One-third of the country may not have any competition on Obamacare's exchanges in 2017, leaving consumers with fewer choices for coverage, a new analysis has found.
The analysis, from research firm Avalere Health, concluded nearly 36 percent of Obamacare exchange regions might have only one insurer offering 2017 plans. The prediction comes as major insurers have announced plans to flee some Obamacare exchanges next year due to mounting financial losses.
Avalere also found that nearly 55 percent of exchange market regions could end up with only two or fewer carriers.
"While this analysis assumes no plans enter the market, consumer choice could improve if carriers decide to expand exchange participation," Avalere said.
More competition could force insurers to offer lower prices for plans.
Avalere pointed to several ways the Obama administration can help improve competition.
Those include improving enrollment to expand the risk pool. The administration could spur increased enrollment through stronger standards for who has to pay the penalty for not having insurance, Avalere said.
It also suggested changes to enrollment, including tighter standards for special enrollment periods, which enable someone to sign up for Obamacare year round. The periods can cause financial headaches for insurers as someone could sign up for Obamacare when he gets sick and drop out when he gets better, meaning he isn't paying premiums when healthy.
Avalere compared carriers that offered plans this year to those that have announced they are leaving the exchanges in 2017. It took into account several major insurers that have announced plans to exit and some taxpayer-funded Obamacare consumer-oriented and operated plans that have shuttered.
Aetna is the latest major insurer to announce a withdrawal, saying it will pull out of all but four states in 2017. UnitedHealth previously said it will withdraw from a majority of the 34 states where it offers plans, and Humana has said it will leave four states.
A major reason for the departures is mounting financial losses for the companies. UnitedHealth, for instance, predicted it would lose $600 million on the exchanges this year.
When Obamacare went online in 2014, many insurers underpriced their plans. The enrollment in the exchanges at first was lower than expected, and the people who did enroll were sicker than insurers anticipated.
Experts have said that has led to higher medical claims and caused insurers to lose money as prices for premiums couldn't cover claims.
The administration has made some moves to appease insurers on the marketplace. It eliminated some of the special enrollment periods. Officials also pointed to a recent federal report that showed medical costs for enrollees from 2014 to 2015 were largely stable, a sign the risk pool may be improving.
Administration officials responded that the study is "premature and incomplete."
"A number of steps remain before the full picture of marketplace competition and prices are known," said Marjorie Connolly, a spokeswoman for the Department of Health and Human Services.