Institute, the executive director of Families USA, and an author/reporter for Kaiser Health News.

This panel was assembled in the wake of Aetna Health announcing its exit from the Federal Health Exchange for plan year 2017. Prior to this announcement, UnitedHealthcare released its intention of also forgoing participation on the Federal Health Exchange. So regarding the major carriers for the state of Texas that leaves BlueCross BlueShield, Cigna and Baylor Scott & White. BlueCross BlueShield has been and will continue to offer only HMO plans on the individual market, characterizing their participation on the Exchange as limited. Cigna continues to have an attractive individual product and Baylor Scott & White has additional alternatives for a particular market segment. Needless to say, Open Enrollment 2017, which begins on November 1, 2016, will have limited options regarding the individual health market. A full list of participating carriers, plans and rates will be available towards the end of October as plans and rates are negotiated and finalized with the state.

Back to Diane Rehm and the main question of 8/18’s show, why is UnitedHealthcare and specifically Aetna exiting the Federal Health Exchange, or as she called it, Obamacare? The short answer, money. Collectively the major carriers have lost billionsparticipation in the healthcare exchange created by the Affordable Care Act. That’s the simple answer, but of course this is far from simple. I could delve into the minutia of the more than eleven million words of the Affordable Care Act, but I won’t, because all you want to know is how this affects you. And here’s how:

If you now have or will have employer provided health coverage in 2017, you will likely have a good plan with access to a robust network. When I wrote earlier that the carriers have lost billions on the Federal Health Exchange, I neglected to mention that they’re also turning a profit on the group health side of their business. So don’t feel too bad for them. Note, there’s no runaway profiteering going on either, we still have the Medical Loss Ratio rule in place that requires insurance companies to spend at least 80% of all premium dollars on medical care for their members.

If you are a business owner (small business defined as having 2–50 employees), your options continue to look good for 2017. In most cases the Fully-Insured option for health coverage will suffice. For those groups with 10 or more employees, level-funding or self-insured options also exist.

That leaves those with no access to group health coverage. Whether you’re self-employed, newly graduated, in-between employment, or your employer doesn’t offer group health coverage, federal law still requires you have health insurance for the year. You can secure coverage through the Federal Health Exchange, with or without a subsidy. I recommend doing so with an independent agent such as myself. The Federal Navigators, with a 30-hour minimum training course, can only review the available health plans with you. State licensed independent agents with years of experience (14 years in my case) can describe in detail, recommend and secure plans suited to your specific needs.

As for acquiring coverage outside the Federal Exchange with no subsidy (currently the majority of my individual clients), as of this writing there are limited options. Unfortunately as mentioned earlier, we will not know which carriers will be available and what the rates look like for 2017 until the end of this October. I’ll keep you posted.