UnitedHealth
Group and
Humana are bailing on
multiple exchanges that sell individual health insurance, and more than half of
the not-for-profit co-ops have closed up shop. But other companies are
willingly, and quietly, taking their place.
The loss of insurance
carriers, many of which have been
burned
by adverse selection, is problematic for the Affordable Care Act and
especially for consumers who live in rural counties and states like Alabama and
Alaska, where there is only one option for exchange coverage next
year.
Yet many insurers have signaled their intent to expand their
exchange operations, and new companies will roll out in areas that have lost
competition. While exits have garnered more attention, healthcare experts say
the addition and expansion of other insurers shows how the marketplaces are
still in their formative years.
“You can't start an insurance company
from your garage,” said Deep Banerjee, a healthcare director at ratings agency
Standard & Poor's. “The process is slowly seeing new entrances, but clearly
you are seeing it because it's a more viable market” than before the
ACA.
Aetna and Medica intend to sell individual plans in the
Kansas
exchange for 2017, along with Blue Cross and Blue Shield of Kansas and Blue
Cross and Blue Shield of Kansas City (which sells plans in only two counties).
Kansas is one of the two dozen states in which
UnitedHealth
is exiting. Aetna and Medica aren't obligated to be on the Kansas exchange
until binding agreements are signed by September.
Wellmark Blue Cross and
Blue Shield also will start selling health plans on Iowa's exchange during the
2017 open-enrollment period after sitting out the
first
few years. Iowa's not-for-profit co-op,
CoOportunity
Health, folded in 2015. Wellmark will offer limited networks of hospitals
and doctors, a common thread among exchange plans that some consumers have
viewed
unfavorably.
A spokeswoman for Bright Health, a new
startup
insurer, confirmed Monday that the carrier will sell individual exchange
plans in Colorado next year. The Colorado Division of Insurance controversially
forced the state's lone not-for-profit co-op to
shut
down at the end of last year.
Canopy Health Insurance, another new
company, anticipates
selling
ACA coverage in Nevada and Wyoming, two states that have struggled with
exchange competition. Canopy, formerly known as Melody Health Insurance, was
founded by health plan information technology executives and recently added
former co-op executives to its payroll.
Even though the individual market
has had costly enrollees and is much smaller than the employer market, where
150
million Americans obtain their health coverage, many insurers have continued
to show a willingness to try the exchanges considering the large amount of
federal support.
“This is a huge opportunity,” Bob Sheehy, Bright
Health's CEO and the former top executive at UnitedHealthcare,
told
Modern Healthcare in April. “The individual health insurance market is a
growing marketplace. I think there's a real need for this.”
Leaving the
entire individual market has serious repercussions for insurers that already
sell exchange plans. Federal law bars insurers from re-entering the marketplaces
for
five
years, assuming they discontinue all types of individual policies. That
incentivizes plans to stay in and compete for market share, especially if they
already went through the trouble of getting regulatory approval and building
capital reserves and provider networks.
“Competition will change year
over year,” S&P's Banerjee said.