Making Sense of the Healthcare Insurance Marketplace

Alaska and rural Southern states will see fewer choices.  

Nationwide, the plans under the new health law have been saving shoppers money and helping millions become insured. You also still may have the option for buying your individual private health insurance off-exchange, or outside the health insurance marketplace. Under the Affordable Care Act, you can’t be excluded if you have been ill in the past. The goal all along has been to cover more people, and attract insurers to compete, keeping down costs while giving consumers choices. 

One fear was that insurers would drop out of the marketplace or stop covering individuals at all if the new rules made their business unprofitable. This year, we’re now seeing major insurers announcing plans to drop out of the program in underserved areas in 2017. In the rural south, especially, which historically has had less insurance coverage, an estimated 2.3 million consumers may end up with only one option in the program.  

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Around the country, an estimated 62 percent of enrollees are likely to have a choice of three or more insurers through a state plan or Healthcare.gov in 2017, according to an analysis by the Kaiser Family Foundation. That number is down from 85 percent in 2016. 

Open enrollment starts Nov. 1.

Wyoming was the only state in which only one insurer participated in the Marketplace in 2016. In 2017, Alabama, Alaska, Oklahoma, and South Carolina may join Wyoming. Shoppers in most counties in Arizona, Mississippi, Missouri, North Carolina, Florida, and Tennessee may also have only one option, which is already true in West Virginia, Utah, South Carolina, and Nevada. And Pinal County, near Phoenix, could end up with no insurer options on the marketplace, since both UnitedHealth and Blue Cross Blue Shield of Arizona have decided to exit the area. 

There’s also good news, as the competition shifts. Some insurers are expanding in rural areas and the South: Medica has announced that it will enter Kansas, and Wellcare is entering 47 counties in Iowa.  Cigna may enter Raleigh, N.C., and other counties.

In California, the start-up insurer Oscar is planning to expand within the state in 2017.

It’s all still guesswork, says Marjorie Connolly, the press secretary for the Health and Human Services Department: "A number of steps remain before the full picture of marketplace competition and prices are known. Regardless, we remain confident that the majority of marketplace consumers will have multiple choices and will be able to select a plan for less than $75 per month when open enrollment begins Nov. 1." 

Since the law took effect, the choices had been increasing. In the 2015 enrollment period consumers could choose from an average of 40 health plans, up from 30 in 2014. 

Around the country, the new plans had been cutting costs for people who bought their own health insurance. In the first year, half of the enrollees saved more than $1,700 a year (that’s the “median,” which means half saved less). The figure includes premiums, deductibles, co-pays, and, in general, everything that goes under the term out-of-pocket costs.  

Many are benefiting from new tax credits. Eighty-five percent of marketplace shoppers using HealthCare.gov in 2016 got a tax credit, on average $291 a month, which means they could purchase baseline coverage for around $100 a month. Around 60 percent of people who are receiving a tax credit say that the program has benefited them, according to a big survey from the Kaiser Family Foundation. But you don’t have to get a tax credit to save money. In New York, I personally cut my costs by $100 a month even though I don’t qualify for a subsidy. 

Keep in mind that cheaper plans in the marketplace typically have high deductibles: you also pay out of pocket on top of your monthly premium for healthcare services, up to a certain amount, depending on which plan you choose. These plans might help the wallets of some people, and they might do harm. Choosing the right health insurance plan should always be an individual and well-researched decision, based on your needs.

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The nation's uninsured rate has fallen to a historic low: 9.1 percent in 2015. More than 9 million people now get coverage through HealthCare.gov or the state-based exchanges, according to a survey by the Centers for Disease Control and Prevention. Yet more than 28 million Americans still go without insurance; the number was down around 16 million before the Affordable Care Act took effect.

Rule changes tightening up enrollment periods could encourage insurers to participate in areas with limited choice, notes the healthcare research firm Avalere. More funding for outreach, more subsidies, or a stronger mandate, would also increase the number of potential enrollees, says Dan Mendelson, Avalere’s president. New products could make the exchanges more attractive to younger, healthier individuals. 

You can check to see what’s available in your area at the federal website, healthcare.gov, or your state plan. For a history of what’s happened in your state, try this state-by-state overview from the Kaiser Foundation. 

Remember that individual plans outside the exchanges could be available to you. Try a trusted broker or healthinsurance.org. But don’t skip seeing if you qualify for a tax credit. It’s very likely the best deal. If your income goes up during the year and you no longer qualify, you can pay the money back through your tax return. On the other hand, if you have an unexpectedly low-earning year, you can’t ask for a retroactive credit or jump in outside the enrollment period. 

Within the program, it pays to shop again rather than automatically renew. In most counties, a study found, the lowest-cost silver plan in 2015 had a lower-cost rival in 2016, and you could save, on average, $27 per month by switching. 

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