Nearly a third of U.S. counties likely limited to a single exchange insurer in 2017

A preliminary analysis of insurer participation on the Affordable Care Act’s insurance exchanges said that 31 percent of counties in the U.S. are likely to have a single insurer marketplace in 2017.

The Kaiser Family Foundation study said 974 counties could be limited to a single insurer’s plans for exchange customers, up from 225 in 2016. About 60 percent of counties could have two or fewer marketplace insurers.

When broken down by the number of customers, however, 62 percent of enrollees will have at least three insurers to choose from. This would still represent a reduction in marketplace choices, because in 2016, 85 percent of enrollees could pick from three or more insurers. Some 19 percent of enrollees would be limited to two insurer choices (up from 12 percent in 2016), while another 19 percent would have just one insurer to pick from (up from 2 percent).

Study authors Cynthia Cox, associate director for KFF’s Program for the Study of Health Reform and Private Insurance, and research assistant Ashley Semanskee cautioned it’s too soon to tell exactly what marketplace customers’ choices will be when open enrollment begins.  

“Much is still unknown and the majority of states’ 2017 filings are either redacted or unavailable publicly,” the authors wrote. “Because only premium changes, and not new entrant premiums, are posted on Healthcare.gov’s rate review site, it is also likely that more is known at this time of market exits than is known of entrants. Complete information on insurer participation and premiums across all states does not typically become public until shortly before the beginning of the open enrollment season.”

The impact of major insurers like UnitedHealth, Aetna and Humana scaling back their participation will be most pronounced in rural areas. The study said about 41 percent of all enrollees in rural counties will likely be limited to a single insurer’s plans in 2017, up from 7 percent in 2016. About 15 percent of all enrollees in mostly urban counties—about 1.7 million people—could have a single marketplace insurer.

Certain states are more likely to see reduced choices. Four new states could have a single marketplace insurer in all counties, with Alabama, Alaska, Oklahoma and South Carolina joining Wyoming, where enrollees were already limited to just one insurer. Several other states are likely to have a majority of counties with a single insurer, like Arizona (87 percent of counties in 2017, compared to none in 2016), Mississippi (80 percent vs. none), Missouri (85 percent vs. 2 percent), Florida (73 percent vs. none) North Carolina (90 percent vs. 23 percent) and Tennessee (60 percent vs. none).

The long-term effects of these reduced choices is still a matter of debate among healthcare economists and policy experts. UCLA Center for Health Policy Research Director Gerald Kominski, PhD, told HealthExec in June the departures of major insurers were political maneuvers to pressure Congress to extend the ACA’s subsidies for insurance companies. Princeton health economist Uwe Reinhardt, PhD, had a different take, saying the exits signal a  “mild version” of the death spiral of the ACA marketplace.