One-third of ACA exchanges will lack competition in 2017

By Maria Castellucci
August 23, 2016 - Modern Healthcare

Nearly 36% of the Affordable Care Act's exchanges will have only one participating health insurer in 2017, up dramatically from 4% reported this year, according to a recent analysis.

The report, conducted by consulting firm Avalere, compared insurers in ACA exchanges in 2016 to companies that expect to offer plans in 2017, accounting for companies that have publicly announced their intentions to scale back or exit the exchanges including Aetna, Humana and UnitedHealth Group.

The report also found that about 19% of the ACA's exchanges may have two carriers in 2017, compared with 29% this year. Approximately 45% of markets will have more than three insurers in 2017, compared with 67% in 2016.

“Depending on where consumers live, their choice of insurance plans may decrease for 2017,” said Elizabeth Carpenter, senior vice president at Avalere. “Some exchange enrollees may need to choose another insurance plan in order to maintain coverage.”

Avalere found that seven states will only have one insurer in each of their ACA markets in 2017. The states are Alaska, Alabama, Kansas, North Carolina, Oklahoma, South Carolina and Wyoming.

Alaska and Wyoming will each offer an estimated three ACA exchange markets under one carrier, the report notes. Oklahoma will offer five, Kansas will offer seven, Alabama will offer 13, North Carolina will offer 16 and South Carolina will offer 46.

Avalere suggested improving risk-mitigation programs and changing enrollment rules to curb the impact of low competition in the markets.

In recent months, large insurers have announced plans to pull out from their ACA marketplaces as they experience losses. Earlier this month, insurance giant Aetna announced it would drastically cut back from individual markets on the ACA's exchanges. It has lost more than $300 million on the exchanges so far this year.

Humana said it would pull out of eight individual markets in 2017, selling plans in only 11 states. The reduction will result in health plans offered in less than 156 counties, compared to 1,351 this year.

UnitedHealth has also said it will pull out of most exchanges. It has lost about $1.3 billion in 2015 and 2016 from the new marketplaces.