Uncertainty Continues to Plague Individual Health Insurance Market

The Centers for Medicare & Medicaid Services (CMS) has released a map of 2018 projected Health Insurance Exchanges participation based on the known issuer participation public announcements through June 9, 2017. This map shows that insurance options on the Exchanges continue to disappear. Plan options are down from last year and, in some areas, individuals will have no coverage options on the Exchanges, based on the current data.

The CMS map displays point in time data and is expected to fluctuate as insurers continue to make announcements on exiting or entering specific states and counties. It currently shows that nationwide 47 counties are projected to have no insurers, meaning that individuals in these counties could be without coverage on the Exchanges for 2018. It’s also projected that as many as 1,200 counties—nearly 40 percent of counties nationwide—could have only one insurer in 2018.

Currently, for 2018 at least 35,000 active Exchange participants live in the counties projected to be without coverage in 2018, and roughly 2.4 million Exchange participants are projected to have one issuer. It’s expected that the number of consumers with no coverage choices will rise.

CMS continues to work with State Departments of Insurance and issuers to address bare counties, exploring all options available under current law to provide Americans with access to coverage.

June 21, 2017 was the deadline for insurers to submit proposed plans and rates for 2018. Insurers then have until August 16, 2017 to make changes to the plans and rates.

Insurers are either withdrawing from the individual health insurance market or raising premiums because of the uncertainties surrounding health insurance. Potential Congressional action has gained much attention and that is a major element of the uncertainty, particularly with regard to whether or not there will continue to be penalties for individuals who do not have health insurance.

Some experts have said that the lack of a penalty is prompting health insurers to increase premiums by 20 percent. Even if Congress fails to act, there has been speculation that the Trump Administration will not enforce the individual mandate penalty.

Another major element of uncertainty has to do with cost-sharing reductions. The Affordable Care Act (ACA) requires insurance companies offering coverage on Exchanges to reduce cost-sharing provisions for enrollees in silver plans who have incomes of 250 percent of the Federal poverty level or less.

The Republican-controlled House of Representatives sued the Obama Administration in a case originally known as House v. Burwell, claiming that the funds to reimburse insurers for these cost-sharing reductions had not been properly appropriated. A district court agreed with the House, but stayed its order pending appeal. The Obama Administration appealed.

After the election, the House asked for a delay to give the Trump Administration time to develop a position in the case now known as House v. Price. The Trump Administration has yet to take a position on the case and the President has made contradictory statements on the subject.

The House and the Trump Administration have now asked for additional time, which will presumably postpone the case until after the deadline for insurance companies to finalize rates for 2018. Experts have estimated that insurance companies will need an additional 19 percent in their rates if they are not reimbursed for cost-sharing reductions.

Some States have instructed insurers to assume no reimbursement for cost-sharing reductions when filing their rates, others have instructed insurers to assume there will be reimbursements and others have asked insurers to submit two sets of rates, while still others have given insurance companies no guidance.

The National Association of Insurance Commissioners, America’s Health Insurance Plans, the Blue Cross Blue Shield Association, the American Hospital Association, the American Medical Association, the United States Chamber of Commerce and governors have asked the Trump Administration for assurances that reimbursement for the cost-sharing reductions will be continued in order to promote market stability.

Another area of uncertainty has to do with whether or not the Trump Administration will encourage people to enroll for health insurance. The more people (particularly younger, healthier people) who are in the insurance market, the more stability the market will have. The Obama Administration was making a big effort to get people enrolled and was on track for record enrollment for 2017; however, the Trump Administration withdrew advertising urging people to enroll before the January 31 deadline. Because many people wait until the last minute to enroll, enrollments dropped significantly once the advertising stopped.


About John Garner

John Garner has over thirty five years of experience in employee benefits. He specializes in compliance, health care reform, the Health Insurance Portability and Accountability Act (HIPAA), the Consolidated Omnibus Budget Reconciliation Act (COBRA), and the Employee Retirement Income Security Act (ERISA). He helps clients with life, health, and disability benefits, cost containment, flexible benefits, and claim consulting.

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