As a rising number of insurance carriers pull out of state and federal Affordable Care Act exchanges, regulators are growing bolder in voicing their concerns about the law.
In conversation with The Tennessean,
state Insurance Commissioner Julie Mix McPeak told the newspaper Tennessee’s public health insurance exchange is “very near collapse,” with just one insurer selling plans statewide.
“I would characterize the exchange market in Tennessee as very near collapse…and that all of our efforts are really focused on making sure we have as many writers in the areas as possible,” McPeak said. “I’m doing everything I can to prevent a situation where that turns to zero.”
Currently, BlueCross BlueShield of Tennessee is the only company willing to offer plans to all counties – an excellent illustration of a Kaiser Family Foundation projection estimating that more than one in four counties in the country is at risk of having a single insurer on its exchange.
Along with Tennessee, four other states are expected to have just one carrier on the 2017 Obamacare exchanges, and consumers in most counties in nine other states won’t have competition for their exchange business either.
The root cause of insurers’ flight, of course, is the major losses they have sustained while participating in the exchanges. BlueCross BlueShield of Tennessee, for example, estimates that by the end of the year, it will have lost close to $500 million during its three years offering plans in the state.
Those balance sheet red marks have led a rising number of companies including Aetna, UnitedHealthcare and many smaller insurers and cooperatives to either leave the exchanges or close their doors. Analysts have suggested that instead of transforming the country’s insurance markets, as was its original purpose, the Affordable Care Act will instead function as a solution for a predominantly sick and low-income population.
Others have gone further, submitting that ACA supporters never wanted the law to succeed and instead saw it as an avenue for opening up a public option or even a single-payer healthcare system.
“I think those that favor a public option don’t necessarily want to see the private healthcare system succeed because they don’t believe in it,” said David Reid, chief executive with EaseCentral. “It comes down to your philosophy on how healthcare should be delivered.”
Reid noted that while public healthcare seemingly has its advantages, some systems in Europe don’t pay for certain high-demand procedures later in life. With private insurance companies, he said, “there’s not that limitation.”
The public option has overwhelmingly been viewed as a negative development by those in the insurance industry.
“A government-run plan would underpay doctors and hospitals rather than driving real reforms that bring down costs and improve quality,” said America’s Health Insurance Plans, the lobbying arm for the industry. “It’s time we focus instead on broad-based reforms that will ensure the affordability and sustainability of our healthcare system.”
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