Since its inception, Obamacare has been an area of contention with equally passionate supporters and opponents, and with a new administration in office, there have been numerous attempts to dismantle the program, which have all been unsuccessful. Adding to the uncertainty is the mass exodus of insurance carriers from the program, threatening to leave many across the country with no choices in the marketplace.
When the Affordable Care Act began, the intention was to provide a pool of carriers for the insured to choose from which would drive competition, keep the rates competitive, and give the consumer options. Unfortunately, the market continues to get narrower. Current numbers show that nearly half the counties (48%) across the United States will have only one option for a plan under the Affordable Care Act. In some aspects, those numbers have improved from initial projections. Earlier predictions coming from the Centers for Medicare & Medicaid Services, the agency in charge of managing Obamacare, estimated a potential of 49 counties without any carriers participating in the plan at all for 2018. However, initial estimates also did not predict that there would be such a large number of counties that only have one available option. No matter which way you look at it, these numbers certainly not reassuring or indicative of a healthy, recovering system.
Carriers have been dropping from Obamacare left and right this year. Among those carriers, there were three that made the largest impact. The first was UnitedHealth, who to cut their financial losses, had been slowly withdrawing from states since 2016. Due to the financial gains, they saw from ending the programs in some states, they decided to opt out of all states for 2018.
Aetna decided to make a similar move after searing profit recovering from the Obamacare participation reduction in 2017. They also cited the program’s instability as the reason for their withdrawal. However, Aetna did say they would reconsider a return to the program if it were more stable.
The third carrier that shook the marketplace with its announced withdrawal was Humana who faced the same woes as other carriers in the program. Their business model could no longer sustain the amount of financial risk that participating in Obamacare involved. They realized this shortly after the enrollment period for 2017 ended and announced quickly after that their plans to depart.
If you were to ask what the cause of this trend in carriers abandoning Obamacare is, you would likely get two different answers depending on who you asked. Opponents of Obamacare argue that the mass exodus of insurance carriers is just another reason that the Affordable Care Act has failed. They interpret the carriers leaving as indicative of a flawed plan. However, proponents of Obamacare blame President Trump and his administration’s attack on the act as the reason for the carriers’ withdrawals. The argument is that carriers are not as likely to remain in the program if the president is not supportive of it. There is also the fact that the current attempts to appeal the Affordable Care Act leave the insurance companies unsure of where they will stand when the dust settles.
According to the insurance companies themselves, the main reason they are withdrawing from the program is due to the high cost of losses they have suffered. The pool of customers currently enrolled in Obamacare seems to be sicker than anticipated with the bills adding up to significantly higher amounts than the premiums insurance companies have been charging. If the Trump administration removes the individual mandate requiring that everyone buy insurance, there will be even less healthy people in the insurance pool to help even out the bill to premium ratio.
The Fate of Obamacare
Many experts believe the future of Obamacare looks dismal, but a recent attempt to repeal and replace the bill failed to gain support amongst the Republican Party. Senator Susan Collins (from Maine) put the last nail in the coffin on September 26, 2017, saying she couldn’t support the replacement bill because it would result in a large funding cut to the Medicaid program. So, it appears Obamacare is here to stay for the time being.
The health insurance landscape is extremely complex, especially with these constant headlines spewing terms and facts that the general public can’t comprehend. If you’re looking for a plan, keep in mind that we offer some great choices, so give us a call at 1-844-699-6873 today.