In 2016, there were 287 insurers who offered insurance on the Obamacare exchanges and in 2017 that number dropped to 218. There were 34 states that saw the number of insurers decline, 15 states have the same amount of insurers from 2016 to 2017 and only one state added an insurer in 2017.
In one-third of counties in the United States, about one in five enrollees, or 21 percent, have access to only one insurer operating on the exchanges. This is a significant increase from the 2 percent of enrollees in 7 percent of counties that had access to only one insurer last year.
“In 2017, insurance company losses led to a number of high profile exits from the market,” the study explains. “In 2017, 58% of enrollees (living in about 30% of counties) had a choice of three or more insurers, compared to 85% of enrollees (living in about 63% of counties) in 2016.”
As larger commercial insurers such as Aetna and United Healthcare have dropped out of Obamacare, many areas will only have regional insurers to choose from, said Ed Haislmaier, an expert in health care policy at the Heritage Foundation.
“The reality is that the individual market even pre-Obamacare was a very small part of their business,” said Haislmaier. “So those companies have basically dropped out and what that leaves are a couple of companies with broader footprints but not more than about 10 or 12 states.”
“What you’re down to is basically in most cases your dominant Blue Cross plan and then depending on the size and location you may have regional players and by regional it could mean either across two or more states or just within a state,” he said.
Haislmaier and the Heritage Foundation, who originally created the methodology for this type of study earlier this year, said that the ‘Affordable’ Care Act has left consumers with less competition and choice than ever before.
“One of the stated aims of the ‘Affordable’ Care Act was to increase competition among health insurance companies,” said Haislmaier.
“That goal has not been realized, and by several different measures the ACA’s exchanges offer less competition and choice in 2017 than ever before. Now in the fourth year of operation, the exchanges continue to be far less competitive than the individual health insurance market was before the ACA’s implementation.”
“The Obamacare death spiral is continuing,” she said. “As rates rise, healthy people drop out and the share of sick people rise, causing further increases in rates. Since these rates are capped then the insurance business becomes less profitable and companies leave the business.”