Much of the news has claimed that the Affordable Care Act is a failure because individuals in many counties have few or even no health insurance options. However, how many counties truly will have zero Obamacare exchange insurance options in 2018 ? The Kaiser Family Foundation reports that there are only 17 counties covering 9,595 enrolles where people would have zero insurance options. Of these 17, 14 counties are located in Nevada, 1 in Wisconsin, 1 in Illinois and 1 in Indiana.
The Obamacare Exchanges aren’t the only problem. Even more counties are left with no Medicare Advantage plan choices. While Medicare enrollees can always use traditional Medicare fee-for-service plan, there are many more counties that don’t offer an MA plan. Kaiser Family Foundation again reports that there are 140 counties with no Medicare Advantage plan offered. Most of these counties are located in Wyoming, Utah, Idaho, inland California, and Nebraska. Further, there are no Medicare Advantage plans in Alaska.
Thus, access to plan choice is not only an issue for Obamacare Exchanges but also for Medicare Advantage. Despite this worry, most individuals in densely populated cities have a number of insurance options; many individuals in more rural areas, however, have much fewer health insurance choices.
Could you comment on why ACA and Medicare Advantage plans are offered at the county level? It seems strange that an insurance plan would be offered in one county but not in another that borders it.
Federal law describes how states may set their ratings regions (the community rating mechanism in ACA) with the options being by County, Zip Code (3 Digit), or MSA. The county method is generally the least difficult to parse as most large urban areas fall entirely in one county.
The reason for differences in county offerings by insurers are two fold. Insurers are restrained by network adequacy rules at the state level as well as provisos for mandatory benefits at the federal level (and in some cases at the state level also). In both cases insurers are required to negotiate adequate coverage, county by county, with providers so that both their costs are low enough to remain solvent and their coverage is enough to meet state and federal rules.
In many rural counties there are only a few providers who act as monopolists (or it best oligopolies) and keep prices high relative to more competitive markets. For insurers unable to affordably meet network rules with the mandated condition coverage it is better just to not offer a plan than to risk loosing money.
As an aside, there are also adverse selection issues at play here. While large population in urban counties allow for healthier risk pools, some rural counties only enroll a few hundred individuals in ACA market plans. This means that a single high cost individual can represent the majority of costs in a county. To put that in prospective, one individual with cancer in a county can cost $1,000,000 a year for care. If only 100 individual enroll in coverage who pay $10,000 each a year then this single individual has bankrupted the system before ANY other costs are incurred.
A few other points to consider – according to the Kaiser analysis, in 2017, 21% of enrollees had exactly one choice of insurer. Even in areas with more than one option, we see that many plans restrict cross-state coverage, which can create problems in small/rural states where patients regularly cross state lines for specialized care.
Great point. Thanks for sharing.