Insurers Dropping Out of ACA Exchanges Could Limit Choice, Increase Costs

Source: Health Policy Institute of Ohio

Aetna’s announcement that it will no longer offer plans in most Affordable Care Act (ACA) exchanges it had previously served is the latest in a string of defections by big insurers that will limit customer choice in many markets (Source: “Insurers Continue to Abandon ACA Exchanges, Limiting Choice,” Associated Press, August 16, 2016).

Dwindling insurer participation is becoming a concern, especially for rural markets, in part because competition is supposed to help control insurance price hikes, and many carriers have already announced plans to seek increases of around 10% or more for 2017.

“This is really going to be felt in Southern states and rural areas,” said Cynthia Cox, associate director of health reform and private insurance for the Kaiser Family Foundation, which studies health care issues.

Experts say it is too soon to determine how shrinking insurer participation will affect rates beyond next year, but fewer choices generally contribute to higher prices over time.

Aetna, the nation’s third-largest insurer, says it will limit its participation in the exchanges to four states in 2017, down from 15 this year. Aetna’s announcement came several weeks after UnitedHealth and Humana also said they would cut their coverage plans for 2017 and after more than a dozen nonprofit insurance co-ops have shut down in the past couple of years.

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