USA TODAY, Collin Brennan
As open enrollment starts Tuesday on the Affordable Care Act exchanges, consumers in some parts of the country are bracing for huge rate hikes, while many others are preparing to change insurers and likely doctors.
The crazy quilt of 2017 changes is creating angst among both supporters of the law and consumers under 65 who don’t get their insurance through work. And it comes as enrollment needs a big boost, especially of younger, healthier people to help offset insurers’ costs of covering the sicker people who have signed up so far.
“The way people are experiencing Obamacare varies tremendously across the country,” says Larry Levitt, a senior vice president of the non-partisan Kaiser Family Foundation. “In some states, the market is stable and in other places, it’s a bit of a mess.”
For example, the second lowest cost silver plan — which federal subsidies are based upon — was up 116% in Arizona and down 3% in Indiana. In Indiana, four insurers left the exchange and four remain, while consumers in all but one Arizona county only have one insurer to buy from.
Much of Southwest Florida, a region with uninsured rates above the national average, will have a single insurer from which they can select plans: Florida Blue.
Nearly 93,000 residents of the Gulf Coast counties enrolled in exchange plans during the last enrollment period, according to government figures. About 80,000 of them live in counties with a single provider this time around.
“This year, the vast majority of consumers will qualify for tax credits that help keep coverage affordable, and it’s easier than ever to shop around and compare options,” Health and Human Services Secretary Sylvia M. Burwell said in a statement.
A key point of pride among Obamacare supporters is that about 20 million more people were insured early this year than in 2010 before the law took effect. Federal data out Monday also show, however, that there was no statistically significant difference between the number insured in the first six months of this year compared to the same period last year.
Decisions by insurers including Aetna, UnitedHealthcare, Humana and Blue Cross Blue Shield to leave many states prompted insurance regulators to allow insurers to refile their rate requests, often more than once. That led eight states to approve rates that were often far higher than those originally proposed by insurers.
It’s critical to attract more people into the exchanges to make them “attractive for more insurers,” says Ashish Jha, a physician who is a professor of both health policy and medicine at Harvard.
“We have to fix it one way or another,” says Jha.
Jha favors more generous subsidies to help people afford insurance instead of increasing the tax penalties for not buying it.
“Prices go up and young healthy people opt out,” Jha says, which causes rates to rise, creating a “vicious cycle.”
A “virtuous cycle” is possible too, he says, when prices go down, more people buy health insurance and more insurers come in.
Andy Nebel, who has a Chicago-area video production company, was used to the downsides of health insurance as someone with several preexisting health conditions before the ACA. One plan he bought had a $7,500 deductible per claim.
But now he’s worried insurance companies are taking advantage of people like him with individual insurance. He’s shopping for a new plan because his Aetna plan was eliminated. However, the closest hospital for his only Blue Cross Blue Shield option is nearly two hours away.
“I understand that poor people who get some federal relief will be able to get affordable health insurance, but middle class individuals who want to buy health insurance are being shut out,” says Nebel, who is 53. “What kind of a country is it where I can’t leave and start my own company and and get good health insurance?”
The law shouldn’t allow health plans to “dump sick people on other health plans,” says economist John Goodman, a critic of Obamacare who helped draft an alternative pending in the SenateBut that’s what the narrow networks of hospitals and doctors allow by making their plans “unattractive to people who would have very high health care costs.”
Young healthy people shouldn’t have to bear the burden either, says Goodman. The ACA also decreased the number of levels of underwriting it allows, which forces young people to pay more than many believe they should.
“The federal government created this problem.,” says Goodman, who was the longtime head of the free market National Center for Policy Analysis. “Taxpayers should generally be called upon to solve it, not just a small number of young people in the individual market. “
How 2017 is different:
• Shopping around more important than ever. The Centers for Medicare and Medicaid Services will match people whose insurers are leaving the exchanges to another plan, but consumers will only be officially enrolled if and when they pay their first month’s premium. For those whose insurer is still on the exchange, most who don’t return to Healthcare.gov by December 15 — the deadline for coverage that takes effect on January 1 — will be re-enrolled in their current plan. But shopping around saves money. CMS says if every returning consumer picked the cheapest plan in the same metal level as last year, their average premiums would drop by 20% a month over 2016.
• Rates are often way up. The tax credits more than 80% of people get to pay their premiums will generally keep up with the rate increases, shielding people below 400% of the federal poverty limit — about $97,000 a year for a family of four — from most of the pain. But the people who aren’t eligible for tax credits will be especially hard hit.
• Tax penalties will be at their maximum. Those who weren’t insured in 2016 will have the highest penalties at tax time in April: $695 per adult or a maximum of $2,085 per family or 2.5% of adjusted gross income, whatever’s higher. Some experts recommend that the penalty for remaining uninsured should be higher as it is often cheaper to remain uninsured than to pay the penalty.
In Indiana, more than 68,000 people find themselves starting anew on the marketplace after the departure of their insurers for this year. Four plans, including United Healthcare and IU Health, opted not to offer plans for 2017, leaving only four insurers on the exchange.
Kati Averitt and her family are among those bracing for what the market may bring. Until last year, Averitt, a teacher, and her husband, who works for a small business, had insurance through her employer. Then their infant son arrived and Averitt decided to quit her job and stay at home. Through an insurance agent, the Zionsville, Ind., family found a plan they liked for a monthly premium of just under $900.
Then came the letter from United Healthcare.
“It’s kind of back to the drawing board for us because we don’t have any other options,” Averitt said. “Of course, I’m worried about how much it will be.”
Across the board, Indiana marketplace consumers can expert premiums to increase between 15 to 30%, said Matt Kleymeyer, Indiana market leader for Bernard Health. He cautions his clients not to choose plans based on price alone, if at all possible. Many of the cheaper plans available offer fewer choices when it comes to providers.
But it’s in Arizona – which was once among the country’s most competitive – where consumers are facing the biggest rate increases. But six major health insurers, some citing financial losses accumulated during the first three years of Obamacare, aren’t selling on Healthcare.gov in the state for 2017.
Blue Cross Blue Shield of Arizona’s average rates will increase 51%, while Centene will sell its “Ambetter from Health Net” plans in Maricopa and Pima counties.
The Arizona Department of Insurance, which regulates health insurance companies but does not have the authority under state law to reject rate increases, approved Centene’s final filing to raise rates an average of about 75% next year.
Phoenix resident Ken Hoag is covered by Medicare, but his wife, Margo, is enrolled in a marketplace plan that will be discontinued as of Dec. 31. He logged on Healthcare.gov to use the website’s preview that listed plan details before the Nov. 1 start of enrollment, and he was surprised to find only four plans, all from Ambetter/Health Net.
“There are no choices really for anybody in Maricopa County,” Hoag said. “The lack of choice is like having empty shelves (and) no food in a third-world country. Do I live in Cuba?”
Margo Hoag will choose a silver-level plan that has a similar deductible and out-of-pocket costs to her current coverage. Her monthly premium will increase $50 to $122 after subsidies are calculated.
Although average plan costs are more expensive, insurers expect more Arizona residents will qualify for subsidies.
Arizona had among the lowest subsidy levels in the nation during the first two years of the ACA because the benchmark plans were priced so low. The cost of the benchmark plans will increase substantially in 2017, but the subsidy levels will also increase.
“With the subsidy level going up in Arizona, there will be an opportunity for more people to qualify for subsidies, including people who may not have been eligible in the past,” said Jeff Stelnik, Blue Cross Blue Shield’s senior vice president of strategy, sales and marketing.
Still, middle- and upper-middle income earners who earn more than four times the federal poverty level don’t qualify for subsidies and must pay the entire amount of the higher insurance premiums.
Jon Munson said he now pays nearly $900 month for a Humana plan that covers himself, his wife and two college-age children.
Munson is preparing for a substantial rate hike this year because he earns too much to qualify for subsidized rates.
“I’m bracing for a much higher number,” said Munson, a financial advisor in Scottsdale. “We are a healthy family but I know that you can’t go without health insurance. I need to protect myself and my dependents from (the potential of) a huge hospital bill.”
Whatever happens with the ACA, Jha says he hopes it doesn’t lead to an abandonment of the Obama administration’s commitment to those who couldn’t afford insurance before the law.
“We’re too wealthy of a country to not cover the poor,” he says.
Tell us your healthcare experiences at firstname.lastname@example.org
Contributing: Frank Gluck, (Fort Myers) News-Press