Obamacare receives a big, fat 'F' from physicians
Despite the apparent success of the exchanges, however, they have experienced problems. The launch of the federal exchange was marred by computer problems that undermined early enrollment, and some states completely botched the rollout of their exchanges. Oregon, for example, failed to launch an online enrollment portal for its Cover Oregon exchange in a timely manner.
Though coverage is now more available because of the exchanges, affordability remains a problem for some. Premiums on the exchanges increased more in 2016 than in 2015, with policies for the lowest and second-lowest cost silver plans running on average 4.4% higher, according to the Kaiser Family Foundation. Due to these higher rates, many people are opting for plans with high deductibles and high copays in order to avoid paying higher monthly premiums.
“There is a tradeoff,” De La Torre says. “People are looking for the cheapest plans and prices, and they’re limited in what they get for that, and it means more out-of-pocket expenses.” Additionally, many of those who have bought coverage through the exchanges had a greater need for medical care, but this hasn’t been counterbalanced with healthy enrollees, some of whom have chosen instead to pay a penalty for going without healthcare insurance.
“Basically what the exchanges attracted was 100% of the sick people and a smaller percent of the healthy people,” Rust says. To address this imbalance, the ACA authorized risk corridors to help stabilize costs for insurers by offsetting high losses and sharing in large profits, but these will end at the end of 2016.
Further reading: 2016 GOP platform calls for Obamacare repeal, reform Medicare
This preference for lower premiums, the disproportionate percentage of unhealthy participants and the looming end of the risk corridor program have had a cumulative effect, and insurance companies have felt the pinch. For companies like UnitedHealth, Aetna and Humana, participating in the state exchanges provided an opportunity to remain competitive with rival companies, but it’s come at a cost. “They’re trying to balance the need to compete effectively with other insurers by price or premium while at the same time comply with the mandate of the law that covers a pretty robust basket of services,” Lo Sasso says.
In April, UnitedHealth, the largest health insurer in the country, announced that it plans to drop coverage in most state exchanges by 2017, citing small markets and substantial risks that resulted in a $475 million loss on ACA exchange policies in 2015 and a projected $500 million loss this year. While 145,000 people currently enrolled with UnitedHealth will need to change insurance providers, they represent a small percentage of Americans insured through the exchanges.
For its part, the government appears unconcerned: “As with any new market, we expect changes and adjustments in the early years with issuers both entering and exiting states,” said Benjamin Wakana, a spokesperson for the U.S. Department of Health and Human Services (HHS) in an emailed response to the announcement.
When employers are deciding what insurance plans to offer their employees, Rust says, they often choose plans with larger networks because they have to please a large number of employees. However, when individuals are choosing their own plans, they’re more likely to consider the balance between coverage options and cost, and “it becomes much easier to offer a narrow network at a less expensive price and let the consumer decide,” he says.
According to the consulting firm PricewaterhouseCoopers, many exchange plans have narrower provider networks with more limited options for healthcare providers and facilities than employer-provided plans, but employer interest in narrow networks is increasing as well. Limited networks include PPOs (preferred provider organizations) and health maintenance organizations (HMOs), both of which can be effective in reducing premium costs. PPOs limit networks to providers willing to accept reduced rates set by the plan, while HMOs use a dedicated provider network to manage care and reduce costs.