Affordable Care Act
Last year, the federal government encouraged returning Obamacare customers to shop around for a better deal. This year, a lot of people will have no choice.
In markets throughout the country, the plan in the most popular category that was least expensive this year will not be offered next year. That means that the people who did shop again, will also have to shop again this year, even if they are happy with their plan.
There are 499 markets for Obamacare plans in the United States. In 89 of them, the insurance company that offered this year’s best deal in the “silver” category will not be returning for 2016. Most of those exits are a result of insurance co-op plans that failed. A few exits came as insurers that are still operating elsewhere decided to leave particular markets. People in these canceled plans can’t simply renew their current policy if they like it — they have to go back into the marketplace and find a new insurer.
The numbers come from an analysis from the McKinsey Center for U.S. Health System Reform, which did the work of examining all the plans and matching 2015 products with 2016 offerings.
(Read more: The New York Times, Kaiser Family Foundation)
UnitedHealth Group Inc. said it expects major losses on its business through the Affordable Care Act’s exchanges and will consider withdrawing from them, in the most prominent signal so far of health insurers’ struggles with the health law’s marketplaces.
Only a month ago, United sounded more optimistic about business on the exchanges. But in its unexpected disclosure Thursday, the insurer said it would cut its earnings forecast and projected hundreds of millions in losses stemming from the policies it sells through the health law’s marketplaces.
The turnaround led some analysts to ask the insurer what had changed.
Stephen Hemsley, UnitedHealth chief executive officer, said too many healthy people dropped coverage and noted slower than expected enrollment. A major factor, he added, was far higher costs for those who signed up for 2015 coverage under special exemptions after the general open enrollment period ended. Those exemptions included, for example, people who lost their insurance, moved or suffered a hardship, such as an eviction or had their utilities turned off. United said it did not see a similar increase in costs for people who bought policies from private brokers or websites instead of the government marketplaces after open enrollment, suggesting the reason was partly that the company’s eligibility assessments were more thorough.
Earlier this month, HHS Secretary Sylvia Burwell said the administration is exploring ways it might be able to help make those payments, although such a move comes too late to save many of the dozen insurance cooperatives that have announced they will pull out of the market in January. The less-than-anticipated payments are often cited as a main factor in the co-ops demise.
(Read more: StarTribune, The Wall Street Journal, Kaiser Health News)