Dive Brief:
- After Aetna's recent decision to cut back its planned marketplace participation for 2017, following similar moves by insurers including UnitedHealth, healthcare consulting firm Avalere produced an analysis of what the insurer cutbacks and co-op closures are set to mean for competition in next year's exchanges.
- Based on currently available data, Avalere confirmed that a sharp decline in choice is likely in 2017, with 36% of rating regions having only one (or even zero) companies offering plans, as well as some some sub-region counties with no plans.
- Due to ongoing market flux, the study does have some limitations that may cause it to over or under-estimate next year's participation, the researchers noted, including that it does not factor in expected exits from individual counties or rating regions, and it does not account for potential new market entrants or expansions.
Dive Insight:
With so many insurers dropping out of several ACA exchanges due to substantial financial losses, CMS has taken some steps to stabilize the markets such a request for information on patient-steering concerns.
More than half (55%) of rating regions may have two or fewer carriers in 2017, Avelere's analysis found. The projections were made by calculating next year's competition levels by comparing current carriers' 2016 participation to the reduced levels some have announced for 2017, including Aetna, Humana, UnitedHealth, and some co-ops.
In contrast to the 36% of rating regions predicted to have only one or fewer companies offering plans next year, Avalere found that in 2016, only 4% of rating regions had one or fewer. The firm concluded that seven states (AK, AL, KS, NC, OK, SC, WY) will have just one carrier per rating region in each rating region in the state in 2017.
"While this analysis assumes no new plans enter the market, consumer choice could improve if carriers decide to expand exchange participation," the researchers noted.
For improving competition levels, Avalere's analysis included a state-by-state breakdown and advice to the federal government including, enhanced risk mitigation programs, tightening of enrollment rules to reduce adverse selection, enhanced outreach and incentives for enrollment, and new market rules or expanded eligibility into other public programs like Medicare and Medicaid.