HHS department: Fear not, Obamacare will remain competitive

An estimated 80 percent of Texas consumers will be able to purchase a plan for less than $75 per month, HHS says, even if all final rates from insurers were to increase by double digits

By Sabriya Rice
The Dallas Morning News, Aug. 24, 2016

Despite recent decisions by several health insurers to stop offering plans in Texas on the Obamacare marketplace in 2017, federal officials say consumers will continue to have low-cost options.

An estimated 80 percent of those who purchase health coverage on during open enrollment should be able to purchase a plan for less than $75 per month. That's even in a hypothetical scenario where final rates from insurers increase 50 percent, the U.S. Department of Health and Human Services said Wednesday.

Nearly 1.1 million Texans are covered by plans purchased on the marketplace. In a report focused on the affordability of coverage nationwide, HHS said tax credits designed to protect consumers from rate increases will offset the costs for 7 of 10 purchasers.

While the costs may be low, the report did not specifically address another factor affecting Texas consumers: dwindling options.

This month alone, Aetna and Scott & White Health announced that they would no longer offer plans in Texas on the marketplace next year, and Oscar said it would pull out of Dallas and Fort Worth.

Around 60 counties of the 254 in the state will have just one option in 2017 unless another health insurer enters the market in those areas.

"It's always the folks that are leaving that get the headline, not the folks that are entering," argued Mandy Cohen, chief of staff for the Centers for Medicare & Medicaid Services.

She pointed to Cigna, which in June announced plans to offer insurance on the Obamacare marketplace in cities in Illinois, North Carolina and Virginia.

Entries and exits are expected in this type of marketplace, and the recent departures do not undercut the ability of the exchange to remain competitive and keep prices low, HHS said. However, not everyone agrees with the positive assessment or the approach.

The idea that health care coverage has been adequately addressed by the Affordable Care Act "is really a fallacy," says Dr. Leonard Zwelling. He's a retired oncologist in Houston and member of Physicians for a National Health Program, a group that has long advocated for health care to be a basic right.

"As long as market forces stay in place, insurers are going to go where the money is. That's just the way it is," Zwelling said. Simply having a low-price policy does not give patients access to all doctors, hospitals or specialty care, he added.

Still, the HHS notes that before the law passed, people with pre-existing conditions had no option and others faced lifetime limits, coverage caps and high costs.

In rural areas of Texas, where insurance choices may be few, rates of uninsured residents continued to drop, said Ben Wakana, HHS deputy assistant secretary for public affairs. In rural areas nationwide, uninsured rates fell by a third in 2015, he said.

"Limited choice has not hampered one of the fundamental goals of the Affordable Care Act, which was to drive down the uninsured rate and give people access to coverage they didn't have before," he said.

Insurers are needing to adjust rates as many plans were priced as much as 20 percent lower than what the government originally estimated would be needed to be sustainable. Also, a program created to supplement payments to insurers for enrolling patients who need high-cost care is ending after next year.

Blue Cross Blue Shield of Texas has the most expansive footprint in Texas and is one of the few large providers that, so far, has not announced plans to pull out. It is in the process of negotiating the rate for individual plans it sells on the exchange market.

Many issuers are making one-time adjustments to bring premiums in line with costs and to reflect the uncertainties of the new market, HHS said. All marketplace premiums will be finalized and public in October.

"This is a new market, with businesses participating and making business decisions," said Cohen. For insurers, that means a learning curve about how to be successful in this market.

However, a potential downside to the business model is the disruption to continuity of care, as provider networks can vary dramatically from plan to plan.

Patients who have to switch plans may find that the doctors they know and trust are not part of their new coverage. For people with chronic illnesses, consistency in treatment is critical to ensuring that nothing falls through the cracks.

It's a concern for many hospital, physician and other health care industry groups. And it's not new. The Texas Academy of Family Physicians noted that disruptions in providers on insurance policies were a problem long before the ACA went into effect.

"We're hopeful the changes in the marketplace won't cause too much disruption," said Jonathan Nelson, TAFP's director of communications. "The relationships patients and their family physicians develop over time are extremely important to keeping those patients healthy."

And those relationships are what might be lost in the focus on selling coverage, Zwelling said. "Coverage is not the issue; the real issue is access to care," he said. "And this puts that care right back out of reach."