As the Obamacare marketplaces prepare to open for business Sunday, the third year of enrollment may not be the charm, although the administration hopes it is.
Just hours before open enrollment starts, the Obama administration released a picture of the kinds of plan offerings shoppers will find at healthcare.gov, the federal-run website that serves all but a dozen states. Those buying the coverage are primarily people who don’t have employer-sponsored coverage and who aren’t eligible for Medicaid.
As in years past, shoppers will find a great deal of variation by county, state and region as to what kind of plans will be available. The administration didn’t release the actual plans ahead of Sunday.
But the overall picture of competition and pricing among the plans presents a mixed bag, giving both sides in the Obamacare wars plenty of evidence to argue with. While supporters of President Obama’s signature healthcare law have said the marketplaces will improve competition, opponents have argued the law will hurt it.
While the law has caused the U.S. uninsured rate to drop more dramatically then ever before, making more affordable coverage available to people who previously lacked it, the administration has admitted that it will be difficult to make further progress with the holdouts who don’t want insurance or don’t know about it.
As in the past two years, the Obamacare insurance landscape is complex. Here are three things to know about this year’s plans:
1. Fewer plans to choose from, but slightly more insurers
The average consumer will have 50 plans in their county to choose from, down from an average of 58 last year. But the number of insurers selling plans on the marketplace is up marginally, to an average of five per states instead of four like last year.
Administration officials downplayed the reduction in plan offerings, suggesting insurers were simply responding to market demand and eliminating plans that were unpopular.
“That really is enough to drive some pretty robust competition,” Richard Frank, the Department of Health and Human Services’ assistant secretary for planning and evaluation, told reporters Friday.
And 88 percent of current enrollees will have three or more insurers to choose from, up from 74 percent during the marketplaces’ first year, according to the administration.
“This is important because prior research show that price competition typically intensifies with three or more competitors in a market,” Frank said.
2. The average plan is 7.2 percent more expensive
The price of the benchmark plans, on average, is growing significantly faster than inflation, which presents a troubling problem for low-income consumers who have trouble affording health coverage. But compared to historical healthcare inflation, the cost increases are similar to what consumers experienced before Obamacare was passed.
The administration has been emphasizing that the increases are lower than average in many of the major markets where high numbers of uninsured people remain. In Houston, the benchmark plan is 4.9 percent more expensive, and it’s increasing by 5.1 percent in northern New Jersey.
Officials also stress that the vast majority of those eligible to buy plans can receive financial assistance that means they have to pay $100 or less each month for their premium.
3. Data vary dramatically, depending on where you live
Opportunities under Obamacare vary dramatically, depending on where enrollees live. While average rates are growing more slowly in some areas, they’re rising nearly everywhere and soaring in some markets.
The average benchmark plan will be 35.1 percent more expensive in Oklahoma City and 25 percent more expensive in the Albuquerque/Santa Fe area. In three states, Alaska, Oklahoma and Montana, the average costs are rising by more than 30 percent statewide.
The same goes for insurers. While each state has 10 issuers on a weighted average, many have only a few competing with each other. There’s just one insurer offering plans on the marketplace in Wyoming, and two each in Arkansas, Hawaii, Oklahoma, South Dakota and West Virginia.
The administration is less eager to talk about those areas, where the high cost of plans could detract those ineligible for subsidies from enrolling, and even push away those who are.
“There’s quite a bit of variation out there,” said Frank, when asked about concerns about areas with higher costs and less competition. “This continues to be a work in progress … we’re discussing what is the best thing to do to address choice and competition in all our markets.”
