Coverage: Health insurance signees less than expected

Enrollment in the insurance exchanges that were a key part of President Barack Obama’s health care reform has been less than expected, causing some insurers to drop out of markets.

Carolyn Y. Johnson of The Washington Post has the news:

As a result, the administration’s promise of a menu of health-plan choices has been replaced by a grim, though preliminary, forecast: Next year, more than 1 in 4 counties are at risk of having a single insurer on its exchange, said Cynthia Cox, who studies health reform for the Kaiser Family Foundation.

Debate over how perilous the predicament is for the Affordable Care Act, commonly called Obamacare, is nearly as partisan as the divide over the law itself. But at the root of the problem is this: The success of the law depends fundamentally on the exchanges being profitable for insurers — and that requires more people to sign up.

In February 2013, the Congressional Budget Office predicted that 24 million people would buy health coverage through the federally and state-operated online exchanges by this year. Just 11.1 million people were signed up as of late March.

Exchanges are marketplaces where people who do not receive health benefits through a job can buy private insurance, often with government subsidies.

John Quelch and Emily Boudreau of Fortune question whether Obamacare can be saved:

In 2015, there was an average of 6.9 plans to choose from in each state. This fell to 6.5 in 2016, and even before Aetna’s decision, the Kaiser Family Foundation projected that this would drop to 5.8 per state in 2017.

The issue is that healthy individuals tend to sign up for cheaper individual plans, while those who are sicker tend to select the pricier plans with better coverage. Unfortunately, there aren’t enough healthy individuals selecting the pricier plans, meaning that premiums are rising. According to Kaiser, health insurance premiums for the average plan are expected to rise by 9 percent in 2017.

Aetna’s decision prompted commentary from both sides of the political spectrum. Republicans see it as proof that the public exchanges simply won’t work, while it has galvanized some Democrats to double down on calls for a single-payer system. Few national politicians are working to uncover why the public exchanges aren’t working for either insurers or consumers.

While it’s difficult, the question everyone should be working to answer is: How can the system produce an adequate level of choice for consumers and financial stability for insurers?

Rachana Pradhan and Paul Demko of Politico explore how the issue is affecting Senate races:

In nine of 11 states with competitive Senate races, at least one insurer seeks to hike rates for Obamacare customers by at least 30 percent next year: Highmark Blue Cross Blue Shield in Pennsylvania wants to jack up average premiums by more than 40 percent. In Wisconsin, three insurers have asked for rate hikes of more than 30 percent. In New Hampshire, two of the five carriers want to sell plans with rate increase above 30 percent.

The potential sticker shock — coupled with the likelihood many consumers will have fewer choices next year after major insurers scale back their exchange participation — creates a potential political opening for Republican candidates, especially since the next Obamacare enrollment season starts one week before Election Day.

“People who are feeling it in their pocketbooks are going to be very unhappy about [rate hikes],” said Brian Walsh, a former communications director for the National Republican Senatorial Committee. “You would expect to see this will be part of the campaign messaging for House and Senate Republicans. … If it hasn’t started, it will be coming.”